Working America: Going Backwards

Against the Current, No. 41, November/December 1992

William Meadows

The State of Working America, 1990-91 Edition
By Lawrence Mishel and David M. Frankel
Economic Policy Institute, M.E. Sharpe, Inc., $29.95 cloth.

THE STATE OF Working America is a publication of The Economic Policy Institute, which was founded in 1986 with a network of economists and other scholars interested in encouraging public debate about policies to achieve economic growth and prosperity for the majority of citizens, not just the privileged few.

The research data in this volume show that the economic policies of the Carter/Reagan/Bush administrations further widened the gap between rich and poor. The trends shown in carefully analyzed data, primarily from government sources, reveal nothing less than the beginning of the end of the American standard of living so long exalted as the highest in the world. The American System is clearly not working for most of its people; and things are likely to get worse before they get better as the process of shrinking the industrial sector, breaking the unions and international “out-sourcing” of production continues apace.

In very revealing tables and useful pull-quotes on each page, we see that the so-called economic recovery of the 1980s left the average American family significantly worse off while Blacks and Latinos fell further behind and the base of the poor widened and deepened. In brief, this is what happened in the `80s:

* Wages have been virtually stagnant since 1979 and real wages fell more than 9 per cent between 1980 and 1989 despite a 12% growth in U.S. hourly productivity in the same period. By 1987, 31.5% of the work force was earning poverty level wages.

* Only women’s work has kept average family incomes from falling along with a general increase in hours and weeks worked. Even so, the bottom 40% of families experienced a decline of income in the `80s while the upper 1% saw their incomes growing by 74%.

* Because of Reagan/Bush tax policies, the burden was shifted downward and the tax reductions favored the already rich. Corporate taxes also decreased in the `80s.

* Not only have real wages fallen but hourly benefits such as pensions and health insurance fell 13.8% during the `80s.The United States and South Africa remain the only industrialized nations without a national health plan. Workers also received less time off for vacations and holidays.

* The cherished American dream of homeowning is becoming no more than a dream as the number of homeowners is rapidly dropping. Costs of renting has also risen sharply. 33.7% of households were “shelter poor” in 1987, meaning they could not buy sufficient food, clothing, etc. after rent payments.

* Unemployment rates remain relatively low but still well over the peak employment years of 1947, 1967 or 1973. But the real story is in the increase in undesired part-time work and multiple job holding which has placed a full fifth of the work force in distress. Blacks continue to suffer at double the unemployment rate of white workers.

There has been an increase in poverty since 1979, largely due to lower wages and decreased transfer payments. “Not only are there more poor; the poor are also poorer.” Now the U.S. “leads most other industrial countries in rates of poverty.”

We see in these dismal facts the result of a state of war against the working class of this country conducted with great skill and audacity by the combined forces of business and government. Gone are the heady days after World War II when American capitalism was supreme in the world, profits were high, markets were expanding, producing the foundation for constantly rising wages, based on productivity, and permitting a standard of living which was the envy of the world.

What is to be done? The question still confronts us and the old answers do not seem to carry their former appeal and power. Most of the left rarely mentions revolution anymore. No one seems to know who or where the vanguard is and what to do with it if it can be located. We see the depressing spectacle of former Marxist-Leninist-Maoist organizations scrambling to remove the dreaded word communist or even socialist from their names and rushing to emulate the once despised social democrats or worse, simply closing the shop.

Much of the left, seems to doing little more than gathering its tattered ranks into defensive positions hoping for better political times. But of course, this is not good enough–we must somehow find the strength and purpose to rebuild our socialist movement now. The ingredients are all out there–an angry, resentful working class which clearly sees the gains of more than fifty years going down the tubes and will probably find within its ranks the ideas and leadership necessary to renew the struggle.

We see fragments of old and new social movements all around us, a new generation of young people eager to resist and looking for places to put their energies plus significant numbers of older, experienced rebels not ready to throw in the towel. What we need are new ideas, new strategies, new organizations to point the way. We must reinvent the socialist project to fit the “new times” we are living through, and we must move firmly and swiftly.

November-December 1992, ATC 41