In his piece at Slate on the sluggish growth in wages in the United States Daniel Gross’s two paragraphs recapping how we got where we are are good:
Corporate America went into survival mode and took an axe to what, in most instances, was its largest single cost: labor. Between January 2008 and February 2010, private-sector companies slashed 8.8 million jobs. At the same time, they slashed the wages and benefits of the workers they continued to employ. This was the playbook for getting through the worst financial downturn since the Great Depression. And as the economy began to expand, companies remained parsimonious on wages and benefits, and continued to push the obligation and cost of training onto workers.
They were able to do that in part because there was immense slack in the labor market. The unemployment rate peaked at 10.0 percent in October 2009. And so for a long period of time, companies became accustomed to getting all the labor they needed at the (low) price they wanted to pay, and managed to hold onto staff despite not raising wages. This mentality hardened into something like a permanent mindset, incorporated into business models and pro forma projections. In an era when overall economic growth was slowing, companies simply couldn’t countenance raising wages consistently.
That’s a fair recap with one quibble about the first sentence. I would have written “Corporate America acted as though it were in survival mode”. I wrote about this at the time. There were sharp job cuts even in industries that weren’t seeing sharp declines in demand. In some cases businesses cut workers because they could do so without incurring scrutiny.
Additionally, there’s a factor unmentioned in his account. Businesses actually cut their payrolls a lot farther than that and brought workers in to replace the workers they’d fired from overseas who were willing to work less than the workers they’d displaced. That’s still the case.
There is a sort of fear in many workplaces today. Workers are afraid to ask for wages and skulk around trying to avoid being noticed because they don’t want to be fired and replaced by someone cheaper who won’t make waves. That’s a real change from years ago.
So, if you’re wondering about the lack of dynamism and energy in today’s American economy, look no farther.
So why do people who are not CEO”s hate unions? Is it because they don’t remember workers trying to organize for better pay had to fight against armed, hired, head smashing strikebreakers to even have the right to bargain collectively? Don’t they know that any power workers have in negotiations with corporations is both earned, and fragile?
Once lost, you have to do what my grandparents said. Work hard, keep your head down, and be glad to have any kind of job.