Unregulated capitalism doesn’t work; it is an unmitigated disaster for the middle class.  Capitalism works best when workers have bargaining power and companies have to share the financial benefits of the company with its workers.  Capitalism is always a tug of war between the working class and the capitalist class.  It used to be that union members worked at factories and within America’s booming manufacturing industry and everyone was happy … there was a social contract that existed where worker’s wages rose as productivity and thus profitability rose.  Unfortunately – that is no longer the case.

Manufacturing has moved to low pay countries where people are willing to work for slave wages and horrible working conditions just to survive.  Americans can’t compete with $3 an hour wages in Vietnam; we can’t survive on that and we shouldn’t have to.  Now – America has transitioned to more service and retail oriented industries and away from manufacturing.  Most retail and service companies like Wal-Mart, McDonalds, Subway have made billions in profits meanwhile workers are getting paid minimum wage or just better than that.  And since those workers have no bargaining power because they are not unionized … they get scraps while the investors are living like George and Weezy.

As we have said HERE – corporate profits are at an all time high while wages are at an all time low.  Unless government taxes corporations more … it can not influence corporations to pay workers more until unemployment reduces; reducing unemployment is a long, hard road to travel.  In fact – corporations are sitting on $5 TRILLION in cash reserves (source); they simply have no incentive nor any motivation to pass those profits on to workers despite productivity being at an all time high.

As we have said HERE:

Over 25% of private jobs paid less than $10 an hour.  52% of those low wage jobs came from these five industries:

As the Atlantic notes HERE:

In the second half of the 20th century, the information age did a few things that badly hurt unions. First, robots replaced unskilled workers in factories. Second, IT created complicated machines and programs that required something more than assembly-line competence. (Third, although this isn’t prominently featured in the article, multinational companies got savvier about offshoring cheap labor that wasn’t automated.) Just as Ford’s innovation had disproportionately empowered unskilled workers, who are more likely to unionize, the information age had had disproportionately empowered skilled workers, who are more likely to not unionize.

As heavily-unionized industries declined, non-skilled workers lost their bargaining power — and the middle class lost its share of overall income. The authors conclude: “The decline of the assembly line economy and the rise of the information age during the second half of the century [led] to the ∩-shaped pattern of unionization and the ∪-shaped one for income inequality.”

Rich Yeselson says the death of unions has been a long, slow death spiral HERE:

Yes, why don’t people organize their own unions, despite all the risks, rather than resent those who are union members? That was the question then, and that is the question now. But, mostly people aren’t even angry enough to ask it anymore. In his great and enduring work, The Making of the English Working Class of 1963, the British historian, E.P. Thompson, wrote of the emergence of early19th century British working class consciousness. Thompson showed how each generation of British workers of that period passed along to their sons and neighbors a broad world- view that asserted class and national pride. It is an American form of that historical memory that we have forgotten. There is now only a very thinly described transmission of working class solidarity and the role unions play in inculcating it.

We would be well served, however, to remember the power that union leaders like Wimpy—like Reuther and Lewis before him—once wielded. That power pissed a lot of people off, but inspired others. The results in Wisconsin ratify that we’re about to find out what it’s like when people like him no longer piss off or inspire pretty much anybody. There has never been an advanced capitalist country with as weakened and small a union movement as today’s United States. (There are very few union members in France, for example, but French unions still have the vast majority of the workforce under union contract.) And according to academic evidence cited in Tim Noah’s recent book The Great Divergence, which Nocera uses as the occasion for his column (and which I reviewed in The American Prospect), the decline of the labor movement is one of the primary causes of American income and wealth inequality, particularly among male workers.

But as the Washington Post explains … Canada has thriving unions and the difference between the two countries is government’s role HERE:

The biggest reason for the two nation’s contrasting fates has to do with labor law. Canada’s rules for union organizing are largely overseen by its provinces, and, until recently, Canada’s rules made it much easier for workers in the private sector to form a union. A majority of employees in the workplace simply needed to sign cards indicating their desire to join—a process known as “card check.”

In the United States, by contrast, there’s usually a second step involved—a secret-ballot election is held by the National Labor Relations Board, and usually only after a lengthy period in which employers can campaign against the union. “During the time between the petition and the election,” Warner writes, “which is often delayed by employer opposition and can last for months, employers usually run anti-union campaigns – often committing illegal acts of coercion, intimidation, or firing – in an attempt to discourage their employees from voting to unionize.” Research suggests (pdf) that U.S. employers have become remarkably adept in fending off unionization drives, often with the help of anti-union consultants.

Warner also points to a second key policy difference. In Canada, workers who have formed a union can seek arbitration to ensure that they actually get a contract. By contrast, in the United States, employers have much more freedom to delay that process. As John Schmitt notes, “even after workers win an election, they only reach a contract in a bit over half the cases.”

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