Along with the staggering theft in broad daylight of Americans’ assets that has occurred in the course of the ongoing financial crisis, as taxpayers funded multi-trillion bank bailouts and banks stole homes through foreclosures with the help of fraudulent paperwork, American companies have also been picking the pockets of workers more directly.
This second round of paycheck theft has come in the form of stolen productivity gains.
Historically, the relatively high and rising standard of living of American workers–both blue and white-collar–which once gave the US one of the highest standards of living in the world, has come courtesy of rising productivity, which has allowed US companies to produce more goods with less labor, and to then pass some of the enhanced profits on to workers in the form of higher wages, without having to raise prices. That has been important because, when higher wages are financed by higher prices, it tends to be a kind of zero-sum game: higher wages cancelled out by inflation.
But beginning in 2000, the old system already creaky, broke down. (It must be noted that this system was never the result of the capitalists’ largesse, but rather was because of a tighter labor market and, critically, a powerful labor movement.)
The corporate onslaught against trade unions and against the minimum wage, which began with the Nixon administration in 1968, combined with so-called “free-trade” deals that allowed US companies to shift production overseas and then to freely import the products of their overseas production facilities back for sale to Americans at home, by weakening the power of workers to demand higher wages, has led to a situation where companies can just pocket all the profits from productivity gains, leaving wages stagnant, or even driving them down.
The recession that began in late 2007 has only made matters worse, giving owners and managers to opportunity to really hammer employees. With real unemployment and underemployment now running at close to 20%, employees are in no position to press for higher wages, even as those who are still working are putting in extra effort to keep their jobs, thus pushing productivity gains even higher.