The Decline of Labour

The statistics detailing income inequality are well known. It suffices to note that in the past decade in the United States, the salaries of corporate CEOs have skyrocketed to as high as 400 times that of the average production worker. The minimum wage has not substantially increased, not even in proportion to the increased cost of living. This relationship reflects a global trend to the tune of an old adage: the rich get richer, and the poor get poorer. And India is no exception. The number of billionaires in this poor country is increasing, only to exhibit the perversion in economic inequality and income distribution. All composite social indices relaitng to health, education and nutrition rank India near the bottom.

Efforts to raise the minimum wage face bureaucratic hurdles and conservative opposition while the highest incomes swell due to governments' failures to implement democratic, effective income regulation. Instead of remedying this ever-widening gap, it is better to address its underlying causes.

A major factor in the exacerbation of income inequality in the past several decades was the fragmentation of unified, effective, and supported labour movements in the late 20th century. A study published by the Centre for Labour and Social Studies found that, as trade union membership declined in 16 OECD countries between 1966 and 1994, income inequality increased substantially. From 1980 onwards, the income share of the richest 1 percent in Canada, the United States, and United Kingdom climbed to unprecedented levels, coinciding with a sharp decrease in union membership.

If workers are not unionising to collectively bargain for higher wages, better working conditions, and stricter health and safety regulations, then corporations are not actively held responsible for providing higher wages, better working conditions, and stricter health and safety regulations. Capitalism's invisible hand does not ensure shared economic prosperity. It serves corporate greed.

The increased income inequality from the late 1970s onwards reflects the increasingly anti-labour international political climate, crystallized in Ronald Reagan and Margaret Thatcher's neoliberal regimes. In 1981, when some 13,000 workers of the Professional Air Traffic Controllers Organisation (PATCO) threatened to strike, Reagan issued an executive order disbanding the union, effectively firing almost 11,000 workers.

The PATCO strike is often cited as the decisive event in the dissolution of the American labour movement, the realignment of class power, and the exasperation of income inequality. In his book Collision Course: Ronald Reagan, The Air Traffic Controllers, and the Strike that Changed America, Joseph McCartin declares that "no strike since the advent of the New Deal damaged the US labour movement more."

The PATCO strike is not an isolated incident, though it is a historical pivot point. At the beginning of the century, the top 10 percent of Americans claimed nearly 40 percent of the national income, while union membership was as low as 10 percent. This gap continued to widen through the 1920s: the top 10 percent continued to earn as much as half of the national income. In 1935, the 'National Labor Relations Act', part of the New Deal, encouraged unionisation and established workers' rights to collective bargaining. As a result, union membership soared throughout the 1930s, corresponding with a dramatic decrease in income inequality. Throughout the 'Great Compression' into the 1970s, economic prosperity was largely shared: the portion of the national income taken by the rich was slashed by one third.

However, beginning in the early 1970s with the economic recession, political culture shifted, and unions came under attack. Union-busting techniques became status quo. Politicians, courts and public policy cracked down on labour, culminating with the PATCO strike of 1981. Since the 1980s, union membership has steadily declined, income inequality has risen to the levels witnessed in the 1920s, and corporate accountability has hit an all time low.

The correlation between increased income inequality and decreased union membership cannot be attributed to market forces, union mismanagement, a lack of faith in the collective bargaining process, or confounding factors. Income inequality is the direct result of conservative ideology and political will. Anti-labour policies in the later half of the 20th century have underwritten a political culture blind to the source of its own disease. [contributed]

Frontier
Vol. 48, No. 11, Sep 20 - 26, 2015