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Did Scott Walker Write the Obit of the U.S. Middle Class?

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The old saying that "Some days I shoulda stood in bed," has now been updated to "Some days I shoulda never turned on the computer." Today was one of those days. My trusty PC radiated nothing but gloom and doom. So much so that it set me to worrying whether Republican Gov. Scott Walker of Wisconsin, by decisively defeating the union-led effort to dump him, had -- inadvertently or otherwise -- written the obituary of the American middle class.

My worrying began here at The Huffington Post when I read a blog by former Labor Secretary Robert Reich, who wrote:

Rarely in history has the cause of a major economic problem been so clear yet have so few been willing to see it...

It's because American consumers, whose spending is 70 percent of economic activity, don't have the dough to buy enough to boost the economy -- and they can no longer borrow like they could before the crash of 2008...

We won't get out of first gear until the middle class regains the bargaining power it had in the first three decades after World War II to claim a much greater share of the gains from productivity growth.

How to do that? Reich suggests we somehow learn from history -- from New Deal measures of the 1930s, from the war as the employer of all resorts in the '40s, and tax rates for the rich that exceeded 90 per cent throughout the '50s. Reich points out that what we did back then worked:

By 1953, the top 1 percent of Americans raked in only 9.9 per cent of total income. Most of the rest went to a growing middle class -- whose members fueled the greatest economic boom in the history of the world.

That boom continued through the sixties and into the early seventies, columnist Harold Meyerson tells us in The Washington Post. One reason was continuing U.S. domination of the post-war global economy.

[B]ut that's only one of the two reasons our country became the first to have a middle-class majority. The other is that this was the only time in our history when we had a high degree of unionization. From 1947 through 1972 -- the peak years of unionization -- productivity increased by 102 percent, and median household income also increased by 102 percent. Thereafter, as the rate of unionization relentlessly fell, a gap opened between the economic benefits flowing from a more productive economy and the incomes of ordinary Americans, so much so that in recent decades, all the gains in productivity -- as economists Ian Dew-Becker and Robert Gordon have shown -- have gone to the wealthiest 10 percent of Americans.

When labor was at its numerical apogee in 1955, the wealthiest 10 percent claimed just 33 percent of the nation's income. By 2007, with the labor movement greatly diminished, the wealthiest 10 percent claimed 50 percent of the nation's income. Today, wages account for the lowest share of both gross domestic product and corporate revenue since World War II ended -- and that share continues to shrink.

Meyerson notes that, in the wake of the unions' defeat in the Walker recall effort, many of labor's friends, as well as its enemies, now believe "unions are in all but irreversible decline." What would this country look like without a union movement, Meyerson asks? I found his answer frightening. "If and when Big Labor dies -- it's on life support now -- America's big middle class dies with it."

How did unions and their friends allow this to happen? Sociologist Paul Starr, writing in the American Prospect, says the decline was hard to imagine in labor's winning days of the 1960s, but was largely the result of what the magazine calls "one great wrong turn by liberals at that time."

...the '60s seem strikingly different from the present because of what that era took for granted -- sustained economic growth and shared prosperity. To be sure, prosperity wasn't shared widely enough; the poor, especially the minority poor, were left out. But by 1962, the distribution of income and wealth had improved modestly for two decades, the middle class was growing, unions were a powerful force, and even Republicans accepted the New Deal. The movements of the 1960s proceeded as if those issues were settled.

The '60s movements were not just intellectually unprepared for the slowdown in growth and rise in inequality that began in the mid-1970s; they were institutionally unprepared, too. The civil-rights, feminist, anti-war, and environmental movements -- and others that came later --operated more or less on their own. They had particularly tense relations with the labor movement, which many of the new organizations saw as a bulwark of the status quo. On the left, solidarity was not forever. When Democrats had congressional majorities, they made no effort to repeal Taft-Hartley, the 1947 law that severely limited union organizing, or to adopt other measures that could have strengthened unions. They failed to appreciate how much their own concerns depended on the unions' role in mobilizing working-class support for progressive goals.

Taft-Hartley, passed by a Republican Congress over President Truman's veto after a crippling series of postwar strikes, remains a disaster to unions (contrary to Starr, there have been repeal efforts but they failed). One especially hurtful provision permits state governments to outlaw the union shop. That means employees don't have to join the union even after being hired. As a result, 23 states -- almost half -- now have so-called right-to-work laws that make union membership optional and have vastly weakened the labor movement.

Taft-Hartley and fallout from other government actions such as President Reagan's 1981 firing of illegally striking air traffic controllers, combined with corporate union-busting, have taken a heavy toll on union membership. At its height in the mid-1950s, 35 percent of American workers were union members. Last year they made up just under 12 percent of the labor force: 7 percent in the private sector and 37 percent in the public.

Business influence and anti-union sentiment mean there's no way Taft-Hartley and other impediments to organizing will be lifted anytime soon. But even if these and other steps were taken to strengthen the middle class, some argue it still wouldn't help much. Like Felix Salmon, Reuters' finance blogger, in his New York Times review of two books by liberals on the economy:

Yes, we should raise taxes on the rich by $30 billion a year, open our borders to skilled immigrants and even repeal Taft-Hartley. But none of those moves, individually or in combination, would make a real dent in the extreme inequality that we're living with today. This is now a country run by the rich, for the rich. And nothing in either of these books gives me reason to believe that there's any hope of changing that.

Or me either.