Tuesday, September 4, 2012

Productivity, Not Labor unions, Created the Middle Class

A Labor Day editorial at the NJ Star-Ledger, This Labor Day, Confronting Hard Truths Needed to Revive Middle Class,  ended with this amazing conclusion:

   This election, it’s said, is about rescuing the middle class from the Great Recession. But if that’s true, what’s lost is the vital role that organized labor — plus the GI Bill — played in creating the original middle class after the Great Depression and World War II.
   Before then, there was no middle class in America. And without a vibrant union movement, there’s little chance there will be one in the America to come.

I left the following comments:

It is simply not true that unions created the middle class. In fact, it is logically impossible for this to be so. If it were possible, the Soviet block would have been an economic oasis, rather than the impoverished economic wasteland it was. 
Only one phenomenon can raise the general standard of living; rising labor productivity, which comes about because of the labor-saving tools, machinery, and materials that inventors, entrepreneurs, and businessmen bring to the workplace. I know, because I lived it.  
Between the time I entered the workforce as a private sector union plumber in the 1960s and my retirement in 2012, the number of plumbers doing a given volume of work fell by perhaps 75% (i.e., a tripling of productivity). This enabled my union to negotiate steadily higher wages with employers, a rise in real wages that wouldn't have been possible otherwise. None of the tools and materials that raised my productivity came from trade unions. (Incredibly, trade unions often opposed these labor-saving advancements.) 
The true middle class emerged in the 19th century with the productivity explosion made possible by the liberation of "the masses" to work, produce, and trade in an atmosphere of unprecedented economic and political freedom. We went from massive grinding poverty in the Revolutionary era to mass production of cheap basic necessities like food and clothing; and the birth of the railroad, steel, automotive, airline, electric, and other great industries by the early 20th century. It was a time of rapidly rising real wages, amid a monumental influx of tens of millions of immigrants coming to the "land of opportunity" with "streets paved with gold."  
The Hoover-FDR Great Depression interrupted this growth, but the economic deregulation and tax liberalization policies of the Truman Administration, along with Bretton Woods, set the stage for the post-war recovery and boom. 
It is not necessary to be anti-union to recognize these facts.

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