Union Decline Accounts for Much of Rise in Wage Inequality, Study Finds

The significant decline in union membership since the early 1970s explains approximately 20% of the rising hourly wage inequality among women and about one-third among men, according to a new study in the American Sociological Review.
"Our study underscores the role of unions as an equalizing force in the labor market," co-author Bruce Western, a professor of sociology at Harvard University, told Science Daily. "Most researchers studying wage inequality have focused on the effects of educational stratification - pay differences based on level of education - and have generally under-emphasized the impact of unions."

Looking primarily at full-time, private-sector workers, the study found that the decline in a unionized labor force explains about 33% percent of the rise in wage inequality among men. Among women, de-unionization explains about 20%.

"For generations, unions were the core institution advocating for more equitable wage distribution," said co-author Jake Rosenfeld, a professor of sociology at the University of Washington. "Today, when unions - at least in the private sector - have largely disappeared, that means that this voice for equity has faded dramatically. People now have very different ideas about what's acceptable in terms of pay distribution."

The Great Recession Standoff: Big Business vs. the U.S. Consumer

Read enough news and commentary about jobs and the Great Recession and you come to think of this dire stretch in U.S. economic history instead as the Great Standoff between the American consumer and Big Business.

Big Business, which is sitting atop record-breaking profits, won't spend – e.g., hire any of the 25 million unemployed and underemployed Americans – until demand for its products and services improves.

And the American consumer – battered by joblessness, underemployment, underwater mortgages and steep consumer debt – simply no longer has the financial wherewithal to create the demand big business is holding out for.

It's been this way for roughly three years, and neither side is blinking.

Although it's not yet exactly the hue-and-cry it should be, more experts seem to be stepping forward to argue that it's now is the time for business to step up and take some responsibility for getting America back to work.

"I am coming more and more to think that with the government essentially paralyzed for the foreseeable future, the only way we’re going to get jobs is by turning to actual job creators: business itself," op-ed columnist Joe Nocera wrote in today's New York Times. "With all their cash, companies shouldn’t be waiting for Congress to give them tax incentives to hire people. They should be trying to jump-start the economy — and fend off another recession — by making investments, and hiring workers, that will lead to renewed prosperity."

Michael Useem, professor of management and the director of the Center for Leadership and Change Management at the Wharton School of the University of Pennsylvania, recently proposed an even more specific plan The Washington Post.

Useem called upon leading business organizations such as the Council of Institutional Investors, the National Association of Corporate Directors, the Business Roundtable and the U.S. Chamber of Commerce to "rewrite the rules ... of widely accepted views of investor capitalism" and place "long-term collective growth and employment security back in their mission statements.

"Working together, an inner circle of leading executives, directors and owners could help rewrite the rules most tangibly through direct actions," Useem continued. "Two come quickly to mind: 1) Creation of 1 million new U.S. jobs within the next year by the companies they lead or in which they invest. 2) Creation of a research and development fund for innovative ways to expand employment among companies they represent or own.

"Given the billions in cash that many companies have accumulated at home and abroad, the wherewithal for both is already in the bank."

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It's not a recession that consumers can end

"Even corporate leaders have to realize at some point that their companies will not remain profitable if the people no longer are able to buy anything. A rising tide may lift all boats, but the rising ocean swells from the bottom, not from the top."

- New York Times reader in a story about the plunge in public opinion of Congressional members following the recently concluded debt limit debate 

Top 299 CEOs' salaries could support 103,325 workers

This from Bloomberg.com, via The Week:

"Chief executive officers at 299 U.S. companies earned a combined total of $3.4 billion in 2010, a 23% increase from the year before. That amount would support 102,325 workers earning a median wage."

Nevada's and Las Vegas' Jobless Rates Fall - For the Wrong Reasons

Nevada’s unemployment rate dropped significantly in January, but not because of improving economic fortunes, but because discouraged workers have stopped looking for work or have left the state, the Nevada Department of Employment, Training and Rehabilitation announced earlier this morning.

“Unfortunately, the decrease was not driven by significant improvement in the labor market” said Bill Anderson, the DETR's chief economist. “It appears likely that some jobless Nevadans are becoming discouraged and giving up their search for work and dropping out of the labor force. In addition, given stagnant population levels, it is also likely that some Nevadans are leaving the state.”

Nevada’s jobless rate fell from a revised 14.9% in December to 14.2% in January.The unemployment rate in the Las Vegas area fell from 15.1% in December to 13.7% in January.

However, roughly 10,700 workers dropped out of the labor force in January, which was nearly the same decrease in the number of unemployed. Household employment remained virtually unchanged, the department reported.

The sobering announcement came after improving Nevada economic news in recent months. For instance, key indicators of the state’s economic well being, such as visitor statistics, gaming win and taxable sales, have exceeded expectations. A number of workforce indicators have stabilized, too, including the unemployment rate, although it's still inflated. “Not all is positive though,” Anderson said in the statement. “The recent surge in gas prices will undoubtedly affect travel to Nevada and continued pressure on government payrolls will likely offset any near term improvement in private sector hiring. It appears Nevada will continue to move sideways, bouncing along the trough of this recession for the foreseeable future.”