A Labor Day Graph That Shows The Potential Power Of Unions And Why The GOP Hates Them

If you do nothing else on this Labor Day, look at the graph below (hat tip to the great Jared Bernstein). Absorb its two simple messages. It tells you all you need to know about the force for good unionism is (or was), in terms of helping all working class people. And it also tells you all you need to know about why the Republican Party, which represents the interests of the moneyed class, makes constant war against unions:

union membership and income share

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6 Comments

  1. Remarkable!

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    • I know, Jim. And you know what? There just aren’t that many people around who give a damn about any of this stuff. I can pretty much guarantee you that a majority of my own union members, those here in Southwest Missouri, will sprint to the polls in November to vote for Trump.

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  2. ansonburlingame

     /  September 6, 2016

    Remarkable, indeed. The graph suggests that income inequality is almost directly dependent upon union membership, simple as that. So if union membership had been constant at 34% over a 60 year period (1954-2014) one would assume that only 34% of our population would reap 10% of the wealth in America and 34% of all (some actually) wage earners would have an equal share. That helps fix income inequality but …….?

    I would point out that the decline in union membership over 60 years (from 34% down to about 10%) is all the fault of the Republican Party according to Duane. However during that 60 year span of time there was a GOP WH for some 36 years and a Dem WH for about 24 years yet the decline seems almost constant in such membership over the entire 60 year period. I would also point out that Dems controlled Congress for a substantial majority of that same period. Hmmm? Is that remarkable?

    What almost always happens when the economy becomes a dominant fact politically? Slow or even negative growth in GDP causes political uproar, all over the “map” of American politics it seems to me. Simply stated, when the value of goods and services sold in America and around the world goes up, significantly, politicians usually reap wins in elections, if economics drives such elections.

    Now compare the figures of union membership and the growth in GDP, or the value of the DJA, or any other macro-metric of the value of American businesses. One would have to assume that declining union membership contributed positively to economic “growth” as we have measured it for a couple of centuries. Hell, one could draw a graph showing increasing income inequality made a positive contribution to overall, historical economic growth in America. Would that be “true”?

    My point is simple. Modern economics is an very complex witch hunt for economic truth. The real question from a purely economic point of view is does unionization of a company increase the value added to the goods and serviced provided by a given company. Remember if the value added of specific goods and services is stagnate or even goes down, no company will last very long and ultimately “the people” (see Russia, China, etc.) suffer grave harm, collectively.

    No doubt at all, if taxes are raised on only the rich, all workers were unionized, the estate tax was increased significantly, etc. AND the U.S. government distributed all that wealth to achieve parity or close to it in wealth metrics, income inequality would be eliminated in America. I just wonder what the curves for GDP might look like if that happened?

    As well, if some socialistic approach against the ability to earn wealth on the stock market was taken; I just wonder how GDP curves would react as well?

    In short, why should not Hillary clearly say that income inequality is her greatest “enemy” and she will fix that problem come hell or high water. “Let’s all work together” to eliminate income inequality, to hell with what happens to GDP for a few years. Marx and Lenin tried to do exactly that, did they not, well sort of!

    Anson

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    • Anson,

      First of all, yes, economics is a difficult instrument with which to find the truth. That’s for sure.

      But I want to tackle one thing you said:

      Hell, one could draw a graph showing increasing income inequality made a positive contribution to overall, historical economic growth in America. Would that be “true”?

      There’s no way of knowing, from the graph itself, whether that would be true. But the graph shows that decline and stabilization of income inequality coincided with some fairly prosperous years following the war, years of good economic growth. And it happened to coincide with low deficit spending and low aggregate debt, something I know you worry about. And look where the inequality began to multiply. It was during the era of supply-side economics, which in many ways continues today, what with the relatively low tax burden on the wealthy.

      In any case, you seem to want to look at the union effect in terms of microeconomics (“does unionization of a company increase the value added to the goods and serviced provided by a given company”). I care more about its macro effects. It may be the case that Company A is hurt by unionization but Company B and C and D and so on make necessary adjustments and add to our overall economic health.

      As for Hillary taking the Bernie-Marx approach, you know exactly what would happen if she started quoting socialists, even of the Democratic Socialist variety. Your right-wing friends would have yet another weapon to bludgeon her with.

      Duane

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  3. ansonburlingame

     /  September 7, 2016

    I wrote at some length above simply because of Jim’s comment “Remarkable”. One simple graph impressed him “remarkably” as if that one graph told the full story about income inequality causes. You seemed to understand that the complexity of such an issue in terms of causes and effects is very broad and cannot be explained by a single graph. It was however a great “sound bite” and that matters a lot in American politics today!

    The inherent conflict in any discussion about income inequality and economic well being is the question of what is the most important issue. Some say rising GDP is the key element. Others, today, point to income inequality. But if you focus on one, to improve it, the other may well suffer, in a macro sense.

    As with any complex political issue today, balance, call it compromise if you like, would seem to me to be the key. It is astounding to me that today a CEO can make $10 Million a year (plus bonuses), borrow too much money trending the company in the direction of bankruptcy and still get a huge golden parachute when he bails out or is even “fired”.

    But it is equally astounding that a “hoodlum” (very poor performer) on an assembly line can do a lousy and incompetent job on that assembly line, come in after a lunch of three beers, mouth off at anyone around him and still be “protected” by a union.

    Yes, those two “micro” examples are just that, examples. But the “macro” results across the nation present a huge problem, how to be fair and still use performance as the ultimate yardstick, macro or micro as the case may be.

    Anson

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    • I wrote at some length above simply because of Jim’s comment “Remarkable”. One simple graph impressed him “remarkably” as if that one graph told the full story about income inequality causes.

      I see you haven’t mellowed at all this past year. You are all too ready to brand anyone who expresses a comment contrary to your own opinion as shallow, Anson. Since you don’t respect me enough to grant me some slack on this, I will try to elucidate, even though it’s probably futile.

      As we can all agree, economics is not a pure science. It’s complicated and for sure, the chart doesn’t prove anything. But what I found remarkable about it is that the two lines imposed on the same axes, percentage and time in years, are virtual mirror images of one another. It is data that ought not be ignored, especially when robust theory, buttressed by both common sense and history, indicates that the two are indeed related. Unions have historically been the economic leveling force behind income inequality. They were primarily responsible for the reforms following the Gilded Age. The subsequent weakening of those reforms was predictable because unions were weakened by political corruption and by globalization of manufacturing jobs. Fast Food workers have little clout, so the trend is understandable.

      Unions have only one weapon, the strike. I wish it weren’t so messy, but that’s the way it is. Corporate greed is pretty much irresistible and only regulation by a progressive government can level the playing field and encourage effective training to fill the place of the old production-line security. Meanwhile, conservatives offer nothing to the working poor’s future but privatization of everything. The “hidden hand of the market” is effective only at the small business level and nothing is being done to prevent monopolies and oligopolies. The rich get richer and the poor get poorer, just like in 1890.

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