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We need to build a new economy that works for all of us

Sep 6, 2016

I am sorry I didn’t go to downtown Detroit yesterday morning for the annual Labor Day parade. Bill Clinton showed up in a casual shirt, and walked for a mile mingling with regular folks as well as politicians.

I didn’t need to see the former president, however; been there; done that.

Now, I wish I had gone to pay tribute to the men and women who struggled, suffered and sometimes died to give us the weekend, not to mention, paid vacations.


This parade was once a very big deal, especially in presidential election years. Democratic presidential candidates traditionally kicked off their fall campaigns in Detroit.

Organized labor is still important politically, but doesn't have quite the power or nearly as many members as unions once did.

Organized labor is still important politically, but doesn’t have quite the power or nearly as many members as unions once did. Union members blame bad trade agreements and policies that, since 1981, have stacked the deck against the working man.

Others see unions as a quaint anachronism totally unable to cope with the economic challenges of the day. Yes, we all know that unions did vastly improve workers’ lives in the 1930s and 1940s. But that was an era of big-box factories before computers, when outsourcing to other countries would have been impossible.

We live in a different world.

That is true. But today’s modern world is one where, to a weary cashier I talked with at Target Sunday, all Labor Day means is time and a half pay. Other workers told me they didn’t have enough seniority to take the day off even if they could afford to.

Back in the day, the rap on unions was that they produced lazy employees who didn’t feel they had to work hard because the union would protect them from being fired.

There may have been a little truth in that. But as a fascinating column in Time Magazine yesterday noted, we are now working harder than ever, with more devices and software, and yet productivity seems to be falling.

What is wrong with this picture?

Perhaps, our basic assumptions.

As Rana Foroohar, Time’s economics columnist, notes:

What we know for sure is that America’s biggest run-up in productivity happened from 1945 to 1973, when there were major public and private investments in education, infrastructure and worker training.

She notes that similar investments could have the effect, as they did then, of raising wages, which would bolster demand and give companies more reason to invest.

The likely result?

... a virtuous cycle of productivity growth, wage growth and economic growth.

Anyone who’s had a college course in economics knows about the multiplier effect, which magnifies the effect of dollars that land in the hands of those who need to spend them.

We now know that just giving tax breaks to companies and expecting them to create jobs ... doesn't really work.

We now know that just giving tax breaks to companies and expecting them to create jobs, as Governor Snyder did, doesn’t really work.

Too often, they merely hoard cash, buy things unrelated to their core businesses, or just use the money to pay big dividends to their major investors or themselves.

We need, to repurpose a cliché, to create a real rising tide that will lift all boats if we want to get prosperous again. We need to build a new economy that works for all of us.

That’s what we need to start working to create by next Labor Day.

Jack Lessenberry is Michigan Radio's political analyst. Views expressed in his essays are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.