At The Nation, Mike Konczal writes—There Is Power in a Union: A new study overturns economic orthodoxy and shows that unions reduce inequality:
For a period of 40 years, something managed to keep inequality in check in the United States. From 1940 to 1980, the richest 1 percent took home 9 percent of the wealth generated by the economy. Today, just as they did in the 1920s, the top 1 percent grabs about double that share. Surprisingly, the cause of this midcentury “Great Compression” has been largely neglected by economists, with many of them casually dismissing the role of unions.
One influential theory, especially among pundits, is that the supply of skilled workers curbed the growth of income inequality. Starting in the 1940s, the argument goes, the increasing education of the American workforce propelled a broad prosperity. Another recent account, associated with the economist Thomas Piketty, maintains that the devastation of World War II drove down the returns on capital.
But a groundbreaking new paper, “Unions and Inequality Over the Twentieth Century: New Evidence From Survey Data,” written by the economists Henry Farber, Dan Herbst, Ilyana Kuziemko, and Suresh Naidu, proposes a different engine for that broad prosperity: unions. The growth of union membership—to a height of nearly 30 percent in 1955, before falling to its current low of 10.7 percent—explains the Great Compression every bit as much as theories about education or any other single factor.
It may surprise some readers that economists consider the statement “unions help workers” a revelation akin to discovering general relativity. (Another recent finding, “where you grow up matters,” has also shaken the economics establishment to its core.) But economists haven’t had the necessary data to study unions in any depth. Detailed data on education goes back to the 1940s, but the government only introduced questions tracking union status in 1973. Yet the authors of “Unions and Inequality” newly applied a Gallup data set that allowed them to analyze workers back to the 1930s.
Before this paper, economists generally believed that unions largely helped the most skilled and educated workers—i.e., those who already had higher wages. [...]
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“For nearly four years you have had an Administration which instead of twirling its thumbs has rolled up its sleeves. We will keep our sleeves rolled up. We had to struggle with the old enemies of peace--business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering. They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.”
~~Franklin Delano Roosevelt (1936)
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On this date at Daily Kos in 2006—If I may be so bold as to suggest that yesterday's news sucked…
Wall Street tanked (again), over a thousand more U.S. troops are going into Iraq to help Bush turn more corners, the Pentagon admits the insurgency is going to get worse, Afghanistan is falling apart, the death toll from the Indonesian earthquake is up to nearly six thousand, consumer confidence dropped in May, they didn't find Jimmy Hoffa (dammit...he's still got my watch), home foreclosures are on the rise, there's an investigation underway regarding a massacre of civilians in Iraq by our guys, a major car company is recalling a million vehicles because of faulty steering wheels (enjoy your commute this morning, Toyota owners), the Supreme Court squished federal whistleblowers under its thumb, a brick nearly went through our TV when Bill O'Reilly accused Jack Murtha last night of wanting to "cut and run," plus...
One year after her disappearance, Natalie Holloway astonishingly remains the #1 story in the media universe (now that American Idol has temporarily moved off the front page).
And if that wasn't bad enough, now we learn that global warming is going to cause a worldwide outbreak of mutant poison ivy.
On today’s Kagro in the Morning show, Greg Dworkin joined our live first hour, rounding up news on Trump's morning rager, VA's Medicaid expansion, those crazy California primaries and more. In the second hour: The origins of Trump's Putin crush, his unsecured phone risks and clarity on his greatest crime.
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