The Economic and Political Stalemate, 1971–80
Given the decline of US dominance in the world economy, the American economy was not growing fast enough to satisfy the claims being paced on it by those living in the country. Labor and management were struggling over the production and distribution of income. American workers wanted higher living standards. Though many were jobless in the 1970s, organized labor still maintained enough bargaining power to push up nominal wages and widen the pay gap between union and nonunion workers. Nevertheless, while nominal wages rose, real wages did not. Employers were trying to improve their real return from profits. Conflicts between labor and management emerged over the work process and the rate of production. Employers were able to maintain profit rates but were not able to raise them to levels existing before the “profit squeeze” of the late 1960s.
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