"Don't Blame Robots For Declining Wages -- Blame Dissolving Unions"

Don't Blame Robots For Declining Wages -- Blame Dissolving Unions

Tali Kristal at Talking Points Memo

http://talkingpointsmemo.com/cafe/dont-blame-robots-for-declining-wages-blame-dissolving-unions

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Some scholars argue that one explanation for this gap is technological changes, including the widespread introduction of computers into the workplace, which over the past few decades left workers less productive than machines and other equipment. This in turn, the argument goes, encouraged firms to reduce their hiring and curb wages and benefits for their employees. Other analysts disagree with this blame-the-robots angle and stress the role of political forces – especially the weakening of labor unions, which has left workers with less power to fight for their own interests.

Until now, there has been no statistical analysis that directly compares these two opposing approaches to explain workers’ falling economic fortunes. I designed my research to address this debate head on. Using decades-long data, I found that broad economic trends masked big differences in various industrial sectors.

The largest declines in the share of income going to workers happened in industries like manufacturing and transportation where unions were once powerful. In other industries like finance, trade and private services, where there was never much of a union presence, the share of economic gains going to workers either remained steady or slightly increased.

In other words, I found a large decline in labor’s compensation and a hefty increase in corporate profits only in sectors that once had high rates of union membership. This suggests that a decline in union membership – which led to disempowerment of workers when bargaining with employers – was the main factor allowing the executives and owners in those sectors to grab the lion’s share of the fruits of economic growth.


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