Joe Biden took a victory lap last week to avert a rail strike that would only worsen supply-chain choke points and further accelerate inflation. The White House directed union chiefs to stand with midterm elections. He followed dutifully. Anything to keep the Democrats in charge.
but what is He done for them, Railroad workers achieved a 24% wage increase and a $1,000 bonus over five years. But these employees had not already received a salary increase before the pandemic. And with inflation running at over 12% over the past 18 months, at the end of the day workers’ real take-home pay may not increase at all if these price increases continue.
There is a painful lesson here. History proves time and again that some of the biggest losers from high inflation are the Sangh Parivar working under multi-year contracts.
In the 1970s, the last time inflation was so high, United Auto Workers and other industrial unions flexed their muscles and negotiated a three-year wage increase for their members, the kind that railroad workers had just signed. had done. Then auto workers realized they would be played out because near double-digit inflation under President Jimmy Carter destroyed all those gains.
rank and file member Lost Even though the union bosses did a little jig dance.
When Ronald Reagan entered office and broke the back of inflation, workers took large real wage increases as prices at the store increased, and within a year and a half the gas pump fell from an annual rate of 12% to just 3.5%. . Labor unrest and workers’ strikes almost disappeared in the 1980s after inflation was overcome.
It wasn’t just the massive interest rate hikes under then-Fed Chairman Paul Volcker that conquered inflation. The Reagan tax cut stimulated production, which increased the supply of goods and services on the shelves. The workers benefited immensely.
We saw the same phenomenon under Trump’s presidency. Tax cuts, regulation and pro-US energy policies kept inflation at 2% for four years. Blue-collar union workers flourished. After inflation, workers earned the annual equivalent of $4,000 in the four years following Donald Trump. One key to Trump’s success: He expanded America’s oil and gas production, which meant tens of thousands of federalized trucking, construction, engineering and drilling jobs with salaries of up to $100,000 per year.
Is it any surprise that Trump is known as the blue-collar president with overwhelming support from Families of the Union – even as Big Labor bosses went for Biden?
Amazingly, even the miners and pipe-fitters unions supported Biden, though he promised to kill coal and natural gas pipelines and the union jobs that go with them. Labor bosses put their allegiance to Democrats ahead of the best interests of their members—many of whom later lost their jobs.
But Democrats have put their first allegiance behind the green environmental movement even when it means putting union workers in the energy industry on the unemployment line.
In just two years, all the proceeds from Trump’s years under the current administration have been wiped out. Real earnings have fallen since President Biden took office, dropping the annual equivalent of $4,200 from inflation and high borrowing costs. Union contracts promising large wage benefits have seen workers’ living standards plummet.
Biden couldn’t have been more harsh and wrong about White House inflation. it is No “Transient” and it certainly isn’t a “high-grade problem”. Ask truck drivers how they feel about paying $6-a-gallon diesel prices.
It doesn’t matter how much support Biden gets from the presidents of the Big Labor union, who drink and dine at the White House. Members of the consortium of America’s private sector are victims of the president’s multi-trillion-dollar spending spree that lit a wildfire of runaway inflation.
The people who kept our economy from coming to a complete halt during the pandemic – nurses, electricians, truck drivers, miners, autoworkers and rail workers – have gotten poorer every month Biden has been in office. But hundreds of billions of dollars have been poured into the coffers of Green New Deal operatives.
Don’t be surprised if the Biden Democrats in Congress, who voted for this big government/radical environmental agenda, pay a high price for the betrayal of working men and women in the November elections.
Stephen Moore and EJ Antoine are economists at The Heritage Foundation. Moore is a co-founder of the Committee to Unleash Prosperity, where Antoine is a Senior Fellow.