“… perhaps in a few decades … genetic engineering…might enable us to make far-reaching alterations not only to our physiology, immune systems, and life expectancy, but also to our intellectual and emotional capacities.”
— A Brief History of Humankind; Yuval Noah Harrari, 2014
In recent years, I’ve written quite often about the plight of the working class in the United States. It is, by far, the largest social class in the nation, and its populace is living longer than ever before in history. Like every other human group on earth, its workers can look forward to expanded life expectancy, as Yuval Noah Harrari has opined in his recent best-selling snapshot of world history. One big question is: How well will its members live?
Dollar for dollar, the most prosperous time for the average worker was between 1950 and 1970 when we witnessed the growth of the middle class, the filling of college classrooms, and the expansion of our domestic economy.
The “good times” were the result of a vigorous labor movement, which started in the 1930s. During that decade, two pieces of legislation were enacted that strengthened the working class in this country.
In 1932, the Norris-LaGuardia Act limited the federal government’s power to interfere in local labor disputes by ordering striking workers to go back to work. In 1935, Congress passed the National Labor Relations Act (also known as the Wagner Act), which guaranteed the right of workers to organize unions without the approval of management. The result was the unionization of many working-class jobs.
Growth and decline
Initially, unions targeted mine, railroad, and factory workers. By the early 1960s, about 36 percent of all private employees belonged to a labor union. That figure is now 10.7 percent, according to the Bureau of Labor Statistics, and the negotiating power of unions has drastically declined.
The early growth was probably abetted by the post-World War II prosperity that began to surface in 1946 when labor unions worked to get better benefits for their members, including pensions for their twilight years. But, the increasing power of unions brought about more federal legislation.
In 1947, the Taft-Hartley Act banned many tactics that led to union successes during the 1930s and early 1940s when two huge organizations, the American Federation of Labor (AFL) and the Committee for Industrial Organization (CIO), dominated the labor scene and successfully acquired benefits for their members.
There was, however, a glaring absence. During the early periods of the labor movement, public employees were not allowed to unionize. This category included teachers, law enforcement officers, firefighters, and nearly all municipal and federal employees.
Still, “big labor” got even bigger. In 1955, the AFL and CIO merged and grew to a membership of nearly 20 million by 1979. Although this seemed like the beginning of a new era in labor relations and membership, it was really the death knell that would ring for decades before truly being felt, especially for factory workers.
As the growth of labor unions for private employees began to stagnate, “big labor” turned its attention to public employees. By the early 1960s, public labor unions had formed, and about 2 percent of public employees were union members at that time. But, in the 21st century, the most prominent unions are among public sector employees, like government workers, city employees, and public safety workers. In 1975, then-Gov. Jerry Brown signed the Rodda Act into law, allowing one of the largest groups in the nation — California teachers — to organize for the purpose of collective bargaining.
Senator Rodda, a great admirer of Benjamin Franklin, took a bit of the logic used by one of our nation’s founders and applied it to contemporary conditions. Franklin had written that agriculturists (farmers) were the most important laborers of the 18th century and that their efforts should receive greater economic reward. At the same time, the popular wisdom was to pay factory workers a bare subsistence wage. This notion probably developed from the writings of British economist David Ricardo who worried that well-paid factory workers would produce numerous offspring, thus crowding and possibly overwhelming the future labor market.
The ‘Iron Law of Wages’
Whether factory owners had ever read or even heard of Ricardo’s “Iron Law of Wages,” they certainly adhered to its principles. And those same principles seemed to apply to public employees, especially teachers.
Rodda knew that Franklin had been drawn to the new ideas of the “Age of Enlightenment,” and that the goal of today’s society is the dissemination of knowledge. Therefore, Rodda put the teachers of our era in a position equal to the farmer of Franklin’s time.
But, Franklin lived in a much simpler society. For example, most people died when they were young by today’s standards. When modern agreements between management and labor were first finalized, the life expectancy of people (the number of years that the average person was expected to live, based on the actual life spans for individuals included in specific age groups) was relatively low. A male baby born in 1900 could expect to live 46.3 years. For those born in 1925, it was 57.6; in 1950, 65.6; in 1975, 68.8; and in 2000, 74.0. For the same period, the life expectancy of a female baby exceeded that of males by 2 to 3 years. And, as Harrari has stated, we can expect the children of the future to live even longer.
With increasing life expectancy, some economists worried that pension plans and retirement systems would fall out of balance with the number of people who continued to draw checks. But, pension funds make money the same way that other huge financial organizations do: They invest. For decades, this allowed most retirement systems to keep up with population growth. But, investment is not a solution in times of depression or even recession.
Recession and recovery
Although there were 10 recessions between 1948 and 2016, the one that damaged pension-fund investment the most began in December, 2007, and ended in June, 2009, according to the National Bureau of Economic Research. The “pot of money” that was set aside for future retirees has not expanded at the same rate as the pool of future check recipients.
The question that we now must ask is not how long we will survive our work years, but how well.