The other side of Reaganomics:

In a previous post, I stated my belief that Reaganomics was an utter failure.  That’s not entirely true.  It was a huge success for the wealthy.  It also successfully eroded the power of organized labor. 

When Reagan fired the striking air traffic controllers who were members of PATCO, I believe he inspired his followers to launch an attack on all labor unions.  Since that time, there has been a steady outsourcing of American manufacturing jobs to places like China, India, Indonesia and Mexico.   This has forced unions to make concessions with regard to wages and benefits.  The recent troubles of GM and Chrysler are good cases in point. 

During the debate over auto industry bail-outs, the discussion seemed to revolve around the wages and benefits of United Auto Workers.  Never mind the decades of questionable decisions by the company executives, along with their inflated salaries.  In the minds of many, the real problem is that UAW workers were paid more than their counterparts at Honda, Toyota, Nissan and other import brands.  The claims were that while the workers for foreign brands were paid approximately $45/hr, UAW workers were paid $70/hr or more.  Outrageous!  Right? 

Well, hold on a moment.  My UAW friends tell me that the figure of $70/hr not only included wages and benefits such as health care.  It also included the cost of benefits for recent retirees, plus all costs associated with workers – overtime costs, Social Security, Medicare, etc.  It even includes the cost of tools used by the workers!  Take away all of those costs and the actual average hourly wage was $29.78. 

But it’s not just lower wages the Reaganites are after.   What they really want to do is to rid corporations of the obligation for health and retirement benefits.  And what better way to accomplish than to crush organized labor? 

It took a couple of wars, the Great Depression and many bloody management/labor clashes for conditions to improve for American workers.  I fear that Reaganomics combined with globalization and the greed of CEOs may be leading us back to labor conditions similar to those under the robber Barons of the early 1900s when work was more like servitude.