Wages And Workers

WAGES AND WORKERS....Mark Thoma reminisces about growing up in a working class family:
I can't imagine the workers at a peach canning factory going on strike now, but it was fairly routine at that time (early 1960s) for workers to picket. It seems like there was always one group or another marching with signs announcing unfair business practices and demanding better wages or conditions, and I was taught as a kid to respect those lines.

There was also a difference in the employee-employer relationship, at least as I observed it growing up in a working class family (my dad worked at a parts counter at a tractor store at that time). There seemed to be an understanding that workers had families to raise. Somehow, my parents — a worker at a parts counter and a peach factory worker — owned a house in a decent neighborhood and while it was tough some months, we had health care through my dad's job and most of the middle class trappings.

....I know the empirical evidence doesn't give a lot of weight to the union story for preventing inequality, but looking back it's hard not to believe that the evidence somehow misses an ethic that was present then, something larger than unions alone, something that is less present today, a social relationship between employers and employees that kept employers from pushing wages as low as they possibly could go. Things weren't all rosy and wonderful then, far from it, and there's some chance I'm remembering "good old days," but I do believe society's expectation of what an owner is obligated to do for workers has changed.

Well said. Whether unions were responsible for that "social relationship" or a result of it is hard to say, but there's not much question that both have declined in sync, and it's hard to believe that's merely a coincidence.

Even at their height, unions represented only a smallish fraction of private sector workers in America, but, like Mark, I think their cultural and political influence was far greater than econometric estimates give them credit for. Unions certainly played a direct economic role in keeping middle class wages robust and CEO wages earthbound up through the 60s, but in the end, the more important thing was probably the non-measurable component of their influence: even non-unionized executives felt a certain amount of pressure in postwar America to treat their workers decently and keep their own compensation at reasonable levels. But that was due more to tradition than anything else — along with a bit of political fear — and the decline of unions and the pressure they exerted on both politicians and public opinion loosened those traditions until, eventually, they were gone. Working class wage stagnation followed quickly on its heels.

I don't know if unions are the way to get those traditions back or not. Maybe we need something else for a postindustrial age. But warts and all, America was a better country with them than without them.