Decline of unions = decline of middle class?

A Toronto Labour Day parade in 1967, a time when unions were strong. In the U.S., 28 per cent of workers belonged to a union in 1968; by 2010 the number had dropped to 12 per cent.

 

Antonia Zerbisias, The Toronto Star: 

 

Organized labour is getting organized again.

The evidence is just about bulletproof: When union membership thrives, so does the middle class.

Over the past 18 month, studies by Harvard University, the non-partisan Center for American Progress (CAP), the union-backed Economic Policy Institute (EPI) in Washington, D.C., and the Pew Research Center, also in Washington, have shown an incontrovertible correlation between the rate of unionization and the percentage of the nation’s total wealth held by the middle class.

As unions picked up members through the first 70 years of the last century, the gap between rich and poor narrowed. As unions were weakened by free-trade agreements, globalization and anti-labour legislation since the 1980s, the gap goes off the charts.
 

In the U.S., the drop in the well-being of the middle class — usually defined as the middle 60 per cent of households in terms of income — has been precipitous.

In 1968, when 28 per cent of workers were unionized, the middle class claimed 53.2 per cent on the nation’s income, according to the CAP. In 2010, union membership had plummeted to 12 per cent, while the middle-class share of income dropped to 46.6 per cent.

Meanwhile, the proverbial “1%” saw its share more than double, from 9 per cent in 1974 to 23 per cent in 2007.

Last month, Pew reported the middle class is struggling to maintain its standard of living.

Meanwhile, CEO salaries are skyrocketing, states the Washington-based Institute for Policy Studies (IPS). Last year, 25 of the top 100 U.S. corporate leaders received more in their paycheques — $20.6 million on average — than their companies paid in taxes, and that includes companies that got government bailouts. 

As for the top 50 “layoff leaders” — those companies that fired the most workers — their CEOs averaged almost $12 million a year in salary.

In Canada, the disparity is not nearly so dramatic: “Union density” has dropped to 31.5 per cent in 2010 from 37.6 per cent in 1981, with most of that fall-off in the private sector.

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