Making Labor Pay: Recent battles in Wisconsin and San Jose show why we need universal pensions

Source: Katherine Sciacchitano, Dollars & Sense, no. 302, September/October 2012

The political economy of the recovery is making the United States even more unequal than it was during the bubble years. Incomes fell across the board during the crisis: median family income is 6.3% below what it was in 2001. But the top 1% garnered 93% of income growth in the first year of recovery. Housing, still the main source of wealth for middle-income families, remains depressed while stocks are close to pre-crash highs. Moreover, the drive for more tax cuts for the wealthy continues. And policy initiatives to cut Social Security, Medicare, and Medicaid would weaken the safety net even as it is most needed.

A spate of attacks on state and local public-sector pensions now threatens to make inequality even more entrenched and painful, and to undermine both short- and long-term economic growth.

The power of labor is dead center in this agenda. Despite a long-term decline in workers covered by union contracts, unions have over 16 million members: they are still the social force most capable of combating the assault on workers’ incomes and militating for greater equality. Crippling their political power therefore remains both a tactical and a strategic objective on the right. With only 6.9% of workers in the private sector covered by union contracts, versus 37% in the public sector, public-sector unions are bearing the brunt of the attacks. And public pensions are the battering ram.

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