Lawrence Mishel, president of the Economic Policy Institute, spoke in Geddes Hall on Wednesday night. Mishel’s lecture, entitled “Beyond Technology and Globalization: The Reset of the Rules of the Labor Market,” addressed income inequality in the United States and was part of the Chuck Craypo memorial series, “Combining Research and Activism for Social Justice.”
According to current director of the Higgins Labor Program at the Center for Social Concerns Daniel Graff, the late Chuck Craypo was an economics professor at Notre Dame, as well as the founder and first director of the Higgins program in 1993.
“Chuck Craypo devoted his career of research, teaching and activism to improving the lives of working people,” Graff said. “And to honor his legacy, in 2013-14 the Higgins program initiated a biannual series to bring researchers and activists to Notre Dame’s campus to deliver lectures, lead workshops and foster conversations around compelling themes related to questions of work and social justice.”
Mishel began his lecture by defining economics as “about who gets what and why,”and noting that income inequality has ballooned since the 1970s.
He said that until this past year, Democrats have focused too intently on technology and globalization, considering both uncontrollable and subsequently viewing income inequality as “God-given,” rather than an addressable issue.
Mishel also took issue that Republicans have chosen to focus on economic opportunity rather than income inequality. Mishel acknowledged that the United States does have an opportunity problem, however he stated that prioritizing it over income inequality is illogical, as economic opportunity can’t be improved until income inequality is improved thereby allowing for standards of living and educational opportunity to improve and lead to better economic opportunity.
“So what else caused the wage problems if it wasn’t technology and it’s not just globalization?” Mishel said. “It’s the rules of the labor market have been reset over the last 40 years.”
Mishel outlined several factors that have contributed to these rules changing.
The first factor is unemployment, which, according to Mishel, has been rising over the past 30 years.
“Unemployment weakens the bargain power of all workers,” he said. “If [employers] can get whoever they want for whatever they feel like paying, wages are gonna go nowhere.”
The second factor is unions, Mishel said.
“We have eroded collective bargaining a tremendous amount since the early 1970s,” Mishel said. “It used to be that if you had … an industry and 30-50 percent of the workers in that industry were union, they negotiated collective bargain agreements that the non-union employers accepted … because they didn’t want their workers unionizing or they didn’t want their workers to leave and go to the union sector. So unions were always able to take wages out of competition.”
The third factor Mishel listed was minimum wage, which he said is more than 25 percent below what is was in 1968 [factoring in inflation] even though productivity has more than doubled and low-wage workers are, on average, more educated than 50 years ago.
“If you increase the minimum wage to $12 … by 2020, that may sound relatively modest,” Mishel said. “But it’s actually a reasonably bold policy. $12 minimum wage would affect 25 percent of the work force. So we’re not just talking about a few people lying at the bottom.”
The fourth factor is undocumented workers. According to Mishel, the United States is currently home to eight million undocumented workers, who make up “around 5 percent of the workforce.”
“If you have 5 percent of your workforce who are exploitable and exploited, they undercut the labor standards,” Mishel said. “So it would be to our general benefit to make them not exploitable.”
“What are you supposed to draw from this?” Mishel asked the audience. “The first thing you should know is that what this means is that if workers have not been getting ahead in terms of their pay, it’s not because we haven’t produced a lot of income and wealth. We have produced a lot of income and wealth. It just hasn’t gone to the vast majority.”
