Tuesday, January 11, 2011

" Bring Back the Unions " An Excerpt From Tom Hartman's New Book , Rebooting the American Dream: 11 Ways to Rebuild Our Country

"Only a fool would try to deprive working men and working women of their right to join the union of their choice."

— Dwight D. Eisenhower

Bring Back the Unions:

Probably the most visible evidence of a strong middle class—in every nation in the world—is a strong and vibrant union movement.
In Europe’s industrial powerhouse Germany, for example, not only are virtually all industries unionized but the law requires that half of the members of the boards of directors of every corporation in the country be composed of representatives of the workers via the union. It was one of those little things—like a national health-care system—that Harry Truman made sure got slipped into German law as the nation was being rebuilt from the rubble of World War II. The timing was particularly ironic in that at about that time—1947—the U.S. Congress had been taken over by Republicans, who, over Truman’s veto, passed the Taft-Hartley Act that legalized the union-busting for which Reagan became
so famous.
Ever since 1947 American labor unions have been fighting an
uphill battle, and every loss for organized labor has been a loss for the middle class.
“Supply-side” insanity aside, any real economist can tell you that a nation’s economy grows because wages grow, increasing the purchasing power of an economic class that spends most everything its earns.
As wages go up, purchases go up. As purchases go up, demand goes up. As demand goes up, entrepreneurs will notice opportunities to meet it and create new products and start new businesses and then hire people to create the product or service they noticed.
It all begins with increasing wages.
And in America, from the founding of our republic until around 1980—about 200 years—the growth of wages had been on a steady upward trajectory. Wages produce demand, and in a supply-and-demand economy such as we have, supply is created by productivity.
Interestingly, the increase in wages pretty much perfectly tracked the increase in industrial productivity from 1786 until 1980. People earned more, and they bought more (there were hiccups for several of our large wars, but they leveled out as soon as the wars were over). As people bought more, industry became more productive both in efficiency and gross output. Supply and demand were in balance.

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