[raiflip]

A fairly simple explanation that for some reason I don't see a lot of is the drop in union membership density around this time period. Such a drop would decrease bargaining power and therefore decrease the rate of wage increase

[throwaway-8c93]

After having witnessed dramatic declines in union membership in new European Union members, and continuing downward trend in Scandinavian countries, I feel like the drop in membership is the consequence of unions becoming powerless, not a cause. If even the large unions cannot mount any effective pressure for increasing compensation, shrug at layoffs, and are fatalistic about outsourcing, what's the point of being a member?

Anecdote from Finland: in a personal conversation, one long-term union representative bemoaned that, until mid 2000s, companies considered unions as partners, consulted difficult staffing decisions with them, or at the very least felt obliged to justify the reasoning behind companies' decisions. After the crisis, the mood all changed - spending cuts, layoffs or any changes to salaries or benefits are now presented as a done deal from higher up, any union negotiations are treated as a mere formality.

[raiflip]

The drip is definitely correlation until proven to be causation. So it is possible the drop was a function of a common underlying cause.

The reason no other explanation makes sense to me is that any purely market based explanation, like energy or China, we would see a corresponding drop in US labor force productivity, but the whole point is that that productivity did not drop.

One question i have for you is, why didn’t the union just fight the cuts? A union is not a nicety granted by the corporation, its whole reason to be is to fight corporate power when needed. It sounds to me like that union was already made powerless by the time the crisis occurred.

[throwaway-8c93]

It's not a fair fight. In the end, there is a huge asymmetry in power, all the real power lies with the corporation. Behaving with clemency and goodwill is a privilege bestowed upon employees (and unions) that can be unilaterally revoked. If push comes to shove, the corporation can very much steamroll any resistance, especially when times are bad, and even more so once the corporation diversifies the risk by becoming a multi-national.

[raiflip]

Eh I can see where you are coming from, but I don't necessarily agree with that. At least here in the US, corporations never accepted to unions as legitimate. It always took giant draw out strikes.

[Fazel94]

If anything goes wrong, they are getting bailed out without consequence. So why should they care?

[xeromal]

Yeah, there were a lot of key things that happened but it's hard to pin what caused everything else to blow open

[raiflip]

For sure

[TwoBit]

Is there a chart for that?

[raiflip]

Graph created by the Washington Post: https://www.washingtonpost.com/resizer/7IbsRIhRFbTYRuEjla6ki...

You can see union membership was on the decline since the 1950s, but it accelerated around the 70s. It is hard to see the timeline in that graph, in this one it is harder to see the acceleration, but it is easier to see the timeline: https://rpubs.com/jncohen/uniondensity