Unions: whose pay has risen with productivity

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Oct 2, 2012, 9:52:15 PM10/2/12

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They Work Hard for the Money Harold Meyerson October 1, 2012

An economic anomaly: Unionized longshoremen and steelworkers experience wage gains to match soaring productivity.

As work becomes increasingly a matter of machines building or moving other machines, workers either lose their jobs or—if they are fortunate enough to keep their jobs—become vastly more productive. Productivity surged in the U.S. during the early years of the current downturn when companies laid off workers by the millions and replaced them with machines. Revenues per employee at the S&P 500, the Wall Street Journal reported, rose from $378,000 in 2007 to $420,000 in 2010.

And yet, the wages and benefits of employed Americans experienced no corresponding increase as workers’ productivity rose. Indeed, over the past quarter-century, as economists Ian Dew-Becker and Robert Gordon have reported, all productivity gains have gone to the wealthiest ten percent of Americans. In the quarter-century following World War II, by contrast, productivity and median household income both rose by 102 percent—but that quarter-century was the only period in American history when unions were strong.
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But of all the workers who labor in sectors that have been mechanized during the past half-century, sectors that have seen their productivity soar even as the number of their workers has plummeted, only unionized longshoremen and unionized steelworkers have experienced such wage gains (the steelworkers don’t get longshore-level wages, but at U.S. Steel and Arcelor Mittal, veteran steelworkers do make about $70,000 annually for operating the highly sophisticated machinery that makes today’s steel). The irony here is that the usual critics of unions complain that these workers are overpaid at the same time they criticize unions for standing in the way of technological progress because it costs jobs. But the longshore unions (the West Coast union particularly) and the United Steelworkers both struck deals enabling the technological upgrading and workforce upskilling and downsizing of their industries, so long as the workers shared in the benefits. They are the very model of adaptive, forward-looking unions. And as wages fall in virtually every other industry where productivity is soaring, they make the case why a mechanizing, high-tech economy in particular needs unions: Without them, American workers will grow more and more productive and get nothing out of it.