The New York Times’ source said that the decline of labor unions was an important cause of inequality–but the Times didn’t think that was fit to print. (cc photo: Kheel Center)
The New York Times (6/4/14) took a look at one of the economic puzzles of the last few decades: If growth has been strong, why aren’t we seeing a greater reduction in poverty? Interestingly, the research the Times is relying on offers some explanations–ones the paper doesn’t see fit to mention.
The story by Neil Irwin–“Growth Has Been Good for Decades. So Why Hasn’t Poverty Declined?”–notes that it’s considered conventional wisdom that the “surest way to fight poverty is to achieve stronger economic growth.” But since the mid-’70s, the US economy has grown, but the benefits of that growth have not been shared. He writes: “The mystery of why–and how to change that–is one of the most fundamental challenges in the nation’s fight against poverty.”
The piece is based on research from the left-leaning Economic Policy Institute. As Irwin sums it up:
If the old relationship between growth and poverty had held up, the EPI researchers find, the poverty rate in the United States would have fallen to zero by 1986 and stayed there ever since.
So what has happened to explain this? Irwin gives only a hint, writing that “liberal-leaning group’s policy prescriptions are open to debate.” Click on the EPI link in the Times piece, though, and you’ll see the researchers offer some pretty clear ideas about why they think this has happened:
Direct evidence highlights the key roles of the two most-visible and well-documented changes in labor market policy and practice over the past generation in driving wage trends: the erosion of the inflation-adjusted value of the federal minimum wage and the sharp decline in the share of the American workforce represented by a union.
Most specifically, EPI notes:
- Between the 1970s and the late 2000s, the eroded minimum wage explains roughly two-thirds of the growing wage gap between low- and middle-wage workers, and weakened unions explain a fifth to a third of the entire rise of wage inequality.
The point of the piece is to think about what happened from the late 1970s onward. And Irwin does a good job of explaining how Paul Ryan-esque rhetoric about the need to get poor people to work misses the point, since “the reality is that low-income workers are putting in more hours on the job than they did a generation ago–and the financial rewards for doing so just haven’t increased.”
So why didn’t Irwin talk about the minimum wage or unions–the factors EPI singles out as being especially important to understanding this story?
This piece appeared in the print edition of the Times, but it’s part of The Upshot, part of a new breed of data-rich, “explain-the-news” sites. In this case, there does seem to be an explanation for the story it’s trying to tell. And for some reason, the Times doesn’t want to talk about it.
No “mystery” why the poor stay poor
And no mystery why the Times wants you to think there is, is there?
There is no poverty debate or discussion, and this issue was written out of lib media years ago. The deterioration of progressive discussion began back with the Reagan admin. Bill Clinton turned the party — and the media marketed to libs –well to the right on socioeconomic issues. Of course there is good reason for this, as our own history shows. This isn’t the first time in modern history when the richest few gained a dangerous degree of power over politics and policies, to the harm of the country. Each time this happened in the past, the people — poor and middle class, workers and the jobless, united to push back, to everyone’s benefit. Interestingly, Newt Gingrich (remember Gingrich?) addressed this in a series of lectures, pointing out that to bring the “Reagan Revolution” to fruition, it was necessary to pit these groups of people against each other. Divide and conquer. This was done very successfully. It’s currently acceptable to support increasing the minimum wage. But even when we know that not everyone can work (health, circumstances) and that we have a significant shortage of jobs (we shipped out a huge portion of our working class jobs since the 1980s), there is no talk about those left behind — the destitute, the homeless. Even libs embraced the right wing notion that only those who are of current use to employers/the corporate state qualify for the most basic human rights of food and shelter.
@DHFabian: As an octogenarian who’s been there, I agree that the Democratic Party has shifted well to the left starting with the Clinton administration. What’s new is the so-called left wing’s practice of ignoring the polls to attract the big money, just like their right wing opponents.
I wonder what Irwin’s salary would have been had not employees of the Times and other newspapers fought hard to unionize many decades ago. Or does Irwin give two-thirds of his salary to ACORN?
I agree with DHFabian. My solution is that old saw popularized by Karl Marx: From each according to his ability, and to each according to his need. One of the big problems that unions had was that they lost their revolutionary edge during WWII. After the war, they were primarily interested in negotiating wages, benefits, and working conditions for their members and lost their connection to the Communist Party. As the economy began to collapse in the 70s, the highly privileged union members and scab labor were increasingly pitted against each other, and nonmembers began to resent union members. The problem with unions is that they came to resent desperate scab labor rather than regarding all workers, union and nonunion, as brothers and sisters. The narrow, parochial viewpoint of labor unions and their moving further and further to the right of the political spectrum robbed them of popular support and doomed them. Also, unions should have fought tooth and nail to repeal the Taft-Hartley Act, and we should never forgive the purportedly prolabor Democratic Party for never bothering to repeal the Act during the may years that they had the power to do so.
Getting rid of all of our present taxes on labor would lower the cost of hiring American. A tax-funded health insurance program would relieve employers of this expense and make labor more competitive with machines and robots..
You want more and better jobs . . . here’s a couple of ways.
The tax code can change incentives. Tax codes are social engineering they encourage some things and discourage other things.
In many cases we raise taxes on things that we think are socially destructive (cigarettes and alcohol) and we remove taxes from things we think a good for society (churches and charitable organizations.) Jobs are good for society but we tax them heavily. We should try to remove all of the economic penalties (taxes) from labor.
On the other hand:
If a person does work, they pay several taxes. If a machine does the work it pays none. When a machine does the work of 10 people then it could be taxed at the same amount that 10 people would be taxed. That would be fair . . . right? With this system I don’t think we would be lacking for jobs. If we have enough people jobs available, then the discrepancy in income should be less and a minimum wage might not be necessary.
I meant to say the Democratic Party has shifted far to the right, not left.
I am with Doug, the Lame stream media can not possible mention the reality of the situation, otherwise it would become very clear, the Media’s outlets are also part of the problem.
As one of my old chiefs would say: if you come in with a problem, and haven’t at least thought of one solution for it, then you just became part of the problem. They have, since the days of the “Disinformation Campaigns” and the “Immoral Minority” been part and parcel of the issue, delivered daily to the working man.