Wednesday, January 19, 2011

It's not the economy, stupid, it's the corporations

The reason for persistently high unemployment in the United States is too much corporate power, writes David Leonhardt in a great column in today's New York Times. Leonhardt writes that
For corporate America, the Great Recession is over. For the American work force, it’s not.
Even though our economy -- as measured by GDP -- is doing better than the economies of Britain, Germany, Japan or Russia, our unemployment rate is higher, according to a new worldwide Gallup poll released today.

Leonhardt suggests an obvious reason for that is the balance of power between employers and employees.
Relative to the situation in most other countries — or in this country for most of the last century — American employers operate with few restraints. Unions have withered, at least in the private sector, and courts have grown friendlier to business. Many companies can now come much closer to setting the terms of their relationship with employees, letting them go when they become a drag on profits and relying on remaining workers or temporary ones when business picks up.
(TeamsterNation would also argue that employers misclassify workers to deprive them of bargaining power and drive down their wages and benefits.)

Leonhardt predicts high unemployment for years to come, even under a best-case scenario. He expects the U.S. unemployment rate will stay above 6 percent for the next five years. As a solution, he suggests what we've been advocating since 1903: strengthening unions. Leonhardt acknowledges that companies like AT&T, GE and Southwest Airlines have thrived with unionized workers,
...and study after study has shown that unions usually do benefit workers. As one bumper sticker says, “Unions: The folks who brought you the weekend.” Today, unions are clearly playing on an uneven field. Companies pay minimal penalties for illegally trying to bar unions and have become expert at doing so, legally and otherwise. For all their shortcomings, unions remain many workers’ best hope for some bargaining power.