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Levitz writes: “America’s unemployment rate is hovering near half-century lows. There are now more job openings than unemployed workers in the United States for the first time since the government began tracking that ratio. For America’s working class, macroeconomic conditions don’t get much better than this.”

Workers at a factory. (photo: Bloomberg)
Workers at a factory. (photo: Bloomberg)

New Study Confirms That American Workers Are Getting Ripped Off

By Eric Levitz, New York Magazine

07 July 18


merica’s unemployment rate is hovering near half-century lows. There are now more job openings than unemployed workers in the United States for the first time since the government began tracking that ratio. For America’s working class, macroeconomic conditions don’t get much better than this.

And yet, most Americans’ wages aren’t getting any better, at all. Over the past 12 months, piddling wage gains — combined with modest inflation — have left the vast majority of our nation’s laborers with lower real hourly earnings than they had in May 2017. On Wall Street, the second-longest expansion in U.S. history has brought boom times — in the coming weeks, S&P 500 companies will dole out a record-high $124.1 billion in quarterly dividends. But on Main Street, returns have been slim.

Economists have put forward a variety of explanations for the aberrant absence of wage growth in the middle of a recovery: Automation is slowly (but irrevocably) reducing the market-value of most workers’ skills; a lack of innovation has slowed productivity growth to a crawl; well-paid baby-boomers are retiring, and being replaced with millennials who have enough experience to do the boomers’ jobs — but not enough to demand their salaries.

There’s likely some truth to these narratives. But a new report from the Organization for Economic Cooperation and Development (OECD) offers a more straightforward — and political — explanation: American policymakers have chosen to design an economic system that leaves workers desperate and disempowered, for the sake of directing a higher share of economic growth to bosses and shareholders.

The OECD doesn’t make this argument explicitly. But its report lays waste to the idea that the plight of the American worker can be chalked up to impersonal economic forces, instead of concrete political decisions. If the former were the case, then American laborers wouldn’t be getting a drastically worse deal than their peers in other developed nations. But we are. Here’s a quick rundown of the various ways that American workers are getting ripped off:

American workers are more likely to be poor (by the standards of their nation). In the United States, nearly 15 percent of workers earn less than half of the median wage. That gives the U.S. a higher “low-income rate” than any other developed nation besides Greece and Spain.

We also get fired more often — and with far less notice. Roughly one in five American workers leave their jobs each year, a turnover rate higher than those in all but a handful of other developed countries. And as the Washington Post’s Andrew Van Dam notes, that churn isn’t driven by entrepreneurial Americans quitting to pursue more profitable endeavors:

[D]ecade-old OECD research found that an unusually large amount of job turnover in the United States is due to firing and layoffs, and Labor Department figures show the rate of layoffs and firings hasn’t changed significantly since the research was conducted.

Not only do Americans get fired more than other workers; we also get less warning. Every developed nation besides the U.S. and Mexico requires companies to give individual workers at least a week’s notice before laying them off; the vast majority of countries require more than a month. But if you’re reading this from an office in the U.S., your boss is free to tell you to pack your things at any moment.

Our government does less for us when we’re out of work than just about anyone else’s. Many European countries have “active labor market policies” — programs that provide laid-off workers with opportunities to train for open positions. The United States, by contrast, does almost nothing to help its unemployed residents reintegrate into the labor force; no developed nation but Slovakia devotes a lower share of its wealth to such purposes. Meanwhile, a worker in the average U.S. state will stop receiving unemployment benefit payments after they’ve been out of a job for 26 weeks — workers in all but five other developed countries receive unemployment benefits for longer than that; in a few advanced nations, such benefits last for an unlimited duration.

Labor’s share of income has been falling faster in the U.S. than almost anywhere else. Between 1995 and 2013, workers’ share of national income in the U.S. dropped by eight percentage points — a steeper decline that in any other nation except for South Korea and Poland.

And the American capitalist class has been claiming an exceptionally high share of national income for much longer than just two decades — as this stunning chart from the 2018 World Inequality Report makes clear:

Given all this, it seems safe to say that America’s aberrantly weak wage growth is (at least in part) the product of political decisions made at the national level. A government that provides its unemployed with unusually limited job training and benefits is one that has chosen to make it riskier for workers to demand higher wages on the threat of quitting.

Further, the OECD finds that only Turkey, Lithuania, and South Korea have lower unionization rates than the United States, a fact that can be attributed to the myriad ways American policymakers have undermined organized labor since the Second World War. And a government that discourages unionization — and alternative forms of collective bargaining — is one that has decided to cultivate an exceptionally large population of “low income” workers, and an exceptionally low labor-share of national income.

President Trump spends a great deal of time and energy arguing that American workers are getting a rotten deal. And he’s right to claim that Americans are getting the short end. But the primary cause of that fact isn’t bad trade agreements or “job killing” regulations — its the union-busting laws and court rulings that the president has done so much to abet. your social media marketing partner


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+19 # wilhelmscream 2018-07-07 14:37
Trump gets his way with SCOTUS: if u have a low pay job, it WILL become a no pay job
-2 # Robbee 2018-07-08 12:00
Quoting wilhelmscream 2018-07-07 14:37:
if u have a low pay job, it WILL become a (low) pay job

Quoting Moxa 2018-05-04 19:51:
the failure is due to the Democrats' refusal to stand for ANYTHING.

- if dems stand for nothing? please tell us why repukes had to pass huge tax cuts for bmillionaires and corporations WITH NO DEM VOTES IN CONGRESS?

albeit there are some remarkable differences between us "greater progressives" in contrast to other "lesser progressives" in and around congress, revulsion at tax cuts for bmillionaires and corporations IS NOT ONE OF THEM!

pelosi is a talking head, dems must do better! - but if you are trying to develop a "greater progressives" contrast to "lesser progressives" around opposition to working people, you have at argue better than "Democrats' refusal to stand for ANYTHING", sorry!

the dem problem is not that they are not progressive

the dem problem is not that they "refuse to stand for ANYTHING"

the dem problem is that they try to serve 2 masters - working folks and corporations



if a time comes when voters stop brainwashing each other by tv and radio, do we want to be around for that?

the evident solution is an amendment that scrubs private bucks from election ads!
+6 # Rodion Raskolnikov 2018-07-07 20:28
This is the direct result of unregulated capitalism brought to the world by Reagan and Thatcher under the banner of neo-liberalism or otherwise called trickle-down economics.

The study may be new but the problem is old. The Who got it right:

Meet the new boss
Same as the old boss

We'll be fighting in the streets
With our children at our feet
And the morals that they worship will be gone
And the men who spurred us on
Sit in judgement of all wrong
They decide and the shotgun sings the song

I'll tip my hat to the new constitution
Take a bow for the new revolution
Smile and grin at the change all around
Pick up my guitar and play
Just like yesterday
Then I'll get on my knees and pray
We don't get fooled again
+6 # BetaTheta 2018-07-07 21:44
This article does not even count wage theft, which costs workers tens of billions of dollars a year:
+9 # phrixus 2018-07-08 01:20
We have devolved from Reagan's union-busting initiatives into our current state: a full-fledged plutocracy. The USG is as corrupt as any third-world banana republic. We just conceal it better with technology. Democracy in America is barely breathing.
+7 # economagic 2018-07-08 06:06
It's always nice when rigorous research confirms what people with two functioning brain cells have always known.

OECD has played a large part in the the end of the Thirty Years War in 1945. It was founded (under a slightly different name) in 1947 to administer the European Recovery Program designed by US Secretary of State George Marshal ("the Marshall Plan"). Its primary purpose was to help the many small countries of Europe that had been at war for millennia to present a common front to check the westward expansion of the Soviet Union (USSR).

Remarkably, its administrators have been among the most level-headed in the world (for economists), even through the Thatcher era in the UK, until the free-for-all of the post-Soviet era and especially the past decade. Since 1970 the American Economic Association and the British Economic Association have been among the worst of a bad lot. In economics the devil is in the details, and the details of the way unemployment is analyzed and reported in the US are designed in part to paint a picture rosier than the realities. Changes in economies worldwide from "globalization" and the internet further disconnect the theory from the reality. I do not know whether the OECD team applied the same methodologies in analyzing all nations or whether they took the national statistics at face value. If the latter, the real story in this country is likely even worse.

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