Yves here. Some of this Real News Network interview with Richard Wolff, who is currently a visiting professor at the New School, on a new ILO report on workers’ wages covers familiar ground. Wage growth in advanced economies has been much slower than that in emerging economies, in large measure due to multinational moving jobs overseas to exploit lower labor costs. But the interesting part of the conversation is Wolff’s argument on why this is in fact not defensible conduct and what countries like the US ought to do about it.
Wolff praises Germany at the end. Not everyone would agree with this assessment. Germany implemented a series of labor market reforms known as the Hartz reforms from 2003 through 2005. Here are two discussions: German labour reforms: Unpopular success and Hartz IV reform did not reduce unemployment in Germany.
ESSICA DESVARIEUX, TRNN PRODUCER: Welcome to The Real News Network. I’m Jessica Desvarieux in Baltimore.
The International Labor Organization just released their global wages report.
Now joining us to discuss that report is Richard Wolff. Richard is the professor emeritus of economics at the University of Massachusetts Amherst, where he taught economics for 35 years. And he’s currently a visiting professor of the graduate program in international affairs at the New School University in New York.
Thanks so much for joining us, Rick.
RICHARD WOLFF, PROF. ECONOMICS, THE NEW SCHOOL: Thank you very much for inviting me.
DESVARIEUX: So, Rick, what really stood out to you in this report?
WOLFF: What stood out for me this ILO report are, first, the comparison of what has happened to workers’ wages. And the comparison is between the advanced economies–Western Europe, North America, and Japan on the one hand, and the so-called emerging, major emerging economies, and there they really mean China, but also India, Brazil, and a few other countries like that.
And here’s the stunning result. Looking over the last decade that we’re talking about–eight to ten years–wages have been rising much, much faster in the emerging economies than in the old established capitalist economies of Western Europe, North America, and Japan. And they’re not even close. Wage increases are in the three, four or five, six percent a year range in China, for example, and they’re in the 1 to 2 percent range in North America and Western Europe and Japan.
In other words, the capitalists’ decisions made over the last 30 years to move production out of North America, out of Western Europe, out of Japan, and into China, India, Brazil, and so on, has meant that wages stagnated in the old industrial centers like the United States, and they are going up very quickly in China. It’s a cautionary tale for people who want to be critical of the position of workers in China. If you want to understand China and you want to understand the United States, the ILO report makes it clear that wages are rising where capitalists have gone, and they’re not going anywhere in the places that capitalists have abandoned. And the United States is in the latter category.
DESVARIEUX: Let’s talk about why capitalists have abandoned the United States, Rick, because some people are going to say that they abandoned it because unions got too strong, they were demanding too much. People just can’t afford to pay people those kind of wages and have those kind of pensions. What do you say to that kind of argument?
WOLFF: I say that you must be living in a different planet from me. Let me give you a simple example. The number of people in the private sector–and that’s what we mean when we talk about capitalists making a decision, not a government job, a private sector job where your employer is a capitalist making a profit–in the capitalist private sector of the United States, less than 7 percent of workers are represented by a trade union. That’s right–6.9 percent of private sector employees are in a union. To talk about unions being strong, with that number, is a hallucination. To imagine that unions are shaping the level of wages in our country by their strength is another hallucination. This has nothing to do with our situation.
And, indeed, over the last 30 years, wages and the United States have not gone up. They’ve been stagnating. That’s in part what the ILO report indicates. So if capitalists are leaving, it’s not because wages are rising here. The reason capitalists are leaving is because wages are very low in those parts of the world that used to be poor colonial backwaters of the West.
Those countries have now stood up. They’re developing. They’re independent. And they want jobs for their people. And they know they have a powerful weapon, namely, the historically low wages. So a company leaves California or Cincinnati or Pittsburgh or Detroit and moves to Shanghai or Hyderabad or somewhere else, particularly in Asia, to take advantage of the fact that they can pay people there one-third, one-quarter, or less of what they would have to pay an equivalent worker here in the United States. The companies therefore make much more profits. And as any honest member of the business community will tell you, they’re in the business to make profits, and they left the United States because they could make more money over there.
But we as Americans have to then face something. For decades we have been giving these companies all kinds of benefits–tax holidays, subsidies, government support programs, government orders for whatever it is they produce. And states have done the same. And cities have done the same. But those companies took all those benefits, built themselves up, and have now decided hasta la vista, baby. I’m leaving. I’m going someplace else where I can take still more money. And I’m going to leave behind an empty factory, a parking lot with weeds growing out of it, decimated families who’ve lost jobs, decimated communities who have no more revenue coming in to the city or the state government because the jobs aren’t there, because the companies left town.
This is a catastrophe for the people left behind. And one of the ways it shows up in the United States, documented by this ILO report, is the stagnant wages, the wages that in North America, Western Europe, and Japan just aren’t going up hardly at all, while they go up very sharply in those areas to which the capitalists went to take advantage of their lower wages.
DESVARIEUX: Rick, if I’m one of those people that was left behind, as you describe, what do you do about it? ‘Cause it sounds pretty grim. Can you even compete with other workers? Should you be competing with them? What do you do?
WOLFF: Well, the solution is actually quite easy. When a capitalist leaves, it’s because he can make more profit by moving to China. Suppose you said to the business man or woman, we’re going to close that option, you can’t do that. Well, then the ingenuity and the creativity of that business person will have to be redirected someplace else.
There’s an example from child labor that can make this point. Once upon a time in American history, we allowed as a nation children to be employed, as young as four and five years of age. Capitalists in large numbers, particularly in the garment industry, but in other industries too, hired children. They paid them much less than they paid adults, and so they found great profits in getting work done by underpaid or low-paid children.
Reformers came back and said, my God, this is inhumane. Those children should be in school. It’s not healthy, not physically, not mentally, for them to be in sweatshops and factories and all the rest of it. And the capitalists said, my God, that’s going to damage our profits, and if you damage our profits, we won’t be able to help this economy grow. And the reformers said, well, we’re sorry, you’re going to have to find another way to grow. And laws were passed that made child labor illegal, and we didn’t do it anymore, and we haven’t done it for a long, long time.
Guess what. Did capitalism collapse? Hardly. Did businesses fall apart? Not at all. What you did was you made businesses find other ways to improve their profits–new technologies, new customers, new raw materials, new commodities to produce. There are lots of ways for businesses to make money. And when you cut off something that society doesn’t want, it’s not the end of the world.
Well, here’s my example: cut off the ability to abandon a city like Detroit or Cleveland or Camden, New Jersey, or thousands of other American cities suffering from this problem. Say to the businesses, you can’t take all that we’ve given you over the years in subsidies and tax breaks and special courses in the high schools to get kids ready to work in your business. You can’t walk away from that to go get profits someplace else, leaving a social disaster behind. That’s as unacceptable to us as child labor was years ago. And you close the door on factories leaving, and you say to the businesses, you’re just going to have to find less socially destructive ways to improve your business.
They overcame the problem with no longer being able to hire children. And guess what. They can also find ways to improve their business situation without laying waste to city after city in this country. And the social consequences of that are just beginning to percolate into our consciousness in places like Ferguson, Missouri; Cleveland, Ohio; the poorer sections of New York; etc.; etc.
DESVARIEUX: Rick, but I can just hear people, like, on the business side saying, but I own this company; how can you tell me what to do with something that I own?
WOLFF: Same story as with the child labor: it’s my business; I want to be able to hire who I want. Answer of the society: very nice, sir; it is your business; but you can’t do that, because it is socially unacceptable behavior.
Let me give you another example that’s more modern. There was a time when an employer felt, particularly if they were males, that they had all kinds of sexual rights with their female employees. And they didn’t hesitate in many examples–and we know of cases right now, don’t we?–where employers or people in power take advantage of their employer situation to extract sexual favors from their subordinates. And we have made, as a society, the decision that’s illegal.
And the answer it’s my business, I can do what I want, and if an employee doesn’t want to do what I want, they can jolly well leave, this answer of the business community has been laughed out of the courtroom. They can’t do it.
Now, I would argue as an economist that the damage done to our society from child labor and from sexually unwanted demands from employers are no better or worse than the damage done by having companies leave the United States, leaving behind decimated communities. This is an unacceptable social cost of capitalists’ freedom. And in those situations, you curtail the freedom of the capitalists for the greater freedom of the larger community not to be stuck with the costs of a capitalism that works this way. I think we’re better off for having stopped child labor. I think we’re better off for having made it illegal for an employer to impose sexual demands on subordinates. And I think we’ll be much better off if we stop permitting capitalists to get up and leave to make more money, leaving the waste and the destruction behind.
And I would add one more little historical piece of information. The country in the world that has perhaps gone the furthest in imposing limits and conditions and prohibitions on private capitalists leaving their country is the country called Germany. And in the last six years of this crisis, Germany has done better than every other capitalist country, certainly way better than the United States. So the notion that you can’t constrict your capitalists and make it difficult or impossible for them to leave, which the Germans do, that this will somehow harm your capitalist system, Germany is an example that the opposite is more likely the case.
DESVARIEUX: Alright. Rick Wolff, always a pleasure having you on. Thank you so much for joining us.
WOLFF: Thank you as well.
DESVARIEUX: And thank you for joining us on The Real News Network.
Pretty stunning that Wolff found it “stunning” that out-sourcing first world jobs to poor countries would result in wage gains in the poor countries but not in the rich ones. I think the word “obvious” would have been more appropriate but maybe that’s just me.
I see Wolff has a series of videos about Globalization on YouTube which I will have to digest over the coming week.
Being an old school Marxist, it is good to see Wolff hitting this theme. Since I am a true believer in the thesis-antithesis-synthesis process, I would hope he would now rethink his views on Nationalism and the ability of a rich nation’s border to act as a shield against global capital pauperising the working classes.
It could be something as simple as this:
Thesis: Workers of the world unite and defeat capitalism.
Antithesis: Workers of the world compete and enrich capitalists.
Synthesis: Workers of the nation unite and use national borders to control the free movement of capital, labor, and products.
It seems like he is ever so gently edging towards this type of conclusion as his comments on Germany show. But it is good to have someone with Marxist sensibilities theorize about the possibilities (and dangers of course) of nationalism since they will be more careful about it.
In the end it’s all about a balance of power between labor and capital which has now swung way too far in the favor of global capital.
You had the same reaction I did Working Class Nero.
I rarely comment on NC because, frankly, so many regulars here, have a better grasp of the way through the weeds on matters of economic policy.
Stunned or not, I think Wolf did an excellent job of reducing our situation to its most basic question, which usually goes begging. Simply put, do capitalists have any obligations to the nation they call home?
I too, think that nationalism has a pretty lousy record as a means of providing global order but it appears to me, that its 21st century form, as a fetish to something that no longer exists, is in subtle ways more pernicious.
Since day one, whenever the paeans to free trade and neo liberal economics come from the chorus, all I have ever heard is an off key chant of shills; labor arbitrage, labor arbitrage, labor arbitrage .
Some one needs to explain to me why outlawing child labor inside our borders matters, if goods produced by children elsewhere is considered good and acceptable business practice?
The nation state is a vestige, a security blanket for those who prefer to pretend that the corporate elites and financiers view citizens, as anything other than consumers and expendable commodities.
The nation-state may be a dying vestige but it is all working people have and they will be its last defenders.
People who talk as though the State is out of date or sometimes even downright evil seem to forget that the State is where the democracy is. The smaller the State gets, the less democracy we have.
That’s also a flaw in his approach, though. He appears to assume that national borders are meaningful to this story, as if the main issue isn’t division within the country?
Very Good – Thanks to what was then called the vested interest it took roughly 120 years for parliament to abolish child labour in the UK. The Germans held onto their manufacturing sector which is largely based on quality of engineering & design & the German worker for the most part did not climb onto the hamster wheel of property ownership.
In the case of the UK in particular – we have thrown away the first – due to lack of investment in quality & design & other factors – our industry for the most part was not the second & workers have an average of about 150% of disposable income as debt, as opposed to Germany’s at about 80% & Italy’s at roughly 70 %.
I wonder how Germany & especially Italy would be looking now if they had suffered a housing bubble crisis.
RE: Workers wages.. etc
Anybody who deceives themselves by believing all the Republican gibberish about “job providers” or unions should pay close attention to the exceptionally candid Professor Wolff, and demand that the “pimp-daddy” plutocrats (in more ways than one) and their politician butt-kissers change the conversation immediately!
Hugging your 30-30 or 9mm is very small comfort, (though the temptation may be understandably very strong!); We need jobs all you effing T*rds! Get it done!
Same answer I have to almost every economic question in the US: legally mandated, centralized bargaining.
All our muckrakers and whistle blowers and progressive policy makers are just moving air molecules with their complaints as long as they — along with the rest of the 99% — have no political muscle with which to take any reforming action. As long as there are — as the professor notes — almost no unions.
With full unionization we have equal political campaign financing and equal pay-attention-to-every-detail lobbying — to go with our 99% of the votes. The same pols who ignore us now will be knocking on our doors asking what they can do for us. Then it will be time to get down to our specific complaints.
Legally mandated is the only way to go — not just because it is so much easier — but because it is the only practical way to institute CENTRALIZED BARGAINING wherein all employees doing similar work negotiate one common contract with all employers in similar businesses. THIS WAY THE BARGAINING IS ULTIMATELY WITH THE CUSTOMER, not the employer — squeezing the market for all it will bear.
We have leftists and rightists; we have Austrians and Marxists. Why don’t we have any “centralized bargainingists”? It is the one and only 75 year old, beginning with the Teamsters Union in 1930s Detroit — around the world, instituted in continental Europe post WWII — spreading to French-Canada, Argentina, even Indonesia — proven way to end the race-to-the-bottom.
As I always say, supermarket and airline workers would here would kill for centralized bargaining. When are we going to start marketing the only truly free labor market system, folks?
Not soon. In most of the places that have centralized bargaining of one sort or another (most of which are voluntary, not legally-required, schemes), it was put in place a long time ago and has weakened considerably over the past 40 years. Speaking of which, the “circuit breakers” in place in Germany that make it costly for employers to relocate production out of Germany were also negotiated a long time age.
The question is: Why not soon? I think the biggest problem may be guys like you: human males. I figure you for a male because you think in the third person: synced to first and foremost to what everybody else is thinking which heavily seems to you (plural) to define the limit of the possible — instinctive pack hunters. The third person thinking aspect is compounded by the human male reluctance to discuss some form of activity if there is not the prospect of actually doing it — without a “reason.”
Human females OTH feel perfectly free to think of issues in terms of merits only — would it be a good idea ipso facto?. Instinctive gatherers. Compounded by their willingness to communicate about anything just for the sake of communicating. Progressive girls rock your boys — please! :-)
In Australia we used to have such a system. This article gives a rough idea what it was like and what happened to it (NB – .pdf):
Before I read it (tomorrow — always want to broaden my understanding of labor market possibliities) I read a few years back that Australian labor union density dropped from 40% to 20% over the previous 25 years (not sure of the numbers). Something like the following understanding of the labor market — my comment in a discussion of raising the Illinois minimum wage — has to become a central part of our culture:
“Assuming supply and demand in equilibrium is a mistake if labor has no way to test the market — for what the customer will bear (just like ownership does and should). It wasn’t equilibrium at [min wage of] $5.15 ($5.90 adjusted). It will be equilibrium at whatever price labor, ownership and the consumer all (three) agree on the product’s price (including profit and wages).”
“DESVARIEUX: Rick, but I can just hear people, like, on the business side saying, but I own this company; how can you tell me what to do with something that I own?”
Well, mr. businessman, tax law. You can offshore but you will lose tax subsidies, lose full deductions for moving expenses, lose the tax deferment on unrepatriated income, for example. We won’t tell you what you can do with your business, mr. businessman, we will change tax law. If you want US taxpayer dollar subsidies you will have to abide by certain conditions, such as you will have to be a US company, not an inverted ‘foreign’ company.
(yes, easier said than done.)
And, mr. businessman, you may take most of your company’s profits to pay yourself handsomely with salary, bonus, and stock. But your pay packet in its entirety will be taxed at full income tax rates. Whereas, we will give you healthy tax deductions and credits if most of your company’s profits are reinvested in the company’s US expansion of physical plant, capital equipment, hiring workers, etc.
Take away the imperial status of our global reserve currency, we wouldn’t be able to print as much, buy all the junk imports or ship all the factories overseas, without crashing the dollar and bringing back all the jobs.
The focus on wages and unionization is conveniently narrow. It ignores many facets of the move of industries from the developed world to the third world. For example: Moving a factory from the US to China not only gets a cheaper labor force, it relieves the factory owner of reams of regulatory red tape and the threat of litigation over numerous subjects, including allegations of discrimination in hiring and promotion. The red tape burden in the US is enormous. The burden of taxation is often far lower in 3rd-world countries, as is the cost of accounting and tax compliance. 3rd-world countries often have no equivalents of the EPA and OSHA.
The focus on child labor is disingenuous, and seeks to impose 1st-world sensibilities on 3rd-world realities. In countries with no social safety net for impoverished families, children who do not work may well starve. Child labor in such places as Bangladesh is decried by commentators in the 1st world, but efforts to eliminate child labor in Bangladesh have resulted in children being pushed out of wage-earning jobs and into the sex trade – a true disaster.
International trade agreements (“ITAs”) such as NAFTA, GATT, and WTO have liberated transnational businesses from 1st-world wages and regulatory regimes while maintaining their access to 1st-world markets. Under ITAs, member nations cannot enact laws that limit market access, even against products seen as harmful, without being forced to pay damages to exporting companies. The ITAs represent a loss of national sovereignty to transnational corporations. Those same transnational corporations are able to site their profits in tax havens, then use the laundered profits to invest in the 1st-world capital markets of New York and London.
To narrow the focus of the 1st-world vs 3rd world industrial disparities to wages and unionization is simplistic.
While understandable, it’s unfortunate this meme is still pretty strongly entrenched.
First, the issue in the industrialized world is not growth. The issue is the disconnect between productivity and wages. It would be fine, for example, for wages to be stagnant if prices were falling.
Second, offshoring has already happened. Less than 10% of the American workforce is employed in manufacturing. Foreign labor is a non-issue. It’s the service sector, not the manufacturing sector, that drives US wages, from prosecutors to preschool teachers.
Third, and most importantly, US wages are not too low in aggregate. They’re too low at the bottom and in the middle. Because that’s the only way for the math to work for the top households to have so much more power than everyone else. You have to have lots of those workers to balance the outsized privileges of the top 20%, especially the top 10%, and the top 5%, and the top 1%…
We either divvy up resources roughly equally, or we don’t. If we don’t, some people have to get the short end of the stick. That has nothing to do with factories on the other side of the world. It’s just basic math.
Replying mainly to your old comment here . Thought would be more visible here.
I would describe temp work as when the employee knows they need to be looking for another job. OK.
But the common principle in MMT is that JG is not designed for long-term mass employment. It’s supposed to transfer workers to the private sector. That’s temp work.
That is wrong. That is not what the JG is. The basic MMT JG is designed for long-term mass employment, say of something like 10 million people, varying countercyclically of course. It is not slavery, any more than any job is, so these people will change, but that is a guess of the size of the program within a factor of two, say. Of course it depends on the wage paid, etc. To add to Ben’s answer to bdy’s “Why can’t JG provide a permanent job?” – the JG must provide a permanent job if the worker wants. Otherwise the name of the program is a lie. If Bill Gates wants to, he could be a JG worker as long as he likes. It is his right. So the JG does not fit your first, good description of temp work. Bill’s job is safe.
To suggest that even a small portion of those who would benefit from a JG would have a job as long as they want it is to say that the government will expand public sector staffing on a massive scale. No. It. Isn’t. This is a non sequitur. It can go both ways. As I suggested above, the real problem with bad economics = bad accounting is that it engraves bad logic on minds, rather than particular beliefs, Beliefs and statements, even ones that MMTers usually criticize, can usually can be given a reasonable interpretation. But the logical connections and the “correspondence to reality”, the syntax and semantics are often greatly off. If you think your statement about the size of a JG program that treats people decently is correct – slowly explain the logic of it to me, no matter how stupid or obvious each step is. MMT academics like Scott Fulwiller or Minsky have models that give much lower estimates of the JG program size than the range you suggest.
Quite the opposite, I’m taking seriously what it would mean to offer an actually decent term of employment. I agree you are taking things seriously, and am glad you do. But you are missing at least two major things. First, that the US and other economies can easily support much higher wages for the unemployed and ill-paid; the USA used to when it was poorer, less productive – why on earth can’t a richer USA do it now? No reason at all. Second, you are missing the “multiplier” effects of the JG. Much/most of the employment increase caused by the JG will not be in the JG, but due to the spending of the JG workers & many other beneficial effects of stable employment. That’s what happened with the New Deal, for instance.
The issue is the disconnect between productivity and wages. Right! But the feasible JG wage, the private sector wages that it will push up and support – without inflation, without having to employ 100 million – depends on current productivity, not current wages. There is a great deal of room to raise wages now! To argue that there isn’t, to say that we can’t easily afford “good working conditions, meaningful work, and decent pay” is to argue both ways. Artificial capitalist control of labor prices, malign capitalist intervention into the economy has pent up a lot of deflation of prices in terms of labor-hours :-)
A lot of capitalists talk as though capitalism is made of glass – tap it and it will break. The history of capitalism on the contrary shows us that it’s a tough old bird, able to survive a lot of elbowing and shoving and belts over the head.
Very nice. I like.
The National Labor Relations Board, NLRB, is supposed to adjudicate conflicts between business and labor. A recent example of this copy of Germany’s similar worker/management council type of decision making bodies that goes back to Nazi Germany, would be the Boeing Dream Liner jet production plant that was moved from the Seattle area to S. Carolina, deliberately to run away from the mechanics union power in the Pacific Northwest. If you recall the decision, Boeing was told it was illegally moving as a form of retaliation against the union, which is illegal. The runaway factories can and have been stopped by the NLRB when they were stacked with a majority of Democratic appointees. JFK had this exact same problem when he put a majority of his appointees in place. The furor by business interest, especially from their stalwarts in the republican party created a political push back that we live with to this day.
Here is a history of what started with JFK and wound up in the Supreme Court to decide what corporate America claimed as ” A RIGHT TO MANAGE”. Collective bargaining included more than raises, benefits and pensions, it included work conditions and input into critical corporate decisions that would directly determine employment of the unionize workforce. This was beat back over and over again in past decades where we are at the point where all unions are seen as is greedy brokers for more money, as if that would solve the problems of your job being lost altogether by outsourcing or relocation. The Supreme Court decided against the Unions in a narrow decision, but supporting opinions expanded the idea of “RIGHT TO MANAGE” which provided the legal precedent of arguing for diminished union bargaining power in the face of corporations right to control the core directions of the enterprise based on their capital investments status as being superior to the working for pay and claiming rights to determine the decisions of capital investments based on that employee relationship. Labor, although necessary, was unequal in standing on decision making power over the direction of business, compared to capital and its agency, management.
From William Domhoff site and his paper on the Rise and Fall of US Labor:
“National Labor Relations Board rulings in 1963 and 1964 that took the conflict to a new level, which represented a distinctly greater threat to the corporate community. Although the issues were barely worthy of media attention in the context of the rising civil rights movement, they provided new openings for organized labor to take part in management decisions, including such volatile issues as the removal of some in-plant functions to other companies (“outsourcing”), the closure of whole factories, and the movement of factories to new locations. In the eyes of all members of the corporate community, the labor board’s decisions on these issues were a challenge to their “right to manage,” a phrase that had been invoked since the 1940s to indicate that a sacrosanct line had been crossed (Harris 1982).
The first round in this protracted conflict, which the corporate community did not win until 1971, involved a seemingly minor matter, the outsourcing of maintenance work previously carried out by employees in a plant owned by Fibreboard, the 364th largest publicly held company in the country. By farming this work out to a low-wage company, Fibreboard lowered its labor costs and undercut the union at the same time. To make matters more complicated, the Republican majority on the NLRB originally decided the case in favor of the corporations in early 1961, before Kennedy made his appointments to the board. But the local union protested that the company’s decision should have been subject to collective bargaining because it involved changes in the work process and the lay-off of workers, so the AFL-CIO lodged a strong protest. Shortly thereafter, with the two Kennedy appointees on the board, the holdover general counsel to the board decided that the case needed a new hearing. One board member was unable to participate, and another volunteered not to participate so that the case could be reconsidered in a timely fashion, which resulted a 2-1 decision in favor of the union.”
So, the mechanism has been in place since FDR with the NLRB. When unions became legal, the government set this decision to make final decisions to keep volatile wild cat labor actions in check and to keep factories and business humming without hardline stances against labor. Of course, depending on makes what appointees makes all of the difference in the world. And of course, the work around for conservatives who hate unions is to make sure the SUpreme Court is stacked with right wing kooks who will blindly side with the 1% no matter what. The Boeing decision was challenged in court over procedural issues of how a decision was made without the proper appointment and quorum to make decisions. The power is there, it needs to be used, but the work arounds include taking executive actions and barring companies with lousy records for labor rights, from bidding on federal contracts. And the organized opposition is fierce and now, in the coming year, getting any democrat appointtees onto the NLRB if need be are less than zero. Imagine if Boeing lost out to military contracts.
A company like Boeing, that relies upon US military supply contracts, is not likely to move out of the US, since that would likely mean the loss of US government business. Unions can therefore exercise power under US labor laws against Boeing. Similarly, union power often remains for industries and employers that at tied to the US – for example, industries that extract US natural resources, and governments that employ civil servants. Other employers, however, with greater freedom to move their sites of production, have fled to “right to work” states, or have moved their factories to other countries. This helps explain why the percentage of unionized workers in private industry has fallen while the percentage of unionized civil servants has risen. Free trade agreements allow products from other member countries to enter the US for sale. Ford builds pickup trucks in Mexico for sale in the US, for example. Some 96% of the merchandise sold at WalMart is imported, and a “Made in USA” label is becoming rare. Textile and furniture manufacturing industries have largely disappeared from the US. Detroit, a former bastion of unionized factories, has seen those factories disappear, largely to “right-to-work” states if still in the US.
Manufacturing is one of the key wealth-producing activities, and America’s manufacturing sector has shriveled steadily from its world dominant position at the end of WW2. Economists characterized the “Rust Belt” phenomenon of factory closings as a change of the US economy from an industrialized economy to a “service” economy. This is a way of concealing the brutal truth of the downfall of the economy, since a “service economy” produces little in the way of wealth – high-value-added manufacturing jobs are often replaced with low-skilled burger-flipping. From the 1970s on, the apparent increase in living standards of the middle class was not based upon increasing real income, but upon increasing consumer credit. The stagnation in middle class incomes has now become all too apparent, and with maxed out credit and high unemployment, consumption and living standards are falling.