from the Working Life blog:
Cognitive Dissonance and Unionsby Jonathan Tasini
Wednesday 19 of August, 2009
Yesterday, I participated in a debate on CNBC about whether unions helped the "middle class". The most comical and childish comment came from the fellow from the Cato Institute who called unions a “leukemia” on American society. I thought of this poor fellow this morning when I read this in The Wall Street Journal:
Major retailers reported that American consumers are continuing to hunker down, casting a cloud over the durability of the U.S. recovery and underscoring the importance of overseas demand in restoring the world economy to health.
Retailers across the spectrum provided foreboding reports. Discounter Target Corp. reported that sales at stores open at least a year were down 6.2% from a year earlier in the quarter ended Aug. 1, while luxury purveyor Saks Inc. reported a 15.5% drop in same-store sales over the past quarter as shoppers stuck to buying basics. Building-supply chain Home Depot Inc. saw total sales drop 9.1% in the quarter ending Aug. 2, and it reaffirmed expectations of a 9% sales drop this year.
Now, you don't have to be an economist to understand why this is happening: no more credit and flat wages add up to no money to spend. And this is precisely the argument I've been making for months--the "recovery" is not coming if we measure "recovery" by people being able to have decent-paying jobs, not simply whether the stock market is going up (I saw at least one semi-conscious market watcher who believed that the recent rise in the stock markets was simply a result of speculation and a bear-market rally that is unsustainable). And, it is simply an economic fact that unions push up wages.
The "leukemia" in society is the continued reliance on a bankrupt philosophy called the "free market", which has utterly failed to bring broadly-shared prosperity to the people.
Here's the segment:
http://www.workinglife.org/blogs/view_post.php?content_id=14454
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