Wage, labor moves would expand the middle class

So how do we re-create the American middle class?

Making our loopy tax code more equitable appears to be off the agenda, what with Senate Republicans’ refusal Monday to allow a vote on a tax hike for millionaires. And even if the “Buffett Rule” were enacted, it would do nothing to alter the rocketing inequality in Americans’ pre-tax income. With the Southern wage for manufacturing — roughly $14 an hour — becoming the national norm, and with hiring more prevalent for low-wage restaurant and retail jobs than for positions in higher-paid industries, the incomes of most Americans will continue to stagnate, if not decline.

Recently, though, two proposals have emerged that could boost Americans’ incomes. One — part of an omnibus stimulus measure from Sen. Tom Harkin (D-Iowa) — would raise the minimum wage and index it to the cost of living. The second, laid out in the new book “Why Labor Organizing Should Be a Civil Right,” by Richard Kahlenberg and Moshe Marvit, would extend the employment protections of the Civil Rights Act — which forbids firing workers for reasons of race, gender, age and disability — to workers seeking to join a union.

Today, the federal hourly minimum wage is $7.25, which annualizes to a munificent $15,080 a year. Had the minimum wage increased in line with productivity since 1968, when the wage reached its highest level as a percentage of the median wage, it would be $21.72, by the calculations of John Schmitt of the Center for Economic and Policy Research. But since the 1970s, all additional income from productivity increases has gone to the nation’s wealthiest 10 percent, according to economists Robert Gordon and Ian Dew-Becker.

Harkin’s bill would raise the wage to $9.80 over a three-year period and index future wage increases to the cost of living. It would also, over five years, raise the minimum wage for tipped workers from $2.13, where it has languished since 1991, to $6.85 and then index its value to 70 percent of the minimum wage.

Critics of the minimum wage argue that it’s really just a subsidy for teenagers, but Schmitt and his colleague Janelle Jones have documented that the average age of workers making $10 or less per hour is 35 years old and that the share of minimum-wage workers who are teens dropped from 26 percent in 1979 to 12 percent in 2011. Some critics argue that the wage shouldn’t be raised when unemployment remains high. But pervasive low incomes, like high unemployment rates, reduce Americans’ purchasing power and retard economic recovery.

A similar Keynesian logic informs the proposal from Kahlenberg and Marvit. With only 6.9 percent of private-sector workers unionized, the vast majority of U.S. workers cannot compel their employers to boost their wages, no matter how productive they may be. It’s not that a majority of Americans have turned against unions. Polling by Peter Hart research over the past few decades has found a steady rise in non-managerial private-sector workers who would join a union if they could, reaching 58 percent in 2006.

In theory, the 1935 National Labor Relations Act (NLRA) gives workers that right, but employers have violated it with impunity in recent decades, firing workers involved in organizing campaigns (anywhere from one worker in 20 to one worker in eight, depending on the study) in attempts to thwart those campaigns. The NLRA explicitly outlaws such firings, but the penalties it imposes are so minimal (they average about $5,000 per fired worker) and are imposed so long after the fact (on average, nearly 16 months) that such firings have become routine.

During the Johnson, Carter, Clinton and Obama presidencies, Democrats have attempted to restore workers’ organizing rights, but their efforts to amend the NLRA by strengthening penalties on employers or changing the procedures for union elections have never surmounted the Senate’s 60-vote supermajority hurdle to cut off debate. Kahlenberg and Marvit propose a different remedy: including those workers who seek to join unions under the Civil Rights Act, which would enable them, as the NLRA does not, to sue their employers in federal court if they’re fired for exercising their rights . Workers would then be able to collect real, not symbolic, damages, which is likely to deter employers from routine firings.

Kahlenberg and Marvit’s proposal is not a silver bullet for unions: It doesn’t address, for instance, employers’ increasingly common refusal to bargain with workers once their union is certified. But it does speak more directly than other union-strengthening proposals to Americans’ belief in individual rights, which have expanded steadily since passage of the 1964 Civil Rights Act, even as workers’ nominally protected right to organize has been shredded. For a nation short on plausible plans to reestablish broad prosperity, Kahlenberg and Marvit offer hope that we can rebuild our middle class by affirming our most distinctly American values.

(c) 2012, The Washington Post.