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Our Descent Toward Third World Status

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The long-term outlook for Americans who work for a living is indeed bleak. Doubtless, there will be some ups and downs, but an unprecedented combination of factors makes it likely that the downward trend will continue for them. For most people, the future promises lower quality jobs, at lower pay rates, with degraded working conditions, and fewer benefits. They can also anticipate reduced retirement income, and less comprehensive medicare. Financial insecurity and unemployment are likely to be regular features of their lives.

The prospects are quite different for big corporations and the super-rich. The beneficiaries of the factors hurting the general population, are doing just fine, and are likely to continue to prosper. In general, it seems likely that the US will increasingly resemble third world countries such as Mexico, characterized by a small, wealthy elite dominating a population of poor people, with a layer of people clinging to middle class status. One big difference is that we will probably remain the world's foremost military power.

If this appraisal is not dismal enough for some people, I could discuss the assault on the Bill of Rights and our democracy in general, the real danger of a US police state, ongoing US military actions all over the world, the grossly neglected climate change threat, and other environmental and health problems. But, in this essay, I will confine myself to justifying the assertions made in the opening paragraphs, and suggesting how we might be able to turn things around.  

Some history

Initially, the situation for American workers was not too bad. In the early days, a large portion of Americans were independent farmers, an option open to many, since land was cheap. There were numerous small enterprises, each employing just a few people. Examples were stables, blacksmith shops, small general stores, barber shops, small stage coach companies. There was no great social gap between workers and employers. Dissatisfied employees were usually able to find other jobs. Those who failed in this could try farming.

Eventually, by the end of the 19th century, opportunities for starting minimal farms diminished significantly, and a large proportion of jobs were with large corporations operating railroads, mines, textile mills, steel mills, etc. Negotiations between a worker and a corporation over pay and working conditions were very different from what they had been between an apprentice and a master blacksmith. Immigration increased, bringing in people willing to work harder for less pay. The net result was not a happy one for most workers.

This led to the formation of unions, which employers did not take kindly to [Unger-Unions]. Violence, to the point of gun battles, resulted when failed negotiations led to strikes. With the government almost always siding with employers, it was rough sledding for most workers and their unions. The fading out of the farming alternative did not help.

The onset of the great depression, and the birth of the New Deal, was a major turning point. Under the Roosevelt Administration, the government attitude toward organized labor changed from hostility to mild support, characterized by the NLRA (National Labor Relations--or Wagner--Act). This, combined with the industrial surge associated with WWII, led to a huge growth of effective labor unions, that resulted in relatively good times for working people. Even those not in unions (the majority) benefited, as many employers improved pay and working conditions in efforts to stave off the unionization of their employees.

The first step in the reversal of labor's good fortune was the 1947 passage of the Taft-Hartley Act, which undermined the beneficial effects of the NLRA. Gains for workers slowed, and then ceased. Things have been going downhill for workers ever since. Why?

What is going wrong?

The process of getting an employer to recognize a union has become increasingly difficult since 1947. In addition to the effect of the Taft-Hartley Act, appointees to the National Labor Relations Board have become increasingly unsympathetic to union organizers. Court decisions have weakened the union-supporting features of the NLRA. Employers routinely hire companies specializing in union busting, and such companies have developed a great deal of expertise. The result of these factors is that relatively few union organizing campaigns have succeeded during the past several decades. Union membership in the private sector (about 6.6%) is thus at a low not seen for over a century  [Greenhouse] [BLS].

So the great majority of American workers must negotiate with employers, often large corporations, as individuals. Public sector workers are better off (35.9% union membership--mainly teachers, police, and firefighters), but not by much; their unions are weak and increasingly under attack.

Advances in technology have always eliminated jobs via automation, and this continues to happen [Unger-benefits].

From the start of the industrial age, a standard technique for depressing wages has been the importing of workers from low-pay countries. This practice continues today and is an important factor in minimizing the income of workers ranging from hotel chamber maids and farm workers, to nurses and engineers [ Unger-Immigration] . Congress is now debating legislation to further bolster this process, including an amnesty for millions of illegal (the politically correct term is "undocumented") immigrants, increasing immigration quotas, and further increasing the number of temporary visas and green cards for engineers, programmers, and others.

The combination of automation, increased immigration, and the demise of unions would suffice to put most workers back to their lowly status prior to WWI. But there is another, new, unprecedented, and powerful factor, not involving classic business cycle fluctuations, that is further exacerbating the downward plunge.

Until roughly the late seventies, manufacturing was a distinctive feature of the US economy. It grew continually (with fluctuations due to business cycles). The corporate elite then apparently decided that they could make more money by taking advantage of cheap labor in other countries, such as China. They began shutting down US factories, and either opening new factories in low-pay countries, or contracting to have products made for them by manufacturers in those countries. 

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I am an engineer. My degrees are in electrical engineering and my work has been in the digital systems area, mainly digital logic, but also computer organization, software and theory. I am a Professor, Emeritus, Computer Science and Electrical (more...)

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Many Americans are in trouble. The unemployment ra... by Stephen Unger on Wednesday, Oct 30, 2013 at 12:01:42 AM
I am not that pessimistic.The situation is bad but... by BFalcon on Wednesday, Oct 30, 2013 at 6:52:41 AM
To BFalconPlease give some examples of recent chan... by Stephen Unger on Wednesday, Oct 30, 2013 at 9:56:05 AM
Most important is the change in the voters' percep... by BFalcon on Wednesday, Oct 30, 2013 at 12:01:39 PM
Bfalcon: "Most important is the change in the vote... by Stephen Unger on Wednesday, Oct 30, 2013 at 5:00:37 PM
You seem to be very bitter.I did not "disparage" o... by BFalcon on Wednesday, Oct 30, 2013 at 5:50:58 PM
"Government never of itself furthered enterprise..... by Ethan Hollow on Thursday, Oct 31, 2013 at 8:09:03 AM
Well this was to be expected when you use worthles... by Bill Johnson on Wednesday, Oct 30, 2013 at 9:04:19 AM
Since you asked -- a tad less empty, minority-bash... by Robert S. Becker on Wednesday, Oct 30, 2013 at 2:22:04 PM
Glad you liked it! And since you said it, I thorou... by Bill Johnson on Wednesday, Oct 30, 2013 at 3:31:57 PM
We all agree. It is so funny.... by BFalcon on Thursday, Oct 31, 2013 at 8:25:40 AM
Mr. Johnson figures if he plays enough with words,... by Robert S. Becker on Thursday, Oct 31, 2013 at 11:00:57 AM
I meant it in a satirical way.We all agree that hi... by BFalcon on Thursday, Oct 31, 2013 at 11:31:49 AM
What role do you think the UN has had in forming U... by Adam Smith on Wednesday, Oct 30, 2013 at 7:23:30 PM
You do not know your history. The UN basically too... by Bill Johnson on Wednesday, Oct 30, 2013 at 8:28:25 PM
Maybe we don't know the history but you don't unde... by BFalcon on Thursday, Oct 31, 2013 at 8:24:08 AM
And here I could have sworn that for eight years C... by Robert S. Becker on Thursday, Oct 31, 2013 at 11:05:25 AM
I believe that somebody said that when Churchill w... by BFalcon on Thursday, Oct 31, 2013 at 11:39:34 AM
This is a perfectly clear question that received n... by Robert S. Becker on Thursday, Oct 31, 2013 at 11:36:19 AM
BRAVO, well researched and presented. The problem ... by lyle gray on Wednesday, Oct 30, 2013 at 9:08:10 AM
Isaw all this happening back in the time of Reagan... by kappie on Wednesday, Oct 30, 2013 at 9:45:08 AM
  Stephen, That's an outstanding arti... by Mark Whittington on Wednesday, Oct 30, 2013 at 10:08:20 AM
Patriots and Native Indians and military.... by Bill Johnson on Wednesday, Oct 30, 2013 at 10:31:10 AM
Hey, but the stock market broke yet another (artif... by 911TRUTH on Wednesday, Oct 30, 2013 at 11:28:43 AM
If the BRICs have their way, the U.S. will be thir... by Jim Miles on Wednesday, Oct 30, 2013 at 1:38:19 PM
Absolutely and they will asked for it every step o... by Bill Johnson on Wednesday, Oct 30, 2013 at 3:32:48 PM
Soon before Dubya left office Joseph Stiglitz said... by Guglielmo Tell on Wednesday, Oct 30, 2013 at 5:57:27 PM
Wast majority Americans were forgoten in 19th cent... by Ethan Hollow on Thursday, Oct 31, 2013 at 7:49:06 AM
There are many who believe making economic growth ... by CASSE3 on Friday, Nov 1, 2013 at 2:09:09 PM