The Discussion Democrats Need to Have About Wage Stagnation

When the June jobs report was released, I wrote that Democrats need to shift from a focus on jobs and start talking about wages. Yesterday Jared Bernstein documented what’s happening in an article titled, “Why Real Wages Aren’t Rising.”

The United States labor market is closing in on full employment in an economic expansion that just began its 10th year, and yet the real hourly wage for the working class has been essentially flat for two years running. Why is that?

Bernstein notes that traditionally, when we have closed in on full employment, it has created pressure on employers to raise wages. That isn’t happening.

But stagnant wages for factory workers and non-managers in the service sector — together they represent 82 percent of the labor force — is mainly the outcome of a long power struggle that workers are losing. Even at a time of low unemployment, their bargaining power is feeble, the weakest I’ve seen in decades. Hostile institutions — the Trump administration, the courts, the corporate sector — are limiting their avenues for demanding higher pay.

Here are some examples he cites of how those hostile institutions are limiting the power of workers:

  • the recent Supreme Court case that threatens the survival of the one unionized segment of labor — public workers — that still has some real clout
  • the increased concentration of companies and their unchecked ability to collude against workers, through anti-poaching and mandatory arbitration agreements that preclude worker-based class actions
  • a federal government that refuses to consider improved labor standards like higher minimum wages and updated overtime rules

That is an economic analysis of some of the things that are contributing to wage stagnation and widening income inequality. It is important to note that Democrats included items in their “Better Deal” that address all three of those issues, and even more. But it’s much easier to shake your fists at trade deals and make them the villain in the story. It’s a lot more complicated to talk about the need for Supreme Court justices who value labor rights or the intricacies of anti-trust legislation or the ways in which the law that enshrines labor rights (FLSA, which was passed in 1938) is in serious need of updating.

That is precisely why Barack Obama wrote this way back in 2005:

The bottom line is that our job is harder than the conservatives’ job.  After all, it’s easy to articulate a belligerent foreign policy based solely on unilateral military action, a policy that sounds tough and acts dumb; it’s harder to craft a foreign policy that’s tough and smart.  It’s easy to dismantle government safety nets; it’s harder to transform those safety nets so that they work for people and can be paid for.  It’s easy to embrace a theological absolutism; it’s harder to find the right balance between the legitimate role of faith in our lives and the demands of our civic religion.  But that’s our job.  And I firmly believe that whenever we exaggerate or demonize, or oversimplify or overstate our case, we lose.  Whenever we dumb down the political debate, we lose.  A polarized electorate that is turned off of politics, and easily dismisses both parties because of the nasty, dishonest tone of the debate, works perfectly well for those who seek to chip away at the very idea of government because, in the end, a cynical electorate is a selfish electorate…

Our goal should be to stick to our guns on those core values that make this country great, show a spirit of flexibility and sustained attention that can achieve those goals, and try to create the sort of serious, adult, consensus around our problems that can admit Democrats, Republicans and Independents of good will.  This is more than just a matter of “framing,” although clarity of language, thought, and heart are required.  It’s a matter of actually having faith in the American people’s ability to hear a real and authentic debate about the issues that matter.

More than anything else, the election of Donald Trump has shaken the faith I used to have in “the American people’s ability to hear a real and authentic debate about the issues that matter.” Frankly, I’m not so sure anymore. What I am sure about is that anyone who gets their news from the vast right wing media echo chamber is not going to be able to participate in an authentic debate because they will have been fed nothing but lies and conspiracy theories.

So where does that leave us on the issue of wage stagnation that is affecting so many Americans? First and foremost it means that Democrats have to start talking about the problem…all the time. They need to regularly ask voters, “when was the last time you got a raise?” They also need to point out that the big idea Republicans had about raising wages—tax cuts—didn’t work. End. Of. Story. It’s time to try something else. Raising the minimum wage is a great place to start because its a basic idea that gets significant support from voters in both parties.

From there, the Democrats should have a wide-ranging discussion about the plethora of ideas on this topic. The point is to demonstrate to voters that the party is committed to implementing policies that will end wage stagnation for American workers. That means debating the merits of various ideas and not accusing those who disagree with you of being a “corporate sell-out” or an “extremist.” If Democrats could demonstrate that they have the ability to have “a real and authentic debate” about an issue like this, it would not only set a positive example, it could go a long way towards convincing those watching from outside that the Democrats are, indeed, the party that is committed to helping American workers.

Nancy LeTourneau

Nancy LeTourneau is a contributing writer for the Washington Monthly. Follow her on Twitter @Smartypants60 .