People in small towns, nearly everywhere in this country, have access to national programming & news on television and online. As easily as one could subscribe online to something like the Janesville Gazette, one could subscribe to the Chicago Tribune or Washington Post.
Imagine, then, a choice between editorials in the Gazette and the Post on the state of labor in America. Just a few days ago, both papers published on this national topic: the Gazette in a Sunday editorial, the Post in a guest article from Lawrence Summers, former Secretary of the Treasury, and a longtime academic (for president, current professor, of Harvard).
The Gazette offers Economy, not unions, boosts labor, a 500-word editorial that contends that union membership has declined in the Janesville area, yet that the paper’s editorial board “cannot claim that the economy is worse off for membership declines. Indeed, poverty rates statewide have fallen to the lowest level in years, while unemployment rates are also near record lows. The labor market now favors skilled workers employers are competing for and struggling to find.”
I hold no brief for unions, although I think that they should be a robust choice available to workers, at any worksite, should they choose. The problems with the Gazette‘s use of these simple measures are obvious. Poverty is a measure of economic sickness, but its decline is no assurance of overall health. (Cancer rates might be low, for example, but a population still beset by anemia, high-blood pressure, alcoholism, for example.) The absence of the severe does not assure the presence of temperate. A low unemployment rate still begs the question of overall productivity and employee gains. Finally, a labor market that favors skilled workers (under the Gazette‘s implication that that’s Janesville) still doesn’t answer how many workers are skilled, how many are non-skilled, and how both groups are faring.
Look, instead, at the analysis that Summers offers in the Post. (Summers isn’t a libertarian, to be sure, but that’s not significant. What’s significant is how Summers presents a strong argument, even if one disagrees.) Here’s Summers on the state of labor, in It’s time to balance the power between workers and employers:
….Surely related to middle-class anxiety is the slow growth of wages even in the ninth year of economic recovery. The Phillips curve — which postulates that tighter labor markets lead to an acceleration of wage growth — appears to have broken down. Unemployment is at historically low levels, but the Bureau of Labor Statistics reported Friday that average hourly earnings last month rose by all of 3 cents — little more than a 0.1 percent bump. For the past year, they rose by only 2.5 percent. In contrast, profits of the S&P 500 are rising at a 16 percent annual rate.
What is going on? Economists don’t have complete answers. In part, there are inevitable year-to-year fluctuations (profits have declined in several recent years). And in part, BLS data reflects wages earned in the United States, even though a bit less than half of profits are earned abroad and have become more valuable as the dollar has declined relative to other currencies. And finally, wages have not risen because a strengthening labor market has drawn more workers into the labor force.
But I suspect the most important factor is that employers have gained bargaining power over wages while workers have lost it. Technology has given some employers — depending on the type of work involved — more scope for replacing American workers with foreign workers (think outsourcing) or with automation (think boarding-pass kiosks at airports) or by drawing on the gig economy (think Uber drivers). So their leverage to hold down wages has increased.
On the other hand, other factors have decreased the leverage of workers. For a variety of reasons, including reduced availability of mortgage credit and the loss of equity in existing homes, it is harder than it used to be to move to opportunity. Diminished savings in the wake of the 2008 financial crisis means many families cannot afford even a brief interruption in work. Closely related is the observation that workers as consumers appear more likely than years ago to have to purchase from monopolies — such as a consolidated airline sector or local health-care providers — rather than from firms engaged in fierce price competition. That means their paychecks do not go as far….
These two analyses aren’t the same in depth: the local editorial misses key points, either through ignorance or sophistry, that Summers easily covers in his succinct, general-readership essay.
Those reading Summers – even if in disagreement, and perhaps especially if so – will gain something from his observations. Those reading the Gazette will find only shallow contentions.
In a small town, one could read either. In a school district, one could teach either. At university, one could research either.
Why settle for less, why teach a new generation to accept less, when one could engage and think at a competitive national level, just as easily as any other person in America? Summers and others are as accessible to us as the Gazette, and offer so much more.
Anything less is short-changing onself and one’s community.