U.S. decline in real wages tied to less union influence

Labor Day in the United States is a time to honor the contribution of workers. Recently, workers in the U.S. have fallen on tough times. Unemployment is high, while wages and benefits continue to decline — along with the ranks of organized labor. With the presidential campaign in full swing, both candidates are claiming they can do what’s best for the American worker.

Tom Lee is a former president of the American Federation of Musicians, the largest musicians’ union in the world. He began his career with the U.S. Marine Corps Band and played many performances at the White House.

Although unions have lost stature in the U.S. in recent decades, Lee believes they still have an important role to play.

“I do believe that unions have helped the American people. Even those who have not been in unions make great strides in terms of wages, in terms of benefits,” Lee said.

But union membership has declined by about 50 per cent over the past 40 years. And last year, the state of Wisconsin stripped most public workers of their collective bargaining rights.

Many economists think the decline in membership is an important factor in the drop in wages, adjusted for inflation.

Lawrence Mishel is president of the liberal Economic Policy Institute.

“And this is because we have had excessive unemployment for many years recently, but over the last 30 years, we have had globalization where American workers have been pitted with workers with much lower wages. We have had erosion of unionization,” Mishel said.

According to Mishel’s own report, the productivity of U.S. workers has risen by 80 percent over the past three decades. But hourly wages have only risen 11 percent.

Conservative economists disagree. Andrew Biggs is a resident scholar at the American Enterprise Institute.

“We have had significant differences in the way employee compensation is paid out. More goes to health care today than in the past. Less goes to wages and benefits. That is not a function of exploitation. That is a function of rising health care costs and those have to be borne out somewhere,” Biggs said.

Biggs argues that bringing down health care costs and increasing productivity will lead to higher wages.

Mishel does not believe that’s true.

“… because we see wages have gone down for segments of the population that don’t even get health insurance,” Mishel said.

Meanwhile, union leader Tom Lee says he believes wages will continue to decline unless workers organize and press for policies that focus on economic security for all.

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