Sunday, April 29, 2012

Targeting Unions And The Middle Class

Back in March, Mitt Romney revealed at a fund-raiser

But the role I see that ought to remain in the president’s agenda with regards to education is to push back against the federal teachers unions.      Those federal teachers unions have too much power, in some cases, they overwhelm the states, they overwhelm the local school districts. We have got to put the kids first and put these teachers unions behind.

Romney wasn't asked what "federal teachers' unions" but he was probably trying to conflate two Repub stereotypes-  teachers unions (proxies for unions generally) and the federal government.

Only about 12% of American workers were urionized as of about a year ago, and the numbers aren't getting any better.    The drop in union membership has had a predictable result.       Last September, Michael Morrison reported

Bruce Western, a professor of sociology at Harvard University and Jake Rosenfeld, a professor of sociology at the University of Washington, decompose wage inequality, focusing on partitioning wage inequality due to the decline in private union membership.

Accounting for the decomposition of wage inequality Western and Rosenfeld find deunionization explains a third to a fifth of the growth in inequality, which approximates the comparable effect of growing stratification in wages by educational achievement. The effect of declining union membership is striking, having a greater effect on wage inequality among men compared to women. The gender effect is consistent with the large decline in private sector union membership among men.  The joint effect of deunionization and increasing returns to education explains most of the rise in men’s wage inequality.

Western and Rosenfeld’s findings are consistent with a number of other studies which attribute a sizable share of the growth in wage inequality since 1979 to the erosion of union coverage (Freeman 1993; Card 1991; Dinardo et al. 1996; Blackburn et al. 1991; Card et al. 2003; Blanchflower and Bryson 2002). Several studies have shown that deunionization is responsible for at least 20% of the large increase in wage inequality (Mishel et al. 2003).

The correlation between the decline in union membership and that of middle class incomes is startling, as graphically displayed (from CAP using union membership rates from Hirsch, Macpherson, and Vroman and middle class share of national income from the US Census Bureau) below:

This is one of Mitt Romney's major prescriptions to address the decline of the middle class:   eviscerate teachers' unions, after which other public sector unions (and, eventually, the few remaining private sector unions) will begin to topple.       As the unions disintegrate, their ability to negotiate for wages and benefits of middle- and working class- workers will degenerate, as Romney, who passes himself off as an economics guru, surely understands.    The gap between the middle class and Mitt Romney's Class of 1% will expand further.    But, then, that is the point, isn't it?

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