‘The Contract with America’s Workers Is Unraveling’

[Omaha Steve]

http://blog.aflcio.org/2007/01/23/the-contract-with-americas-workers-is-unraveling/

‘The Contract with America’s Workers Is Unraveling’

by James Parks, Jan 23, 2007

Today, a key congressional committee opened hearings to find out the real story behind the nation’s economy. And according to those who testified today: The rich are getting richer and the rest of us are running hard just to stay in place.

The hearing on the economy is the first in a series by the House Ways and Means Committee and included testimony by AFL-CIO Secretary-Treasurer Richard Trumka. Says Ways and Means Chairman Charles Rangel (D-N.Y.):

Economic issues are vital to the security and prosperity of our great nation and Congress needs to know, to the fullest extent possible, how the economy is, or isn’t, working for every American.

The hearings will examine such topics as the current state of the economy, potential dangers to continued economic health, the cost of poverty on the American economy, the impact of globalization on workers and the economy, economic pressures on the middle class and whether all Americans have shared in the benefits of the economic recovery since the last recession.



William Spriggs, an economics professor at Howard University in Washington, D.C., told the committee the economic recovery, which began six years ago, has not benefited working families. Instead it has meant more money for the rich while working people and the poor have seen their standard of living stall or drop.

One cause of the widening gap, says Spriggs, is the failure to raise the minimum wage for 10 years. The House, as part of its 100 Hours agenda, earlier this month passed the first minimum wage hike in a decade. If the Senate approves, the minimum wage will grow from the current $5.15 an hour to $7.25 over two years.

But Spriggs says that is only one source of the problem.

The other source is the redistribution of corporate income, from wages to capital income. The latest data from the Bureau of Economic Analysis shows that the share of corporate-sector income going to wages is down to its lowest share in over 25 years….The latest CBO figures show that almost 60 percent of capital income goes to the top 1 percent in the U.S. income distribution.

And, he says, the consequences of this shift mean workers are working harder just to stay afloat:

The lower permanent incomes of Americans, particularly those in the bottom 80 percent of the income distribution, means they will face real constraints that will ill prepare them to take on added responsibilities, such as the current shifts away from employer-provided health care, and the changes in their household balance sheets toward increased risks resulting from current shifts away from employer defined-benefit retirement plans.

Trumka told the committee that workers’ stagnant wages can be traced to “a steadily growing imbalance of bargaining power between workers and their employers.”

The implicit “social contract” that allowed Americans to grow together, and build the American middle class, in the early post-WWII decades rested on a rough balance of power between workers and their unions on one side and employers on the other.

Today, this balance of power has eroded and the social contract with American workers is unraveling. America’s CEOs, who once viewed themselves as stewards of our country’s productive assets, today present themselves as agents of shareholders in whose name they aggressively shift good American jobs off-shore, reduce workers’ pay and walk away from their health care and retirement obligations.

We must change direction in our country’s economic policies to assure that the economy meets the urgent needs of the majority of American workers.

To make that reconnection, Trumka says we need to follow three important economic values that resonate powerfully with all Americans:

* Anyone who wants to work in America should have a job.
* Anyone who works every day should not live in poverty, should have access to quality health care for themselves and their family and should be able to stop working at some point in their lives and enjoy a dignified and secure retirement.
* American workers should enjoy the fundamental freedom to associate with their fellow workers and, if they wish, organize unions at their workplace and bargain collectively for dignity at work and a fair share in the value they help create.



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[conscious evolution]

1. This will be a good line of inquiry

A lot of stuff that could really embarass bushco could come out.

[Demeter]

2. Since Reagan Started This, It's Hardly News

it is in fact the American business school way of operating. It's going to take a revolution to turn it around now. Or another Depression.

[antigop]

3. Yes, the contract is unraveling -- what are workers doing about it?

Their pensions are being reduced or eliminated. Retiree medical plans are going. Benefits are shrinking. The list goes on.

And what, other than complain, are workers doing about it?

Sorry, but if they continue to sit on their rear-ends and do nothing, they only enable more benefit cuts.

They need to get off their rear-ends and start using every legal means possible to stop the erosion of the middle class.

They need to:
1)organize and unionize
2) vote
3) run for office or find someone to run for office

It irks me to no end that so many just keep voting into office the very lawmakers who will not do what is in the workers' best interests.