310 THE RICH,RICHER AND THE POOR,POORER to do routine programming cheaply,is proving to be levels,reduce wage levels of entering workers,or particularly attractive to global webs in need of this reduce wages overall.This is an important reason service.13y 1990,Texas Instruments maintained a why the long economic recovery that began in 1982 software development facility in Bangalore,linking produced a smaller rise in unit labor costs than any fifty Indian programmers by satellite to TI's Dallas of the eight recoveries since World War II-the headquarters.Spurred by this and similar low rate of unemployment during its course ventures,the Indian government was building a notwithstanding. teleport in Poona,intended to make it easier and Routine production jobs have vanished fastest in less expensive for many other firms to send their traditional unionized industries (autos,steel,and routine software design specifications for coding rubber,for example),where average wages have (Gupta 1989). kept up with inflation.This is because the jobs of This shift of routine production jobs from older workers in such industries are protected by advanced to developing nations is a great boon seniority;the youngest workers are the first to be to many workers in such nations who otherwise laid off.Faced with a choice of cutting wages or would be jobless or working for much lower wages. cutting the number of jobs,a majority of union 'Mese workers,in turn,now have more money members (secure in the knowledge that there are with which to purchase symbolic-analytic services many who are junior to them who wi I I be laid off from advanced nations (often embedded within first)often have voted for the latter. all sorts of complex products).The trend is also Thus the decline in union membership has been beneficial to everyone around the world who can most striking among young men entering the work now obtain highvolume,standardized products force without a college education.In the early (including information and software)more cheaply19s,more than 40 per cent of this group joined than before. unions;by the late 1980s,less than 20 per cent (if But these benefits do not come without certain public employees are exciuded,less than 10 per- costs.In particular the burden is bome by those who cent)(Katz and Revenga 1989).In steelmaking,for no longer have good-paying routine production example,although many older workers remained jobs within advanced economies like the United employed,almost hall of all routine steelmaking States.Many of these people used to belong to jobs in America vanished between 1974 and 1988 unions or at least benefited from prevailing wage (from 480,000 to 260,000).Similarly with auto- rates established in collective bargaining agree- mobiles:During the 1980s,the United Auto Work- ments.But as the old corporate bureaucracies have ers lost 500,000 members-one-third of their total flattened into global webs,bargaining leverage at the start of the decade.General Motors alone cut has been lost.Indeed,the tacit national bargain is 150,000 American production jobs during the 1980s (even as it added employment abroad). no more. Despite the growth in the number of new jobs in Another consequence of the same phenomenon: the United States,union membership has withered. The gap between the average wages of unionized In 1960,35 percent of all nonagricultural workers and nonunionized workers widened dramatically- in America belonged to a union.But by 1980 that from 14.6 per cent in 1973 to 20.4 per cent by end of the 1980s.2 The lesson is clear.If you drop out of portion had fallen to just under a quarter,and by high school or have no more than a high school 1989 to about 17 percent.Excluding govern-diploma,do not expect a good routine production ment employees,union membership was down to job to be awaiting you. 13.4 percent (US Government Printing Office 1989). This was a smaller proportion even than in the Also vanishing are lower-and middle-leve)man- early 1930s,before the National Labor Relations agement jobs involving routine production. Act created a legally protected right to labor Between 1981 and 1986,more than 780,000 fore- representation.The drop in membership has been men,supervisora,and section chiefs lost their jobs accompanied by a growing number of collective through plant closings and layoffs (US Dept of bargaining agreements to freeze wages at current Labor 1986).Large numbers of assistant division310  THE RICH, RICHER AND THE POOR, POORER to do routine programming cheaply, is proving to be particularly attractive to global webs in need of this service. 13y 1990, Texas Instruments maintained a software development facility in Bangalore, linking fifty Indian programmers by satellite to TI's Dallas headquarters. Spurred by this and similar ventures, the Indian government was building a teleport in Poona, intended to make it easier and less expensive for many other firms to send their routine software design specifications for coding (Gupta 1989). This shift of routine production jobs from advanced to developing nations is a great boon to many workers in such nations who otherwise would be jobless or working for much lower wages. 'Mese workers, in turn, now have more money with which to purchase symbolic­analytic services from advanced nations (often embedded within all sorts of complex products). The trend is also beneficia] to everyone around the world who can now obtain highvolume, standardized products (including information and software) more cheaply than before. But these benefits do not come without certain costs. In particular the burden is borne by those who no longer have good­paying routine production jobs within advanced economies like the United States. Many of these people used to belong to unions or at least benefited from prevailing wage rates established in collective bargaining agree­ ments. But as the old corporate bureaucracies have flattened into global webs, bargaining leverage has been lost. Indeed, the tacit national bargain is no more. Despite the growth in the number of new jobs in the United States, union membership has withered. In 1960, 35 percent of all nonagricultural workers in America belonged to a union. But by 1980 that portion had fallen to just under a quarter, and by 1989 to about 17 percent. Excluding govern­ ment employees, union membership was down to 13.4 percent (US Government Printing Office 1989). This was a smaller proportion even than in the early 1930s, before the National Labor Relations Act created a legally protected right to labor representation. The drop in membership has been accompanied by a growing number of collective bargaining agreements to freeze wages at current levels, reduce wage levels of entering workers, or reduce wages overall. This is an important reason why the long economic recovery that began in 1982 produced a smaller rise in unit labor costs than any of the eight recoveries since World War II—the low rate of unemployment during its course notwithstanding. Routine production jobs have vanished fastest in traditional unionized industries (autos, steel, and rubber, for example), where average wages have kept up with inflation. This is because the jobs of older workers in such industries are protected by seniority; the youngest workers are the first to be laid off. Faced with a choice of cutting wages or cutting the number of jobs, a majority of union members (secure in the knowledge that there are many who are junior to them who wi I I be laid off first) often have voted for the latter. Thus the decline in union membership has been most striking among young men entering the work force without a college education. In the early 1950s, more than 40 per cent of this group joined unions; by the late 1980s, less than 20 per cent (if public employees are exciuded, less than 10 per­ cent) (Katz and Revenga 1989). In steelmaking, for example, although many older workers remained employed, almost hall of all routine steelmaking jobs in America vanished between 1974 and 1988 (from 480,000 to 260,000). Similarly with auto­ mobiles: During the 1980s, the United Auto Work￾ers lost 500,000 members—one­third of their total at the start of the decade. General Motors alone cut 150,000 American production jobs during the 1980s (even as it added employment abroad). Another consequence of the same phenomenon: The gap between the average wages of unionized and nonunionized workers widened dramatically￾from 14.6 per cent in 1973 to 20.4 per cent by end of the 1980s.2 The lesson is clear. If you drop out of high school or have no more than a high school diploma, do not expect a good routine production job to be awaiting you. Also vanishing are lower­ and middle­leve) man￾agement jobs involving routine production. Between 1981 and 1986, more than 780,000 fore￾men, supervisora, and section chiefs lost their jobs through plant closings and layoffs (US Dept of Labor 1986). Large numbers of assistant division