America Has a Jobs Crisis

Millions of America's workers—in big cities and small towns, exurbs and country lanes—are worried about their jobs and their health care, concerned about education and retirement and struggling with personal debt. While current headlines and statements from Bush administration officials describe a sound economy, working people have a distinctly different economic experience.

Our Economy Does Not Work for Working People

America's workers are the most productive in the world. We work longer hours than workers in any other developed country, and we live in a country with more than $13 trillion a year in income. Yet we face stagnant wages and family incomes, increasing income insecurity, eroding health care benefits and disappearing pensions.

What Happened?

Our economy did not always work the way it does now. When the middle class was built in the years after World War II, the economy generally worked for all of us. During this period, real family incomes doubled — the most rapid improvement in living standards in history. Incomes for the poorest families increased even faster than those of the richest families, so incomes became more equally distributed. This was a period of great social movements and struggles for justice — women's rights, civil rights and rights for people with disabilities, to name a few. Unions also grew during this period, and the power of workers helped create a more just society.

After 1973, we saw the end of the Vietnam War, the decline in manufacturing and industry, rapid technological change and the expansion of globalization, which brought dramatic change to our economy.

• Since 1973, U.S. workers have constantly increased our productivity, but our wages haven't kept up. As a result, average wages today are only 15 percent higher than in 1980, while productivity increased 67 percent in the same period. See chart.
• The growth of family incomes slowed greatly after 1973, while the incomes of the richest 20 percent of families have risen much faster. See chart.

The number of workers in unions declined during this period, so workers lost power and the ability to protect their living standards.

Today's faltering economy hits certain communities harder than others. According to the Economic Policies Institiute, household income from 2000-2006 among African Americans declined by 8 percent and among Latinos by 2.7 percent. Similarly, real annual earnings for women declined by 1 percent in 2005, the largest one-year drop since 1995. (See EPI's Income Picture for the full report.)

Where Did the Money Go?

Over half of all the benefits of economic growth since 1973 have gone to the richest 10 percent of America's families, most of it to the top 1 percent. CEOs and other corporate insiders have taken much of the increase in productivity, in the form of increasing profits and returns to shareholders. The average CEO earns more on the first day of the year than the average worker earns all year. While the ratio of CEO pay to the pay of average workers was 42:1 in 1980, today it is 364:1.

Today we are growing farther apart, not closer together — economically, socially and politically.

The Real Corporate Agenda: We Make It, They Take It

Our declining economic conditions are the direct result of a set of economic policies, which have dominated our country for decades to the benefit of corporations, corporate executives and the wealthy. Over the past three decades, corporations — together with their political allies and free market fundamentalists — have put pursued a Corporate Agenda, which has destroyed good jobs and radically shifted power away from working people and their unions. To learn more about the Corporate Agenda, click here.

Employers have been using their increased power to keep the growth in productivity to themselves, to shift health care costs and taxes onto working families and to walk away from their responsibilities for retirement security.

Solutions

Today's economy is not an accident, and it doesn't have to be this way.

Most people earn their living by working. The economy should exist to serve the needs of working people, not the other way around. The goal of economic policy is to support a strong and internationally competitive American economy whose benefits are broadly shared. Our Working Families Agenda proposes alternative policies to the Corporate Agenda — policies that serve the interests of and values of America's working families.

The Working Families Agenda

The Working Families Agenda includes a just global economy that promotes fair trade, rebuilds manufacturing and advocates justice for all workers. We must negotiate fair trade agreements that protect the rights of workers in all countries to form unions and bargain collectively. We must rebuild our industrial base and restore American competitiveness in the global economy;

• Good government — quality services, public investment and fair taxes. We must invest in our public services and return balance to our tax system;
• Full employment — sustainable growth and good jobs for all;
• We need protection for fundamental workers' rights — a living wage, freedom to form unions and social protection.

We can make this agenda a reality if we join together and take action.

• Join Working America, the nation's fastest-growing organization for working families. More than 2 million members fight for good jobs and a just economy.
• Change the rules that create roadblocks to joining a union. Sign the petition in support of the Employee Free Choice Act, and learn 10 key facts about the act. Did you know 60 million workers say they would join a union if they could? Get the facts here.
• Support health care reform. America's health care system is broken. Today health care costs too much, covers too little, excludes too many—and it's getting worse. To get involved, sign our petition and learn more about the campaign for quality affordable health care for all at at www.aflcio.org/healthcare.
• Change the policy rules to demand corporate accountability. Visit our Action Center to take action on campaigns that bring us together to fight for these changes.

By joining together and taking action, we can reverse the trend of an economy built on us working longer and harder for less. Let's restore the promise of a better future for our children. Working together we can build a society that rewards hard work, a society that inspires young people to realize their potential and a society that values equality and economic justice. We can, and will, use our voices to change the policies of our country, build our strength in numbers and win for all working people.

Learn More

Find out more about the jobs crisis in America, visit the AFL-CIO's Economy that Works for All.