Despite all of the cheerful wishes exchanged Monday night for a happy and prosperous New Year, 1991 might be happy but it certainly isn’t going to be prosperous for most workers if, as most economists predict, the recession stays with us.
Unemployment will continue to grow, and the average worker’s income will buy less and less as prices rise faster than wages.
However, if Congress and President Bush surprise us and make a reality of some feasible wishes for legislation to help out, it could be a better year.
Congress cannot outlaw the recession, but if things get difficult enough, maybe public pressure will force action on laws already under consideration that would ease the economic pressures most of us who work will face.
Congress needs to quickly strengthen our economic safety net by, among other things, relaxing our unnecessarily restrictive limits on jobless benefits so that more than one-third of the jobless who are not now getting them will be able to do so under fair eligibility rules.
Benefits should also be increased and paid longer than 13 weeks, the current limit for most workers.
We need a substantial increase in low-cost public housing programs to meet urgent housing needs and provide jobs. More jobs could be created if Congress presses the development of alternative energy sources and enacts other anti-recession job programs to rebuild our crumbling infrastructure, such as roads and schools.
Significant help could come from passage of a parental leave--with pay--law. Last year’s inadequate child-care bill should also be improved. Everyone would benefit if there are substantial increases in funds for job training and education.
Labor-management strife could be reduced by prohibiting use of permanent replacements to break legitimate strikes. Employers can use temporary workers if they want to continue operating during a strike, but permanent replacements make a mockery of the legal right workers have to strike without fear of being fired.
Workers would also be helped by a long-delayed reform of the National Labor Relations Act to speed the painfully slow process theoretically available to protect workers from employer abuse. The process is so slow now that it ends up helping employers more than the workers for whose benefit the law was passed in l935.
Women and minorities would be helped by passage of a civil rights bill to overturn recent Supreme Court decisions that undermined their job protection rights. Bush vetoed such a measure Oct. 22 on the spurious grounds that it required employers to hire a fixed number of women and minorities.
And, after talking about it for decades, Congress should finally pass a national health insurance bill to bring the United States into line with the rest of the industrialized world.
Without congressional action on these mildly progressive proposals, the economic troubles of more and more people will grow worse.
Unions, although weak these days, may help limit financial troubles of millions of workers. Unions are generally no longer expected, even by many employers, to accept more of those concessionary contracts so common in the 1980s, when workers were forced to give back many of their wage and benefit gains.
If inflation does slow, several large unions are expected to win wage hikes that will let their members keep up with the cost of living. Some will even exceed it.
But real wages of most workers will continue to erode, although probably at a slower pace than in recent years. Since 1977, when real wages peaked, there has been a 10% drop in real wages of union workers--who were hit hard by contract give-backs, especially in manufacturing. Real wages of non-union workers who were generally not in depressed industries dropped 5.1%
Nevertheless, union workers generally still have a hefty 31% wage advantage over those in non-union jobs, and in manufacturing the union advantage is even greater: 32% for wages alone and 51% in total compensation, according to the Bureau of Labor Statistics.
Lawrence Mischel, chief economist of the Economic Policy Institute, points out that since 1979, nearly 85% of new jobs have been in the lowest-paying industries, such as retail trade and health services. That trend is continuing, and it doesn’t bode well for the average family in 1991.
Pressure for congressional action may be spurred by the fact that the wide gap between those in the upper-income brackets and those in the middle and lower range is expected to increase in 1991, a gap that worries not just liberals but many conservatives as well.
While the purchasing power of low-income families is sinking, and real income of those in middle-income brackets is almost stagnant, those in the top 20% have been doing just fine.
Their real median income has jumped 19.6%, and those in the top 5% soared 25.6%. Fair or not, those in the high-income crowd are likely to retain, or even increase, their advantage.
But wouldn’t it be nice if, realizing their good fortune, they start urging Congress to adopt legislation that would make 1991 a happier and somewhat more prosperous year for the rest of the nation. But don’t hold your breath.