Strong unions are a fundamental basis for a vibrant middle-class. Why? Well, the answer is simple! Collective bargaining ensures that workers are paid respectable wages and benefits, which lifts incomes for the economy’s overall workforce. Therefore, it should be no surprise that the shrinking of the often touted middle class in the U.S. also coincides with a decline in union membership. If the public is truly concerned about strengthening our country’s middle class, as so many people say they are, the most beneficial road to take is one that strengthens America’s collective bargaining potential.
I am an American currently living in Norway, where unions are well organized, well funded, and widely participated in. Norway ranks as one of the most economically developed and democratic countries on the planet. Based on income figures alone, the size of the middle-class here is about 85%, again among the world’s largest middle-class countries.
America is undoubtedly one of the world’s most robust democracies and vibrant economies. We have deep rooted traditions of civil liberties, perhaps the deepest in the world. Like Norway, we have a hard working labor force and an entrepreneurial spirit that is the basis of economic growth. Despite the common suggestion that “so many around the world hate us,” quite the opposite is true. For so many people struggling to survive in poorer countries, America, with our democracy and economy, is indeed a symbol of hope and aspiration and one that is something to be proud of.
But pride in our country only gets us so far. Vision, commitment, and good choices are also essential to the mix. And, while we may have vision and commitment, we have not made some of the best policy choices, specifically those that will build a national economy with a goal of growing a robust middle-class.
While we should have been ensuring that the overall number of low income families declines while middle class families expand, what has instead happened is America’s middle class families increasingly find themselves with smaller and smaller incomes. Data from the Department of Labor clearly shows that income inequality in America has grown steadily since the 1970s. Today, the scale of inequality between the poorest and wealthiest citizens approaches the levels of Mexico and Argentina, while far surpassing those countries where workers have more control over their economic station, such as Germany, France, and Sweden. Census Bureau data again shows that over these same decades, the incomes gains of the top 20 percent have far outpaced income gains of the remaining 80 percent. Since 1980, the poorest 20 percent of America’s citizens have seen incomes rise 12 percent. The middle income earners have seen incomes rise 16 percent. Yet, the wealthiest 5 percent have seen their incomes rise some 31 percent. Correspondingly, the share of national income has grown considerably among the top 20 percent, while shares for the remaining 80 percent have decline.
The numbers are even more striking when looking at the growth in income of the top 0.1 percent. As a New York Times column cited in 2005, no other income group has grown more in the past few decades than this small, but highly privileged group. In 1980, their average income was $1.2 million, but grew to $3 million by 2002. As a group of about 145,000 people, their share of the national income is a whopping 7.4 percent.