No More Riots: How the Decline of Street Politics Leads to Poverty

In this brazenly business oriented country the recent celebration of Labor Day was almost an embarrassment. The traditional parades and mass picnics have been dispensed with in favor of a last trip to the with the family. Fewer than ten percent of US workers are now unionized as compared with almost 30 percent in 1970. And yet union workers enjoy an approximately 28 percent premium in wages as opposed to non-unionized workers. Clearly belonging to a union has huge advantages for workers, not only in wage levels but also in the winning and maintenance of other important benefits like health-care and retirement payments.

Why then, have the unions taken such a beating?

The answer from big business is generally that unions force artificially high wage levels which make the businesses they work for unable to compete with non-unionized (and often foreign) businesses. They point to the decline of manufacturing in the US as being directly a result of high US wages. Older companies like GM, they say, must compete at a disadvantage brought about by the necessity of paying real health benefits and real wages to their workers. However, the American economy continues to boom and overall income rises. The problem is that most of gains go to the highly-paid, while wages for the low-paid stagnate. Adjusted for inflation, most American workers are now making less than they were five years ago according to economist Paul Krugman writing the in the New York Times on September 10th 2007.