Bad Times for Labor / by kevin murray

According to governmental statistics, unemployment is around 4.3%, which as reported by NYtimes.com, on 6/2/17, is "its lowest level in 16 years", in which historically low unemployment rates would necessitate better wages for those that are employed, but statistics also demonstrate to us, as reported by pewresearch.org that "today’s average hourly wage has just about the same purchasing power as it did in 1979," indicating that despite all of the productivity growth America has accomplished since 1979, that this has not translated into wage growth for the average laborer, which means somewhat obviously that the main beneficiary of this productive increase has gone to the owners of businesses and/or those that control the capital in the first place.

 

Further to the point, the world has shrunk considerably since 1979, in which there are less and less onerous tariffs associated to the trade and selling of goods worldwide, along with the fact that governments such as the USA consistently aids and abets exporting jobs that previously were performed here in America, being outsourced overseas, so that while American consumers benefit in lower cost products domestically, they also lose out on employment opportunities because those jobs no longer exist locally as American labor costs cannot compete in many professions, against foreign labor.

 

Additionally, companies make it a point to automate the things that can be efficiently automated for the dual reasons of the benefit of capital expenses as well as capital depreciation, which helps the company from a tax liability standpoint as well as the fact that automation and robotics are often labor saving devices, if not initially, then projected to be so.

 

All of the above puts extensive pressure upon labor, so that a significant amount of the jobs that people are presently employed in, don't pay well now, won't pay well in the future, and have limited upside for laddering up for those so employed.  In addition, to that fundamental issue, labor, unlike machinery, has associated costs that are mandated by various, somewhat intrusive, government agencies, such as OSHA standards, healthcare, vacation, sick leave, holidays, overtime, and so on and so forth, whereas machinery, does not have the equivalency of these things attached to it.

 

In this type of environment, especially in an age in which labor unions have become, especially in the private sector, almost irrelevant, the sole laborer, unattached to anything, that is, a free agent, often working under the semantic of "right to work" gobbledygook, has virtually no power, no matter how much value that person brings to the table, to demand, much of anything from management, especially when working in an industry, in which they are just another cog in the machine.

 

In short, just because you are employed, doesn't mean that you're making money, or progress, or a living wage, for as reported by fortune.com, "42% of all workers in the United States fit this bill," of making less than $15/hour, and as long as companies can outsource jobs overseas without penalty, can depreciate and expense capital equipment but never do the same with human labor, and labor unions remain essentially non-existent, it will continue to be for a significant amount of good Americans:  bad times for labor.