Working through the Obstruction on Labor Day

It’s Labor Day and Congress is coming back into session. Time to step back to see where things stand, and what Congress can do about it.

Start with the state of working America. It’s Labor Day after all, a holiday earned by organized labor and dedicated to working people. The Census Bureau just published new figures for 2006 that explain why working people feel so stressed. Productivity continues to rise and corporate profits along with it. But working people aren’t sharing the gains.

• Poverty ticked down a hair last year. That’s good news but it’s the first decline on President Bush’s watch. Poverty rates are higher than when he took office(12.3% in 2006, up from 11.3% in 2000).

• The number of people without health insurance continues to rise, up to 15.8% last year. 47 million Americans lacked health insurance in 2006, an increase of 8 million since Bush took office.

• Median annual earnings for full-time, year-round workers fell last year, the third year in a row. The White House prefers to point to the rosier “household income” figure, which did creep up 0.7% ($360) last year. But don’t fall for it. Household income is down $956 since 2000. It rose that hair last year because more household members are working, and for longer hours. But they are getting paid less for their work. There’s no getting around the math.

• The trend to re-classify full-time workers as “independent contractors” continues to rise. Although the same work is done by the same people, contracting it out allows employers to dodge the minimum wage increase and terminate benefits that accrue only to “employees.” Reclassification also lets them avoid payroll taxes, a dodge that creates an invisible subsidy to corporate America in the range of $3 billion.


• The only good news is at the top of the economy. Between 2000 and 2006, the average income of the lowest fifth dropped 4.5% and the middle fifth dropped 2.5%. But the income of the top fifth increased by 1%. Not only is that good news at the top, but averaging them into the nation as a whole increases the national average, and helps to create the illusion of good news. After all, Bill Gates and I have an “average” income in the billions.

So the wages and earnings are basically flat, with a slightly downward tilt. It hurts because ordinary household expenses continue to rise. Working Americans feel the statistics when they pay the bills.

• Since 2000, premiums for employer-sponsored health insurance for families have skyrocketed. The average monthly worker contribution for family coverage in 2000 was $135. In 2000, it increased to $248 (up 84%)

• Tuition and fees at public colleges went up 37% between 2000 and 2006.

• Gas prices have doubled since 2000. The price of home heating oil increased by 50%.

Fortunately, the political situation seems to be improving. Conservative obstructionism is reaching its limits. The Employee Free Choice Act received a majority vote in both houses of Congress. But for the filibuster threat that requires 60 votes to get out of the Senate, it would have been presented to the President.

• The Employee Free Choice Act simplifies the procedures by which members of a workplace can organize for collective bargaining. It is designed to reduce harassment, intimidation and procedural obstacles used by employers when members of their work force seek to unionize. The combination of veto threat and filibuster defeated it in the 110th Congress, but supporters plan to return.

Unionization and collective bargaining are clearly associated with higher wages and better benefits. Without organized labor, we might not have Monday off. And politicians who are friendly to organized labor tend also to support progressive causes ranging from choice to the environment.

• The College Cost Reduction Act passed both chambers of the new Democratic controlled Congress. It cuts the interest rates on subsidized student loans in half, and increases funding such as Pell grants. It reverses the damage done by the previous Congress and will soon be presented to the President … though he has promised to veto it.

Stay tuned. September will be interesting.

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