Last fall my readers were shocked to learn that I agree with
President Obama that incomes and wealth are badly disproportionately distributed
in the USA. The data are shocking, and the situation is
immoral and, ultimately, unsustainable.
I won’t go into this again here.
The basic economic problem that we have here is that real
wages have been steadily declining since the early 1970’s, after increasing regularly
every decade since 1830. The promise of
a better life tomorrow for ourselves and our children has ended, and that’s
where the trouble starts.
When this first began happening, workers responded by
working more hours, by taking two jobs and by sending other family members out
to work – in order to maintain or improve their standard of living. When this didn’t work, people began borrowing
on their homes and on their credit cards.
This is one reason why the housing and credit crash of 2008 was so
Of all the factors that have led to the decline in real
wages and the growth in inequality, perhaps the only one that is somewhat under
our control is the decline in private-sector unions.
“But the figures announced by the bureau point to grave
problems for the future of organized labor. The portion of private sector
workers in unions fell to just 6.6 percent last year, from 6.9 percent in 2011,
causing some labor specialists to question whether private sector unions were
sinking toward irrelevance. Private sector union membership peaked at around 35
percent in the 1950s.” New York Times
As a business owner and employer, I always cheered the
decline in union membership and power, but as an American, I now realize that
this was one of the worst developments that could happen in our country. The decline in real wages and the
inequalities now present were what re-elected Obama, and there is no end in
sight to the class-warfare situation that is developing.
In my view, raising taxes on the wealthy and strengthening
unions are the only two remedies realistically available; promoting growth has
not worked. The Republican Party should
adopt a program of supporting and encouraging the growth of responsible unions,
and should stop the automatic opposition to all tax rate increases.
Labels: Society in General, Wealth Inequality