Labor Day is almost upon us, and like some of my fellow graybeards, I can,
if I concentrate, actually remember what it was that this holiday once
celebrated. Something about America being the land of broadly shared
prosperity. Something about America being the first nation in human history
that had a middle-class majority, where parents had every reason to think
their children would fare even better than they had.
The young may be understandably incredulous, but the Great Compression, as
economists call it, was the single most important social fact in our country
in the decades after World War II. From 1947 through 1973, American
productivity rose by a whopping 104 percent, and median family income rose
by the very same 104 percent. More Americans bought homes and new cars and
sent their kids to college than ever before. In ways more difficult to
quantify, the mass prosperity fostered a generosity of spirit: The civil
rights revolution and the Marshall Plan both emanated from an America in
which most people were imbued with a sense of economic security.

That America is as dead as the dodo. Ours is the age of the Great Upward
Redistribution.

Labor Day is almost upon us, and like some of my fellow graybeards, I can,
if I concentrate, actually remember what it was that this holiday once
celebrated. Something about America being the land of broadly shared
prosperity. Something about America being the first nation in human history
that had a middle-class majority, where parents had every reason to think
their children would fare even better than they had.
The young may be understandably incredulous, but the Great Compression, as
economists call it, was the single most important social fact in our country
in the decades after World War II. From 1947 through 1973, American
productivity rose by a whopping 104 percent, and median family income rose
by the very same 104 percent. More Americans bought homes and new cars and
sent their kids to college than ever before. In ways more difficult to
quantify, the mass prosperity fostered a generosity of spirit: The civil
rights revolution and the Marshall Plan both emanated from an America in
which most people were imbued with a sense of economic security.

That America is as dead as the dodo. Ours is the age of the Great Upward
Redistribution. The median hourly wage for Americans has declined by 2
percent since 2003, though productivity has been rising handsomely. Last
year, according to figures released just yesterday by the Census Bureau,
wages for men declined by 1.8 percent and for women by 1.3 percent.

As a remarkable story by Steven Greenhouse and David Leonhardt in Monday's
New York Times makes abundantly clear, wages and salaries now make up the
lowest share of gross domestic product since 1947, when the government began
measuring such things. Corporate profits, by contrast, have risen to their
highest share of the GDP since the mid-'60s -- a gain that has come chiefly
at the expense of American workers.

Don't take my word for it. According to a report by Goldman Sachs
economists, "the most important contributor to higher profit margins over
the past five years has been a decline in labor's share of national income."

As the Times story notes, the share of GDP going to profits is also at
near-record highs in Western Europe and Japan.

Clearly, globalization has weakened the power of workers and begun to erode
the egalitarian policies of the New Deal and social democracy that
characterized the advanced industrial world in the second half of the 20th
century.

For those who profit from this redistribution, there's something comforting
in being able to attribute this shift to the vast, impersonal forces of
globalization. The stagnant incomes of most Americans can be depicted as the
inevitable outcome of events over which we have no control, like the
shifting of tectonic plates.

Problem is, the declining power of the American workforce antedates the
integration of China and India into the global labor pool by several
decades. Since 1973 productivity gains have outpaced median family income by
3 to 1. Clearly, the war of American employers on unions, which began around
that time, is also substantially responsible for the decoupling of increased
corporate revenue from employees' paychecks.

But finger a corporation for exploiting its workers and you're trafficking
in class warfare. Of late a number of my fellow pundits have charged that
Democratic politicians concerned about the further expansion of Wal-Mart are
simply pandering to unions. Wal-Mart offers low prices and jobs to
economically depressed communities, they argue. What's wrong with that?

Were that all that Wal-Mart did, of course, the answer would be "nothing."
But as business writer Barry Lynn demonstrated in a brilliant essay in the
July issue of Harper's, Wal-Mart also exploits its position as the biggest
retailer in human history -- 20 percent of all retail transactions in the
United States take place at Wal-Marts, Lynn wrote -- to drive down wages and
benefits all across the economy. The living standards of supermarket workers
have been diminished in the process, but Wal-Mart's reach extends into
manufacturing and shipping as well. Thousands of workers have been let go at
Kraft, Lynn shows, due to the economies that Wal-Mart forced on the company.
Of Wal-Mart's 10 top suppliers in 1994, four have filed bankruptcies.

For the bottom 90 percent of the American workforce, work just doesn't pay,
or provide security, as it used to.

Devaluing labor is the very essence of our economy. I know that airlines are
a particularly embattled industry, but my eye was recently caught by a story
on Mesaba Airlines, an affiliate of Northwest, where the starting annual
salary for pilots is $21,000 a year, and where the company is seeking a pay
cut of 19 percent. Maybe Mesaba's plan is to have its pilots hit up
passengers for tips.

Labor Day is almost upon us. What a joke.

Harold Meyerson is editor-at-large of The American Prospect. This column
originally appeared in The Washington Post.


* * *
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Labor Day is almost upon us, and like some of my fellow graybeards, I can,
if I concentrate, actually remember what it was that this holiday once
celebrated. Something about America being the land of broadly shared
prosperity. Something about America being the first nation in human history
that had a middle-class majority, where parents had every reason to think
their children would fare even better than they had.
The young may be understandably incredulous, but the Great Compression, as
economists call it, was the single most important social fact in our country
in the decades after World War II. From 1947 through 1973, American
productivity rose by a whopping 104 percent, and median family income rose
by the very same 104 percent. More Americans bought homes and new cars and
sent their kids to college than ever before. In ways more difficult to
quantify, the mass prosperity fostered a generosity of spirit: The civil
rights revolution and the Marshall Plan both emanated from an America in
which most people were imbued with a sense of economic security.

That America is as dead as the dodo. Ours is the age of the Great Upward
Redistribution. The median hourly wage for Americans has declined by 2
percent since 2003, though productivity has been rising handsomely. Last
year, according to figures released just yesterday by the Census Bureau,
wages for men declined by 1.8 percent and for women by 1.3 percent.

As a remarkable story by Steven Greenhouse and David Leonhardt in Monday's
New York Times makes abundantly clear, wages and salaries now make up the
lowest share of gross domestic product since 1947, when the government began
measuring such things. Corporate profits, by contrast, have risen to their
highest share of the GDP since the mid-'60s -- a gain that has come chiefly
at the expense of American workers.

Don't take my word for it. According to a report by Goldman Sachs
economists, "the most important contributor to higher profit margins over
the past five years has been a decline in labor's share of national income."

As the Times story notes, the share of GDP going to profits is also at
near-record highs in Western Europe and Japan.

Clearly, globalization has weakened the power of workers and begun to erode
the egalitarian policies of the New Deal and social democracy that
characterized the advanced industrial world in the second half of the 20th
century.

For those who profit from this redistribution, there's something comforting
in being able to attribute this shift to the vast, impersonal forces of
globalization. The stagnant incomes of most Americans can be depicted as the
inevitable outcome of events over which we have no control, like the
shifting of tectonic plates.

Problem is, the declining power of the American workforce antedates the
integration of China and India into the global labor pool by several
decades. Since 1973 productivity gains have outpaced median family income by
3 to 1. Clearly, the war of American employers on unions, which began around
that time, is also substantially responsible for the decoupling of increased
corporate revenue from employees' paychecks.

But finger a corporation for exploiting its workers and you're trafficking
in class warfare. Of late a number of my fellow pundits have charged that
Democratic politicians concerned about the further expansion of Wal-Mart are
simply pandering to unions. Wal-Mart offers low prices and jobs to
economically depressed communities, they argue. What's wrong with that?

Were that all that Wal-Mart did, of course, the answer would be "nothing."
But as business writer Barry Lynn demonstrated in a brilliant essay in the
July issue of Harper's, Wal-Mart also exploits its position as the biggest
retailer in human history -- 20 percent of all retail transactions in the
United States take place at Wal-Marts, Lynn wrote -- to drive down wages and
benefits all across the economy. The living standards of supermarket workers
have been diminished in the process, but Wal-Mart's reach extends into
manufacturing and shipping as well. Thousands of workers have been let go at
Kraft, Lynn shows, due to the economies that Wal-Mart forced on the company.
Of Wal-Mart's 10 top suppliers in 1994, four have filed bankruptcies.

For the bottom 90 percent of the American workforce, work just doesn't pay,
or provide security, as it used to.

Devaluing labor is the very essence of our economy. I know that airlines are
a particularly embattled industry, but my eye was recently caught by a story
on Mesaba Airlines, an affiliate of Northwest, where the starting annual
salary for pilots is $21,000 a year, and where the company is seeking a pay
cut of 19 percent. Maybe Mesaba's plan is to have its pilots hit up
passengers for tips.

Labor Day is almost upon us. What a joke.