Labor Day comes and goes - but Congress does little to improve the
plight of workers in our country. In the last three decades our elected
officials have too often chosen to side with big corporations rather
than the working people in the United States.
In the face of aggressive employer demands for concessions, the downward
pull of international competition, weak and barely enforced labor and
workplace safety laws, relatively high unemployment rates, and a
struggling labor movement, most workers have seen wage rates stay
practically flat over the past several decades-even as CEO salaries and
profitability have skyrocketed.
The executive class has captured almost all of the gains in wealth from
the growth in gross domestic product (GDP) in recent decades. And George
W. Bush's recession and jobless recovery has only worsened the problem.
A Wall Street analyst said in March 2004: "We'd thought that the labor
share of national income was in the process of bottoming out, but
whether we're talking outsourcing or just old-style downsizing, the
effort by U.S. business to pare costs (and extract productivity gains in
services) continues apace." Meanwhile, employers have slashed benefits
for those workers lucky enough to retain a job. And workplaces remain
far more hazardous than necessary.
There are glimmers of hope that the situation can be improved. Some
unions and communities have won important victories that have made a
difference in workers' lives, but they remain a rarity.
Most people earn no more an hour than they did three decades ago
(adjusting for inflation), but those at the top have enjoyed
substantial increases in salary and those at the very top-the CEOs and
top company executives-have seen their compensation go through the roof.
Most people struggle to get by with rock bottom net worth. They're
working more and more-either working longer hours or picking up a second
or third job-to pay the bills and meet rent or mortgage payments.
(Americans worked on average two hundred hours a year more from 1973 to
2000-the equivalent of five full-time weeks.) In two-parent families,
increasingly both parents are in the workforce. Just to meet everyday
expenses, they're borrowing more and more from credit cards, home equity
loans, or second mortgages, or from legal loan sharks at check-cashing
operations. If someone in the family gets sick and lacks health
insurance- forty-five million Americans are in that boat-the family is
in a jam. Even if they have insurance, the extravagant price of medicine
may not be covered, or covered entirely, and paying for the pills can
drive a family into despair.
Meanwhile, the executive class rakes in more money than ever before, and
indulges new forms of conspicuous consumption. We have competition among
CEOs over who has the bigger yacht. If an executive has to go to the
hospital, they can check into platinum class luxury suites offered by
leading medical institutions-for $10,000 a night. The New York Times
recently reported on a new convenience for rich New Yorkers: private
indoor pools, with startup costs of $500,000.
Any way you slice the numbers, you get the same result: a deeply divided
America with a struggling majority and a superrich clique. It's a story
of a gap between haves and have-nots more severe than anything this
country has witnessed for a century, since the start of the
* For the private production and non-supervisory workers who make up 80
percent of the workforce, it took until the late 1990s to return to
the real earnings levels of 1979.
* CEOs at large corporations now make about three hundred times more
than the average worker at their firms. In 1982, they made just
forty-two times more; in 1965, twenty-six times more.
* The top fifth of households own more than 83 percent of the nation's
wealth, the bottom 80 percent less than 17 percent.
* The top 1 percent owns over 38 percent of the nation's wealth, more
than double the amount of wealth controlled by the bottom 80 percent.
The top 1 percent's financial wealth is equal to that of the bottom 95
* In 1979, the top 5 percent had eleven times the average income of the
bottom 20 percent. By 2000, the top 5 percent had nineteen times the
income of the bottom 20 percent.
* Whatever the data examined, it's worse for women and people of color,
who receive lower wages and have much less accumulated wealth than White
men. Women and minority males earn 70 percent to 80 percent of what
White men make. More than a third of single mothers with children live
Thanks to low levels of unemployment in the late 1990s, worker wages
started rising, eventually catching up to the levels of twenty years
earlier. But the recession and high rates of unemployment that have
persisted into the new millennium have almost surely ended that trend.
The effective stagnation in worker wages for three decades occurred even
though productivity rose steadily. Productivity is the amount of output
per person hour worked. In other words, workers were making and
producing more, but not receiving any share of the increased wealth.
Virtually all of it was captured by increased corporate profit taking. CEO pay grew at a much faster rate even than corporate
profitability. From 1990 to 2003, inflation rose 41 percent. Average
worker pay rose 49 percent. Corporate profits jumped 128 percent. CEO
compensation rose 313 percent
If the federal minimum wage had increased as quickly as CEO pay since
1990, it would today be $15.71 per hour, more than three times the
actual minimum wage of $5.15 an hour, as calculated by Boston-based
United for a Fair Economy.
It is time for Congress to show some courage and some compassion and
side with the workers who struggle to make ends meet.
Ralph Nader is the
author of: The Good Fight : Declare Your Independence and Close the
Democracy Gap (Harper Collins Books).