Pethokoukis, Economics, U.S. Economy

Maybe patriarchal labor unions are to blame for rising inequality

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Many on the left suffer from economic nostalgia for what they call the Golden Age of the American economy: the 1950s and 1960s. Growth was rapid, inequality low, tax rates high, unions strong. Especially the bit about the unions. But Manhattan Institute scholar Scott Winship offers a different perspective on that era:

For decades earlier in the twentieth century, men actively fought to shelter themselves from female competition—pushing for low minimum wages for women in order to limit the extent to which female workers could pull down the market-clearing wage, demanding that union contracts require women workers to be let go if they got married, promoting the famous five-dollar-day in Ford factories (only for men).

Don’t get me wrong, the erosion of this regime has been a kick in the gut for less-skilled men, and we have done too little to help them adjust. It has been a boon for married women though, whose labor force participation rose steadily for decades from the 1940s (before men’s wages started stagnating) through the 1990s.

The problem is not a general one of the rich appropriating the workers’ pay. Instead, it is possible that top earners and shareholders would have had something like 1929- or 2013-sized incomes during the Golden Age of the American economy—except that they, too, bought into the male breadwinner family-wage regime even at the expense of their own financial self-interest.

In fact, if you start in the mid-1930s at the time of the Wagner Act’s passage that spurred union growth, median compensation and productivity have increased by roughly the same amount—it’s just that an initial period of too-rapid wage growth was followed by a long period of wage adjustment. Labor’s share of income has dropped at the same time, and the share of income going to the top one percent has risen.

In other words, men were overpaid relative to their productivity because as a society we were, as Winship puts it “intent on keeping women in the home.” It is a fascinating thesis that says if we want to return to that Golden Age, it will take more than just an incredible reversal of labor union power, it will take a complete reordering of society — in addition to other 1950s realities such as the wartime destruction of our economic competitors and the de-educating of their population.

Follow James Pethokoukis on Twitter at @JimPethokoukis, and AEIdeas at @AEIdeas.

10 thoughts on “Maybe patriarchal labor unions are to blame for rising inequality

  1. Is Scott Winship clueless or simply shilling for his rightwing sponsors? Assuming the former, he needs to visit a Wal-Mart, study the workers there, 70 percent of whom are women, and ask himself a question. Are these women workers looking for personal growth and fulfillment, or are they doing what they can to keep their families afloat? (This is not a strawman question. Wal mart is the largest employer in the US.)

    Yes, there was sexism after WWII. Bosses sent Rosie the Riveter home even though polls showed as many as 90 percent wanted to keep factory jobs. The percentage of women in the workforce grew rapidly anyway, right through the ’50s and’ 60s, thanks to “women’s work” in education, retail, health, office and government. Those are the same fields dominated today by women. http://www.bls.gov/news.release/empsit.t21.htm
    While growth continues in typically female fields, like healthcare, the opposite is true of typically male jobs. The US has lost 5 million factory jobs since the union heyday, which may have something to do with the decline of unions as well as blue collar workers. We lost 2 million construction jobs since ’07.
    Which brings us to the category of female worker that was showing growth up until the recession: married white women, joining the supermajority of married women of color already in the workforce and the same reason. To survive.

      • There was not a surge in female labor force participation after the union heyday, as Winship’s premise would suggest. The persistence of traditionally male and female occupations argues against his premise as well. One would guess that the Teamsters ran off some women over the years but truck drivers are still predominantly male.

        One possible exception is government employment, which is majority female. But AFSCME doesn’t fit Winship’s premise either. At 1.6 million members, AFSCME ius two, three times bigger today than it was in the ’50s and ’60s.

  2. Female labor force participation (F-LFP) peaked in the late ’90s which seems inconsistent to Winship’s position.

    Since the F-LFP peak there has been an 15 year secular decline in both the NIPA and BLS data taking it to series lows.

  3. Blame may be the wrong word, but obviously when the supply of workers increased, the price of labor went down. Cheap labor is a very bad thing for workers and a good thing for the non-productive class.

    • Also a surge of hardworking illegal labor into the USA for much of that time“…

      Which begs the question, if 12 million illegal aliens will help the US economy then why didn’t they help the Mexican economy before they left?

  4. In the hay day of unions men were in the unions and not. There was a transfer of purchasing power from teachers and nurses (women) to steel and auto workers (men). High auto/steel wages meant high auto/steel prices and women had to pay these prices on low teaching/nursing salaries.

  5. In the heyday of unions men were in the unions and women were not. There was a transfer of purchasing power from teachers and nurses (women) to steel and auto workers (men). High auto/steel wages meant high auto/steel prices and women had to pay these prices on low teaching/nursing salaries.
    (This corrects previous post.)

    • True, but it was Japanese imports and expensive oil that precipitated the decline of the US auto industry and the UAW, and not some cockamamie internal gender struggle. Teachers unionized after 1960 as well, but it’s hard to find anything sexist about that fact either. The rise and fall of unions — and genders — it seems to me, owes more to which jobs can be automated or offshored and which cannot.

      If Winship were right, we’d find lots of women on the assembly line. In fact, even in Sweden, women only hold one in three factory jobs at Volvo.

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