I don’t think that Harold Meyerson appreciates the irony of this remark in his article about how to increase workers’ wages:
What corporate apologists won’t acknowledge is that workers’ incomes have been reduced by design. American business has adamantly opposed workers’ efforts to organize unions. Millions of jobs have been outsourced, offshored, franchised out, reclassified as temporary or part-time, or had their wages slashed, in a successful, decades-long campaign to increase the return to capital. Indeed, the only way to explain the soaring profit margins and stock values of recent years despite anemic increases in corporate revenues is that profits have come at the expense of labor. In forecasting the continued rise of profits in 2014, the chief economist for Goldman Sachs, Jan Hatzius, wrote: “The key reason is the continued slack in the U.S. labor market and the resulting weakness of nominal wage growth …. The subdued growth of unit labor costs has supported profit margins even in an environment of low price inflation.”
Contrary to Mr. Meyerson, I think that you’d expect exactly what has happened to happen in a very loose labor market, the opposite to happen in a tight labor market, and his organization supports a loose labor market.
He proposes eight different ways of increasing workers’ share of the pie:
- Legislate Wage Hikes in States and Cities
- Link Corporate Tax Rates to Worker Productivity Increases
- Link Corporate Tax Rates to CEO-Employee Pay Ratios
- Make Corporations Responsible for All Their Workers
- Help Create Benefit Corporations, and Don’t Tax Them So Much
- Help Workers Claim Their Share of Capital Income
- Raise Taxes on Capital Income and Redistribute It to Labor
- Change the Governance of Corporations
Of these I agree wholeheartedly with exactly two—#6 and #8—although I think we probably differ in exactly how we’d go about doing it.
I don’t think that Mr. Meyerson does a particularly good job of explaining why his proposals would have the results he claims to advocate rather than, say, reducing the amount of work available to Americans.
My own proposals would be somewhat different. I think I’d tighten the labor market here and stop incentivizing companies to send work overseas to avoid onerous and costly regulations, taxes, etc. There are different ways of effecting each of those but those would be my objectives.