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Commentary: no recovery without workers' rights

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It's been about two years now since the near collapse of our economy, and Congress is finally getting serious about making financial institutions follow tougher rules.

Commentator George Gonos thinks this all to the good, because, he says, de-regulation of the banking industry over the last 30 years - the weakening or elimination of rules - was a major cause of the crisis. He hopes Congress will pass new laws to govern the banks, and put some teeth into them. But he adds that at best, reining in the financial executives will deal with only one-half of the problem.

George Gonos is associate professor of sociology, at SUNY Potsdam

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Missing from most all the talk about the economic crisis is any mention of the more fundamental underlying cause - the long-term decline in the wages of American workers.

Since 1973, earnings have fallen or stagnated for 90 per cent of American workers, and their bargaining power has virtually disappeared.
Here in Northern New York, nearly 40% of all available jobs pay less than a living wage for a single adult, a proportion that skyrockets to 80% if one happens to have any children.

Like the financial crisis, the decline in wages is the result of deregulation. In this case, we're referring to the deregulation of the labor market - the elimination or non-enforcement of laws that had protected the earnings and rights of American workers during the prosperous era after World War II.
Pushed by powerful business lobbies, Congress has since the 1980s allowed the value of the minimum wage to dip well below the official poverty line. Our political leaders have also made it easier for companies to avoid overtime pay, easier to send jobs away to low-wage countries, easier to replace employees with so-called temp workers at much lower pay, and easier to fire workers who complain about any of this.

The result is that while corporate profits have climbed to their highest share of the national income in 65 years, the share going to workers has sunk to its lowest level.

It's not hard to see why the spread of low-paid jobs precipitates economic crisis. Our economy is dependent upon the ability of companies to sell the massive amounts of products they put up for sale. But in recent years, the cost of houses, fuel, health care, college education, telephone service, cable TV, and furniture have all well outpaced wages. The working class has been forced to borrow for almost everything, even the groceries.

What we did to pull out of the last Great Depression can help us today. A major component of the "New Deal" was a remarkable piece of legislation which explicitly stated that the causes of the Depression were the low wages and lack of bargaining power that had resulted from the pro-business, "laissez-faire" policies of the 1920s.

The Wagner Act directly addressed the problem of growing inequality by encouraging Americans to form labor unions and negotiate better terms of employment. It gave workers the tools to gain a bigger piece of the American pie.

In the decade that followed, tens of millions of workers flocked to unions, and from 1947 to 1973, real wages grew every year. All groups benefited, and the American middle class expanded as never before.

Since the 1980s, however, the anti-worker policies, promoted by Republicans and Democrats alike, have shifted the balance of bargaining power heavily to the side of large employers. Union representation has fallen back dramatically, and the consequences were easy to predict: corporations simply stopped sharing the wealth, keeping more and more of it for themselves.

Can we get a New "New Deal"? Yes, if working people of all backgrounds organize, stick together, and demand fairness in the economy. Legislation could help. The Employee Free Choice Act, for instance, which conservatives have so far blocked, would help by restoring workers' freedom to choose a union.

We're told that a "recovery" is already underway. Is it possible that our economy can be corrected without directly addressing the dismally low wages of American workers? No, not really. The massive ongoing infusion of government funds into financial markets might, as they say, "restore liquidity," and keep the system going for a time. But it won't fix the underlying problem.

The better choice is greater democracy, both political and economic. Our Great Recession won't be over until American workers, and their counterparts around the world, gain a much fairer share of the fruits of their labor.

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