Tag Archives: labor unions

A Few Facts and Figures

Tips When Borrowing Money From Not-So-Great Sources Of Credit

    1. The U.S. borrows $2.1 billion everyday to pay its debt, and the average American household is carrying more than 9,000 in credit card debt. Today’s so-called middle-class families, with two-working spouses are in worse shape financially—they save less and owe more— than a single-income and middle-class family of 30 years ago (pg 30).
    1. Real income for the bottom 50 percent of the U.S. populace over the last 25 years has remained relatively flat and the bottom 20 percent has experienced a slight decline. The top one percent experienced a sevenfold increase of income during the same period (pg 31).
    1. As many as 69 percent of American (92 million people) earned less than $50,000 in 2003. The average adjusted income, after expenses and line-item deductions, for this group was $19,512— not very much money left to pay for food, transportation, and clothing (pg 78).

      savings and budget

    1. Tuition at community colleges averaged $2,191 in 2005-06, and they enrolled 46 percent of all undergraduate students attending college. Tuition at private colleges, including room and board, averaged more than 31,000. The community college is becoming the forced-choice among students of moderate-income; nonetheless, their fundraising ability accounts for less than one half of one percent of all private funds donated to colleges. One likely reason is that a class bias exists in the business and philanthropic community helping to perpetuate a two-tier system of higher education (pg 81-82).
    1. U.S. production is peaking. China and India each graduate four to one more scientists and engineers than the United States, indicating where tomorrow’s innovation, and inventions will come from: Even worse, there is now reverse “brain drain” from the West to the East, as foreign science/math students graduate from college and leave the U.S. and follow the lure of economic opportunity back to the East (pg 95-96).
    1. In 1980, the top one percent in the U.S. owned 21 percent of the nation’s wealth. By 2005, they owned 35 percent, equivalent to what the bottom 95 percent owned. In 1980, the same top one percent earned 8.2 percent of the U.S. income; in 2005, they earned 22 percent, equivalent to what the bottom 50 percent (150 million Americans) earned (pg 140).

These facts came from my book Class Counts which you can find here: http://www.allanornsteinbooks.com

Like and comment what you think which is the most interesting (or eye-opening) figure.

When the American Dream is just a Dream

Unemployment Report

A recent article focusing on the odds of employment after graduating in Nevada put a close-up perspective on a nationwide issue. There’s a growing number of graduating students, and all are hoping to achieve some sort of well-paying job that correlates to their major. But what jobs await them? The answer is startlingly bleak.

Underemployment is nothing new in the last couple years. Its something America’s been struggling with since the recession and collapsing of industries (like the housing market). But now, during what can be considered the ‘reconstruction’, there’s a high number of unemployed workers (with education) that either lack experience to get the job they want or are overqualified for entry-level positions elsewhere.

Over the past couple months, there’s been an addition of 280,000 jobs to the US job market, and yet unemployment rose ever so slightly from 5.4 to 5.5. According to HuffingtonPost, the bulk of these jobs are driven by construction and health care: and this could be one of the reasons why college graduates struggle in finding appropriate work in their field. And even though our economy is consumer based, our consumers are acting more cautiously than in the past. This makes jobs, wages, and wage-increases the most viable way to get them spending again.

Education vs Experience

It sounds like a relatively simple plan: graduate, get a job, contribute to capitalism. But what usually ends up happening is students are often forced to work while earning their education in order to help avoid crippling student loan debt. While struggling to get on your feet after and even in college used to be a sort of ‘rite of passage’ to becoming an adult, the period of time to do so is increasing. And the longer it takes to get “comfortable” in the professional/working world, the more difficult it is to do so. Many end up living at home to try to curtail expenses.

In my book, I talk about how

Our economic system is partially based on a culture that thrives on independence and individualism, not on the collective good… It is fueled by the spirit of work hard, and inner-directed behavior. If I work hard, and with a little luck, I’ll get what I need, and I don’t have to be concerned nor worry about the person who cannot or will not work as hard… it corresponds with the notion of Social Darwinism.
Wealth vs. Work (pg 36)

So what are the currently unemployed supposed to do? And what of those just graduating and future graduates that are going to be entering an over-saturated market?

Money Over Matter

The college admissions process can seem confusing, but many of the hoops to jump through are there to make sure candidates meet the standards set at a (usually) high bar. A certain SAT grade, along with a particular GPA correlated with it, are often the only two things keeping students out of college.

Most less-selective colleges have hard admission cutoffs for prospective. For example, the minimum combined reading and math SAT score could be an 830, as long as the student maintained at least a C average GPA. Students can fall to either side of this line, according to the New York Times, and students who did not pass that set bar were rejected from college a majority of the time. To be exact, roughly half of the students who cleared this standard graduated with a bachelor’s degree, as compared to only 17 percent of those who did not meet this standard–regardless of how marginal the difference was.

There have been a few studies of the students that fall to either side of this line over the years. One such study found that young adults who fell above the line and went to college made an average of 22 percent more in their late 20s than those who fell just below the cutoff. This is a statistic that contests ardently to the notion of “go to college to live a successful life.” However, there seems to be an unexplored caveat of this dictum. How many of those students making 22 percent more than those who did not go to college were already wealthy?

According to the Wall Street Journal, “Students from the wealthiest families outscored those from the poorest by just shy of 400 points,” which is just another example of “economic inequality result[ing] in much more than just disparate incomes”

BN-EX013_SAT100_G_20141007150853In my book Wealth vs. Work, I discuss both equality and inequality financially. There are many wealthy students who are given the opportunity to go to college, but either wish to pursue a different career path or are otherwise disinclined towards college.

“When we talk about equal opportunity, eventually the question arises as to whether everyone should have the right to go to college. If everyone has the right to go to a high school education, why not college? …[T]here are many children whose academic limitations cannot be traced to poverty or deprivation. Children who come from upper-class homes have the advantage of social capital, and have parents who can hire private tutors, if necessary. They also have the ability to move to a successful school district- where… the school climate is more conducive to learning.

Others who are less fortunate start out on a less than equal footing and continue to experience family, school, peer group, and community handicaps that only increase their disadvantages- and thus are often doomed to disappointment.”

-Allan Ornstein, Wealth vs. Work: How 1% Victimizes 99%. p. 214

Some say that college dictates success–that social mobility relies on education. Why, then, do those those at the bottom of the totem pole have a society set against them getting a college education? Does excellence matter anymore, or has higher education become a result of money and circumstance, instead?

Robots are the new labor force

When you think of the future, what do you think of?

I think: ROBOTS

That’s right, robots, and machines, that are going to be so technologically advanced that the workforce may not be able to compete with these machines.

Today, machines can process language, recognize faces, read expressions, and even carry out conversations with emotion. The future is not so far ahead.

According to the New York Times, “Machines aren’t used because they perform some tasks that much better than humans, but because, in many cases, they do a ‘good enough’ job while also being cheaper, more predictable and easier to control than quirky, pesky humans. Technology in the workplace is as much about power and control as it is about productivity and efficiency.”

“We no longer need humans to do the heavy lifting, counting, packing, inspecting and moving of items. In addition, robots work around the clock, on Saturday and Sunday, and they don’t get hurt and sue their employers. They may break down and need a new bolt or chip once in a while, but that sure beats a million dollar lawsuit for alleged discrimination or exclusion from meaningful opportunity. As The Economist declared on a recent cover page about robots, they are the “immigrants from the future.” We may not see it at the end of the corner, but technological replacement and unemployment is around the corner. Protectionism will not solve the problem. Outsourcing, global low-labor costs, and technological displacement are converging at the same time and affecting the nature of work.”
-Allan Ornstein, Excellence vs. Equality: Can Society Achieve Both Goals?. Ch. 4, p. 11

Historically, there is no need to fear as long as people stay rational. During the Industrial Revolution, machines replaced manual labor. However, all we needed was a little more education and knowledge. Machines are just machines, after all. What we need is to use the machines and robots to empower and enhance our work, instead of staying idle and letting technology take over. Yes, the robots are coming…but to be afraid of them is pointless.

The U.S. is losing its top spot in the economy, experts say

The United States government is far divided, which could cost the nation its top spot in the economic world. As it slips toward ceding its supremacy, the United States could be handing over its power to other, faster developing nations.

“It’s almost handing over legitimacy to the rising powers,” said Arvind Subramanian, the chief economic adviser to the government of India, in a New York Times article. “People can’t be too public about these things, but I would argue this is the single most important issue of these spring meetings.”


There are several reasons for the United States slipping, but people can be sure that the fall is by no means voluntary. The U.S. is reeking of political infighting, along with financial strains of its own. Internal problems can often overwhelm the government. How does a government hold onto international status if it is having trouble within its own country?

“Experts say that is giving rise to a more chaotic global shift, especially toward China, which even Obama administration officials worry is extending its economic influence in Asia and elsewhere without following the higher standards for environmental protection, worker rights and business transparency that have become the norms among Western institutions,” according to the New York Times.

China has been seen as less stable in recent years, due to a diminishing growth factor, but the nation is still rapidly developing. Experts have debated China’s future, and the superpower’s economy is not headed for an inevitable disaster.

“At what point does the rickety architecture of civilization begin to collapse? What are the limits of American power? Americans are an optimistic people. But make no bones about it – we are in decline, and our standard of living is bound to be reshaped, as other centers of economic growth reconfigure the world order. The 2008 financial meltdown, initially caused by Wall Street greed and irresponsible risk involving some $33 trillion in credit default swaps that few people involved fully understood not only dragged down the U.S. economy, but also the global economy…It was the emerging nations, not only criticizing the U.S. for dragging down global markets but also it was China, Japan, and Saudi Arabia surfacing as the nations with fat wallets and the likeliest candidates to assist distressed countries – all symbols of the shifting landscape of economic power and the future test of the American economy.”

-Allan Ornstein, Wealth vs. Work: How 1% Victimizes 99%, p.18

What do you think of the U.S. economy? Is it in decline, or do you still see glimmers of hope in the seams of the nation?

The Decline of Labor Unions

In 2014, the union membership rate was a mere 11 percent in the U.S. This is down 0.2 percent from 2013, which does not seem like a notable decline. However, this is a 98-year low in America. To get some idea of this immense drop in union membership, the union membership rate was 20 percent in 1983 and 28 percent in 1954, according to Cornell University.

Labor unions are vital to the nation’s success. President Eisenhower himself once even said, “Labor is the United States. The men and women, who with their minds, their hearts and hands, create the wealth that is shared in this country–they are America.”

Policies against unions

However, government and policy have victimized unions for decades. The Taft Hartley Act of 1947 expanded employer rights at the expense of union rights. Some of the clauses prohibited closed shop for unions, secondary boycotts, and federal employee strikes. It was even referred to as the “slave labor” act by its opponents.

In 1978, labor unions put together a bill to strengthen the National Labor Relations Board. Big business significantly outspent labor efforts, ensuring that this bill did not pass.

In 1981, President Reagan dismissed 3,000 striking workers of the traffic controllers union. Businesses and Corporations began to hire strike breakers, effectively posing a viable threat to any union that dared to go on strike. There were 371 strikes in 1970; there were only 11 in 2010.

According to CNN, “For the sake of our economic and political future, however, America would be better off if we had more strikes.”

Labor Unions are essential to democracy and equality

The graph shows the rise of the Gini coefficient, which correlates with the rise in inequality. -Photo By Wushi-En [GFDL (http://www.gnu.org/copyleft/fdl.html), CC-BY-SA-3.0, via Wikimedia Commons]

The graph shows the rise of the Gini coefficient, which correlates with the rise in inequality.
-Photo By Wushi-En [GFDL (http://www.gnu.org/copyleft/fdl.html), CC-BY-SA-3.0, via Wikimedia Commons]

We need labor unions in the U.S. for a variety of reasons. First, the decline in unionization is correlated to the increase in income inequality. According to a study by the International Monetary Fund, about half of the increase in the Gini coefficient–a measure of inequality–and the significant rise in incomes of the top 10 percent can be explained by the decline in unionization. Historically, times of high union membership were also times of low inequality.

Second, unions provide a checks and balances system of sorts to the corporate world. Labor unions increase worker moral, protect basic worker rights, and are essentially the epitome of the middle class. Although there is corruption in some unions, there is also corruption in the corporate world. Even a flawed union can balance out a flawed corporation.

Unchecked corporations consume money and power, as presented in the quote from Wealth vs. Work below.

The fact is, however, people at the top of the pyramid are continuously redistributing wealth from the common people to their own pockets (this is the history of human kind), allying themselves with those who run the political system, writing self-serving rules concerning investments, credit, insurance, and banking. Even when the day of reckoning comes, and markets tank, the people in charge of corporate capitalism and finance manage to recover or get rescued by the system…

[In the 2008/2009 Recession], it was the ordinary worker who paid the bill. Money was redistributed from the bottom of the pyramid to the top…The rest of the world saw a system of government, which was supposed to regulate, monitor and hold people accountable, that allowed the robber barons of the twenty first century complete immunity and placed the rest of the world in jeopardy.”
-Wealth vs. Work: How 1% Victimizes 99%. pp. 138-139. Allan Ornstein

According to the New York Times, the decline in labor unions could help explain why CEOs of large corporations earned, on average, “20 times as much as the typical worker in 1965, and 296 times as much in 2013, according to the Economic Policy Institute.”

In the words of Elaine Bernard of Harvard University in the piece Why Unions Matter, “Because we have not yet succeeded in extending democracy to the workplace, democracy and civil society themselves are threatened.”