It’s Time We Reinvented Labor for the 21st Century

Following companies that pursue a high-road economic strategy

Politicians have traditionally paid lip service to the plight of the worker, but with working class struggles at the top of the new administration’s fix-it list, we will likely hear them talking more than usual about the steps they will take to reduce income inequality or end three decades of wage stagnation.

Some of them will go one step further and voice support for unions and collective bargaining, both of which have declined at the same time wages have stagnated.

They do so for good reason. Not only have American workers made it clear they are fed up with being left behind as the economy prospers, there is a growing body of evidence that union decline is one of the key causes of wage stagnation and income inequality.

The solution, however, isn’t to bring back the unions of yesterday. We need to create stronger business-labor partnerships for tomorrow.

…

Want to continue?

By logging in you agree to receive communication from Quality Digest. Privacy Policy.

Create a FREE account

Forgot My Password

Comments

Interesting points but academia does not have viable solutions

Professorr Thomas:

You raise some interesting points. Here are some counter points.

1) The real minimum wage in this country is ZERO. Most who earn minimum wage cannot afford to pay the average rent or average premium on an Obamacare policy which is why Obamacare needs to be eradicated.

2) Labor, for the most part has been transferred overseas. Apple computer is repeatedly awarded and lauded but they have made BILLIONS on the backs of children. Just think of what USA Labor Productivity numbers would be like in the USA if every single i-phone in use had been made by the competent hands of non-union assembly workers in the USA instead of children in Asian countries.

3) Labor has been mostly stepped on in the timeframes and years you cite. Big bonus packages and executive compensation - not even hinted at in your writing has ballooned to out of control levels where some CEOs make 400x the lowest paid worker in their organization.

Has the law of supply & demand been repealed?

I work in the manufacturing sector. The "high-road" approach is a longer term strategy that works well, but many companies are still focused on quarterly results. More and more companies are coming around to this longer term line of thinking but it will take some time. I applaud this approach.

As for wages, I see wages rise when workers are in short supply. When local unemployment increases, wages tend to stagnate or decline. Worker productivity has some influence, but the supply/demand environment is the primary driver of wages.

It would seem that the economic principles surrounding the price of bread also apply to the price of labor. If the goal is to increase wages, it would seem that increasing demand for workers would be a reasonable approach. This situation is best fostered by a growing economy.

So the question is: How to foster a growing economy to create more demand for workers.

The government has a horrible track record for private sector job creation, innovation, and efficiency. Taking more money out of the private sector – that is pretty good at these things – and giving it to government bureaucrats doesn't seem like a path to success. The government is much better at hindering growth through taxation, regulation, and general interference in the market to favor certain industries or companies.

Therefore, it would seem that LESS government involvement would be preferable to more government involvement – at least in my experience.