Newspaper article The Christian Science Monitor

Workers' Share of America's Pie Is Shrinking

Newspaper article The Christian Science Monitor

Workers' Share of America's Pie Is Shrinking

Article excerpt

For every dollar of goods and services produced in the US in 2009, American workers saw only about 55 cents. Globalization and a lack of support for unions in Washington are contributing factors.

American labor isn't getting its full share of the nation's output.

Indeed, its share is at a "record low," says Charles McMillion, chief economist at MBG Information Services, a Washington consulting firm. "Labor has no leverage." So wages have been "depressed, stagnant, or falling" for some 30 years.

Much of that lost compensation went to business and its owners. Last year, for example, businesses raised workers' hourly pay a little (2.2 percent) but cut their hours a lot (5.1 percent). The result? The remaining workforce became considerably more productive, creating more goods and services per hour worked.

Ideally, business and labor would share about equally in productivity gains. Over the past three decades, though, business has reaped the bigger share. For every dollar of goods and services the United States produced in 1974, all employees reaped about 59 cents. Last year, their share had fallen to 55 cents. In a $14 trillion economy, that amounts to hundreds of billions of dollars in lost wages every year.

One reason for that grim slide is the globalization of the American economy. Mr. McMillion estimates 1 billion people in the world are unemployed or grossly underemployed and thus willing to work for tiny wages in comparison with those paid to most Americans.

Another reason is the perpetual war against trade unions by much of business and many antiunion politicians of both parties. For example, Republicans on the House Committee on Education and Labor routinely dispatch an e-mail to the press attacking the Employee Free Choice Act (EFCA) or some White House appointment, such as a nominee to the National Labor Relations Board. …

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