by Robert B. Reich

Why is this recession so deep, and what can be done to reverse it?

Hint: Go back about 50 years, when America's middle class was expanding and the economy was soaring. Paychecks were big enough to allow us to buy all the goods and services we produced. It was a virtuous circle. Good pay meant more purchases, and more purchases meant more jobs.

At the center of this virtuous circle were unions. In 1955, more than a third of working Americans belonged to one. Unions gave them the bargaining leverage they needed to get the paychecks that kept the economy going. So many Americans were unionized that wage agreements spilled over to nonunionized workplaces as well. Employers knew they had to match union wages to compete for workers and to recruit the best ones.

Fast forward to a new century. Now, fewer than 8% of private-sector workers are unionized. Corporate opponents argue that Americans no longer want unions. But public opinion surveys, such as a comprehensive poll that Peter D. Hart Research Associates conducted in 2006, suggest that a majority of workers would like to have a union to bargain for better wages, benefits and working conditions. So there must be some other reason for this dramatic decline.

But put that question aside for a moment. One point is clear: Smaller numbers of unionized workers mean less bargaining power, and less bargaining power results in lower wages.

It's no wonder middle-class incomes were dropping even before the recession. As our economy grew between 2001 and the start of 2007, most Americans didn't share in the prosperity. By the time the recession began last year, according to an Economic Policy Institute study, the median income of households headed by those under age 65 was below what it was in 2000.

Typical families kept buying only by going into debt. This was possible as long as the housing bubble expanded. Home-equity loans and refinancing made up for declining paychecks. But that's over. American families no longer have the purchasing power to keep the economy going. Lower paychecks, or no paychecks at all, mean fewer purchases, and fewer purchases mean fewer jobs.

The way to get the economy back on track is to boost the purchasing power of the middle class. One major way to do this is to expand the percentage of working Americans in unions.

Tax rebates won't work because they don't permanently raise wages. Most families used the rebate last year to pay off debt -- not a bad thing, but it doesn't keep the virtuous circle running.

Bank bailouts won't work either. Businesses won't borrow to expand without consumers to buy their goods and services. And Americans themselves can't borrow when they're losing their jobs and their incomes are dropping.

Tax cuts for working families, as President Obama intends, can do more to help because they extend over time. But only higher wages and benefits for the middle class will have a lasting effect.

Unions matter in this equation. According to the Department of Labor, workers in unions earn 30% higher wages -- taking home $863 a week, compared with $663 for the typical nonunion worker -- and are 59% more likely to have employer-provided health insurance than their nonunion counterparts.

Examples abound. In 2007, nearly 12,000 janitors in Providence, R.I., New Hampshire and Boston, represented by the Service Employees International Union, won a contract that raised their wages to $16 an hour, guaranteed more work hours and provided family health insurance. In an industry typically staffed by part-time workers with a high turnover rate, a union contract provided janitors with full-time, sustainable jobs that they could count on to raise their families' -- and their communities' -- standard of living.

In August, 65,000 Verizon workers, represented by the Communications Workers of America, won wage increases totaling nearly 11% and converted temporary jobs to full-time status. Not only did the settlement preserve fully paid healthcare premiums for all active and retired unionized employees, but Verizon also agreed to provide $2 million a year to fund a collaborative campaign with its unions to achieve meaningful national healthcare reform.

Although America and its economy need unions, it's become nearly impossible for employees to form one. The Hart poll I cited tells us that 57 million workers would want to be in a union if they could have one. But those who try to form a union, according to researchers at MIT, have only about a 1 in 5 chance of successfully doing so.

The reason? Most of the time, employees who want to form a union are threatened and intimidated by their employers. And all too often, if they don't heed the warnings, they're fired, even though that's illegal. I saw this when I was secretary of Labor over a decade ago. We tried to penalize employers that broke the law, but the fines are minuscule. Too many employers consider them a cost of doing business.

This isn't right. The most important feature of the Employee Free Choice Act, which will be considered by the just-seated 111th Congress, toughens penalties against companies that violate their workers' rights. The sooner it's enacted, the better -- for U.S. workers and for the U.S. economy.

The American middle class isn't looking for a bailout or a handout. Most people just want a chance to share in the success of the companies they help to prosper. Making it easier for all Americans to form unions would give the middle class the bargaining power it needs for better wages and benefits. And a strong and prosperous middle class is necessary if our economy is to succeed.

Robert B. Reich, former U.S. secretary of Labor, is professor of public policy at UC Berkeley and the author, most recently, of "Supercapitalism."

http://www.commondreams.org/view/2009/01/26-7

Can't you see that this is all talk? This has been going on forever the last 20 years...NAFTA...GATT... all the uneven trade agreements. the sell out of corporations, AMERICAN ones...for the cheap labor etc etc. the influx of illegals hurt the working class & continues to.

Rockefeller Reps ...Limosine Libs... don't you see they are all the same?

What I don't understand is why everyone bashes the religious right when they have moral integrity & a conscience to do what's right?

I never bother any religiouse person in their church of choice on Sunday morning. I expect them not to bug me on election day or at the school board meetings or townhalls.

Unions have vastly over stepped their power!

Why is it with a college education I can't get a job over $30 yet some high school drop out can get $90 an hour turning screws at an auto manufacturing plant?

Thanks to unions forcing the hand of many manufacturers they businesses scrambled to China who don't play that game. I was UAW 148 and while I was starving and out of work they couldn't get me into work because of their seniority.

The unions got to get it in their heads they have to allow wages to drop or business in this country will just leave and if we loose more of our manufacturing capability we are screwed as a nation!

Instead of pressuring manufacturers to pay more should they not focus more on keeping their jobs rather than make the companies they are pressuring go away?

The answer fifty years ago was WAR! Both Korea and Viet Nam. War spurred our economy and nothing else! It was the only way to get manufacturing to go up. Now everyone wants to be a manager. Back then everybody whined about Japan taking over. We were in a cold war with Russia and making as many nukes as we could stockpile. Tensions were different back then.

These days of you want to help the economy people got to learn to stop borrowing money and stop living on credit! Stop buying Mercedes Benzes and BMWs on credit!

Everybody keeps looking to the so called experts in Washington to save us and they are the ones making the problems worst!

THE LAST THING THIS COUNTRY NEEDS IS MORE COLLECTIVE BARGAINING!

UNIONS ARE NOT GOOD ANY MORE! Sorry but you evidently did not study economics very well.

They have every right to have a say in what goes on in govt whether you like it or not. Why am I not surprized that you missed the point?

Iam sorry there are so many inacuracies in this post I cant respond in any way.

I suppose I have to explain the seperation of Church and State. WIsh I had more time.

That is not a very enlightened response. What exactly are your credentials to be citing history exactly?

I'm sure you lack a proper response to my challenge to your beliefs...

I may be bad at Logarithms but I rock at statistics and history. union power hit its peak in the late 1950's but that was when businesses began to migrate. Now the American Auto makers are sucking wind from flat sales and OVERLY HIGH labor rates. You are aware that a Employer does not have to offer Benies at all? Health and Dental come out of an Employers ass at great expense. That adds to the bottom line the Employee is earning because if the employee is making 12 and hour the costs behind make that employee almost $50 an hour thanks to the benies and SSID tax matching most Employers have to pay.

Do you even own or run your own business? If not I think you need to respond a little more intelligently or shut up! Some of us are in the fire trying to stay a float as a business in trying times. Most of the times people praising Unions do not have their own businesses. I sure do not hear any business owner praising them ESPECIALLY in construction!

Here's what the bill of rights says...

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.

This means govt. does not have the right to interfere with religious freedom or expression of. There is nothing there that says people of faith can't have a say in their govt. That's a lie to say otherwise.

Im sorry I dont run a business I see things through the eye of the working class. I suppose that makes mewrong and your right eh? anyhow do you know what the corperate tax was in the 1950's? You did say history was your subject.

Unions? Really? Ever been to Michigan?

true story.. I was doing field work for a geophysical consulting firm and we had a job in Michigan at at mfg plant. They wanted to set down a 400 ton piece of equipment on this plot of open ground but the plant manager suspected that there was some buried utilities under the ground in question. So.. solution? do a GPR survey and find where the buried whatevers, map them out and be on our way.. easy right? Should take about half a day, max.

well we get to the site and the pliot of ground is overgrown with about three feet of grass over which it would be impossible to run my equipment.. no problem. GO talk to the foreman, tell him I need the site mowed before I can do my job.. he says ok, he'll see what he can do. Comes back an hour later, tells me the "guy" in charge of ground maintenance is on vacatin for two weeks. I say, 'ok, what's the big deal? get someone else to mow it'

he looked at me like I just insulted his mother..

apparently, it;s like the third commandment of union.. thou shalt not do another guys job, even if it's got to be done today and he ain't coming back for two weeks.

so... we wait around all bleeping day waiting for the union chiefs to scratch their heads and come up with a solution to this "problem".. there was a mower in a shed not a hundred yards from where we had parked the van. I could have had the damn lot mowed, survey done and map made in the time it took these d-bags to find someone with "union authorization" to do a job a 10 year old could have done...

moral of the story?? unions are a waste of time and are THE reason most manufacturing jobs have moved to singapore or some other god foresaken hell hole on the other side of the world...

If you say its true it must be ..............

nevermind....

not worth the trouble..

Lets go back further during the 1930's. Herbert Hoover was trying to bail out the country and programs like the CCC and other programs were being used to stave off utter and whole sale collapse of a nation teetering on total economic Armageddon. You are aware that personal taxes back then were up to 70%? Ever see those OLD black and white cartoons where the tax assessor came to a person's house and the homeowners were living in luxury but they pull a lever and the house suddenly looks dilapidated?

Now look at today. Where is Barak Hussein Obama supposed to come up with the money for his stimulus packages?


Do not try to play the "worker" card on me. I too am a worker. I do the work others will not do! I was in areospace for a while where I worked in the Union environment.

Unions are destroying industry plain and simple! Once upon a time they did serve a function but they became drunk with power.

And cooperate taxes in the 1950s was about 45 to 47%. I also know the top five manage to NOT pay taxes these days.
Also Unions stagnate businesses. See the example above me!

Hell, the entertainment industry would really benefit from getting the unions out of the picture.

I have to agree that unions did abuse their power at one point ('power corrupts'), but for the most part they gave us a good life (all of us who work for someone else, anyway) - healthcare benefits, life-insurance benefits, 40-hour work week, paid vacation, sick leave, etc.

Of course, some of the gains that were made have been eroded now. But I believe there will be another pro-labor wave. It will happen when people decide that they have given up enough and are willing to organize and fight to regain what has been lost.

Totally correct.

Unions are no different than a gang. Their purpose is to forcefully take ownership of a business they have done nothing to build.

The stated method of unions is O.K. It is anyone's right to quit anytime they want, and also to do so in numbers, on a que. This is collective bargaining. It is no different than a group buy of a particular good, such as a group of a million people getting together to negotiate a better price for say, a LCD TV.

However, this is where the similarity ends. To become a union, that group of consumers needs to:

- eliminate every other customer to begin with, and,
- when negotiations go south, to beat up anyone the producer turns to.

Unions do raise the standard of living of it's members, for sure, but so is a gang, every time it raids a business, or murders a civilian.

Sure they have a right to "say what goes on in government"

Their rights end at my bedroom door, the school house doors and my doctors office door.

Religious zealots often don't understand that and seek to impose their rules on others with alarming regularity.

Why am I not surprised that you missed the point?

The moral of the story is absolute power corrupts...it doesn't matter who has it.

That's why in decision making balance is an imperative. So that means the left is off the mark & better stop pointing fingers & trying to stomp on someone else's face.

Did I mention that EVERYONE needs to have a seat at the table? That would make it fair & balanced. It's not rocket science & so simple no one gets it.

right... because "religious zealots" have cornered the market on forcing their beliefs on people..

and since when has the government not interfered with the school system? Public schools these days are little more than government-sponsored liberal indoctrination camps.. those who can't see that are typically the product of such indoctrination.. they teach that those who pray are "zealots"; Those that insist on the means to their own defense are "gun-nuts"; those that settled this country were "genocidal invaders" and so on and so on.. that the civil war was solely about slavery..

there's so much liberal spin in the history books these days it makes me sick..

why do you so hate your own kind??

...and thank you for making my point. The left are the ones who weakened our nation with their lack of responsiblity & rebellious COUNTER culture mentality, & now they just can't admit they were wrong. They still want to fit a square peg & a round hole. LOL