Over the last thirty years, working members of Alaska’s and the nation’s families have worked longer hours, harder, and smarter. The result has been a huge increase in productivity. According to government statistics, from 1980 to 2008, nationwide worker productivity grew by 75%. This is impressive, but American workers never saw most of it in their wallets. Inflation-adjusted average wages increased by only 23%. Workers were compensated for less than a third of their productivity gains.
As a result, real wages, health benefits, and pension coverage stagnated or fell for the bulk of the work force during that period, and recent years have been worse. According to the Economic Policy Institute, from 2000 to 2007, the inflation-adjusted income of the median family fell by $2,000 – an unprecedented decline. Virtually all of the nation’s economic growth has gone to a small number of extremely wealthy Americans. Meanwhile, the “American dream” has been increasingly sustained by skyrocketing personal debt.
As I drive and walk around town I see predatory payday lenders saturating the lower-rent neighborhoods. The bottom has fallen out for the working middle class across the nation. How can Alaska’s working middle class families climb out of this plummet to the financial bottom?
For many, organized labor may be a very real solution. Union members in Alaska and across the country earn significantly more than non-union workers. Over the four-year period between 2004 and 2007, unionized workers’ wages in Alaska were on average 9.7 percent higher than non-union workers with similar jobs. That translates to a union average premium of $2.06 more per hour in 2008 dollars compared to their otherwise identical non-union counterparts. In addition, union workers are more likely to have health benefits, and more likely to have a good retirement system with a pension.
According to a study by the Center for Economic Policy Research, if unionization rates in Alaska were as high now as they were in 1983, and the current union wage premium remained constant, new union workers in Alaska would earn around $50 million more in wages and salaries per year. Non-union workers would also benefit as employers would likely raise wages to match what unions would win in order to remain competitive. That would be a huge boost to our economy, and to the economic security of those families.
Nevertheless, union coverage rates in Alaska have been declining for several decades due to a never-ending barrage of legislation and corporate tactics meant to siphon worker income away from families and toward the corporate wealthy. In 1983, the first year for which state-level unionization data is available, 29.3 percent of workers in Alaska were either members of a union or represented by a union at their workplace. By 2008, that portion declined to 24.7 percent.
How can we redress this imbalance so middle-class Alaskans can earn their way into the middle class rather than borrow their way into the fleeting illusion of economic security? Consider publi policy that reduces barrier to organizing, such as the Employee Free Choice Act. Such legislation could be a powerful tool that allows American families to pull themselves out of debt and into the middle class by their own bootstraps.
Better paid families would ultimately put more cash into the local economy. And one last point — an important one. This is a private sector solution that would result in more taxes being paid by a stronger middle class, not taxes being used to bail them out.
