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The working class takes it on the chin

The State of Working America, 2002-2003, Lawrence Mishel, Jared Bernstein and Heather Boushey, Cornell University Press: 446 pp., $24.95 paper The Unmaking of the American Working Class, Reg Theriault, The New Press: 212 pp., $24.95 No Collar: The Humane Workplace and Its Hidden Costs, Andrew Ross, Basic Books: 296 pp., $27

March 02, 2003|William Wolman | William Wolman is the co-author, with Anne Colamosca, of "The Great 401(k) Hoax" and is a regular commentator on CNBC.

Three new books provide disturbing insights into how American workers have fared at the end of the 20th century and the beginning of the 21st. They go far in explaining why, during a long period of American economic hegemony, the real income of the average worker has remained essentially stagnant, while the share of the rich in national wealth has increased to a point at which it can provide satisfaction only for believers in the economic benefits of greed.

The attack on America's workers is occurring along a broad front. "The State of Working America, 2002-2003" is a comprehensive survey of the American workplace as a whole, while the other two books deal with what are, in effect, its extremes. "The Unmaking of the American Working Class" is an account of work and life among members of the International Longshore and Warehouse Union, one of the few labor organizations that has retained power, largely because it stands astride the flood of imports unleashed by globalization. "No Collar" offers an account of life in Silicon Valley and Silicon Alley, where workers were first lifted and then cast down by the boom-bust cycle in information technology.

The most recent in a series of biennial reports compiled by the Economic Policy Institute, "The State of Working America" presents careful data on real (inflation-adjusted) wages that clearly show how, from 1973 to 1995, the real income of the average American family grew annually by a barely visible 0.4%. The good news, and it was not nearly as great as advertised, came mostly during the great boom from 1995 to 2000, the year before the stock market bubble burst.

Those boom years saw a 2.2% rise per year in the wages earned by the median family -- an improvement for minority workers and women caused mainly by low unemployment rates. It took an overheated economy to produce serious economic gains for the average worker. When the boiler exploded in the stock market crash that started in spring 2001, the gains in average family incomes quickly fell back into the 1% range, even though unemployment remained low by historic standards. The institute's data show that the net worth of the average American family increased by only 2.9% per year between 1989 and 2001. In 2001, a drastic about-face happened, with net worth suddenly declining 10.8%; when the numbers are in, they probably will show a further decline in 2002.

What happened? The institute's economists attribute the stagnation of worker incomes in an era of economic hegemony and strong productivity gains to a "power shift" in Washington. The migration of manufacturing jobs abroad wreaked havoc on the union movement, opening the way for industry to "capture" economic policy. The case for free markets and "free trade" was superficially strengthened by the collapse of the Soviet empire. The corporation was free to play a strong hand and win a degree of deregulation unseen since the 1920s. And, with the globalization game going full tilt, the corporate forces that had favored protectionism in the 1920s became the champions of free trade. The corporation, of course, used its influence to negotiate specific trade treaties that protect the rights of capital while ignoring the interest of workers in enforcing fair labor standards.

The result has been an American workplace in which the growth of productivity routinely produces statistical "miracles" even as feelings of insecurity and anger become more widespread. Though the anger is unfocused, it is real and pervasive: A survey conducted by the Behavioral Health Group at Cigna last year found that 6 out of 10 workers felt insecure and even despondent about their jobs. The survey also found that an astounding 45% of the workers had considered leaving their jobs in the last year.

Insecurities in specific industries is the focus of "The Unmaking of the American Working Class." Reg Theriault writes what is almost a tone poem about the three decades he has spent as a West Coast member of the International Longshore and Warehouse Union. Because its members have plenty of work handling the flood of imports unleashed by the rise of industrial Asia, the union still has plenty of power. And though it took some lumps as a result of Bush administration pressure to settle the recent port lockout, the union will be strong enough to protect, and even enhance, the $135,000 annual income of its more senior members.

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