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SCOTUS reinforced power imbalance in the workplace  
Posted (2018-05-22)

The economy has been growing for almost 10 straight years. The unemployment rate has fallen below 4 percent for the first time since 2000. And yet wage growth remains stubbornly mediocre. How could that be?

It’s a complicated topic, and there is no single answer. But the power of American companies, relative to the power of workers, seems to be a big part of the story. Companies are bigger than they used to be — sometimes dominant in their own particular industry — and labor unions are far weaker. If workers don’t like their paycheck, they often don’t have any good way to demand more money or find a higher-paying job.

This power mismatch between companies and workers is a long-running story. Corporate profits have surged since the 1980s, at the expense of pay and benefits for workers. The switch is equal to about 4 percentage points of G.D.P. — which works out as $6,000 per household every year. We’re talking about real money.

One of the more important ways that companies have gained the upper hand over workers has been legal changes that have made it harder for workers (and consumers) to band together and exercise power. A very business-friendly Supreme Court has often been the source of these changes. That trend continued yesterday with a 5-4 ruling that will make it much more difficult for workers to fight back against companies they believe are engaging in wage theft, discriminatory pay practices or various other misbehaviors.

The ruling allows companies to force (nonunionized, private-sector) workers to forfeit their right to sue collectively, as a condition of employment. Effectively, this means workers often can’t sue at all, because individual employees usually don’t have the money to hire lawyers and file a claim.

Speaking from the bench yesterday, Justice Ruth Bader Ginsburg predicted that the decision would lead to “huge under-enforcement of federal and state statutes designed to advance the well being of vulnerable workers.” The Supreme Court expert Amy Howe, writing on her blog, called the ruling “a huge victory for employers.”

It is, indeed. Corporate America just became even more powerful, and workers less so.

A reminder: This ruling would have gone the other way if the Senate had allowed President Barack Obama to fill an empty Supreme Court seat in 2016. Neil Gorsuch, President Trump’s appointee, provided the swing vote and wrote the opinion.

In The Times, Terri Gerstein and Sharon Block of Harvard Law School urge Congress and state legislatures to right the court’s wrong. “People need a real and enforceable right to demand that laws be fairly applied. The Supreme Court has undermined this principle,” they write.

Related: A Paul Krugman blog post on the lack of wage growth.

David McLaren
Email: [email protected]

Twitter: @JDavidMcLaren

Web: https://jdavidmclaren.wordpress.com/

 


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