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INCOME GAP BECOMING AN INCOME CHASM

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The gap in income between the top and the bottom of the American work force is growing, a new government report shows. Union representation is declining, and workplace litigation is escalating.

All this is taking place in an American work force that is now the most stratified work force in the industrial world.The 163-page report by President Clinton's Commission on the Future of Worker-Management Relations is "fact-finding" only at this point, with recommendations due in November after public hearings.

But Labor Secretary Robert Reich said Thursday that the report really was an urgent call for action: "A society divided between the haves and have-nots, or between the well-educated and the poorly educated, that becomes sharply divided over time, cannot be a prosperous or stable society."

Among the findings:

- The top 10 percent of American workers earn salaries an average 5.63 times greater than wages paid workers in the bottom 10 percent, a range that is "by far the widest" of all industrialized countries.

- The bottom 10 percent of American workers earn "barely half" what their counterparts in Europe get. That doesn't count the health insurance and other fringe benefits routinely provided to low-income workers in Europe but rare for Americans.

- In 1972, the average college-educated male in the U.S. work force earned 1.42 times more than the average high-school graduate. By 1990, the gap had grown, to 1.53 times. The gap also grew for women, from 1.6 times in 1972 to 1.66 times in 1990.

- Real incomes for American workers have stagnated for the past two decades, the report notes. For male workers, real incomes actually fell during that period, by an average of 0.5 percent a year. Both developments, the report says, were "unprecedented in the past 75 years."

The stagnation of real earnings and increased inequality of earnings is splitting the labor force into two parts, the report said, "with an upper tier of high-wage skilled workers and an increasing `underclass' of low-paid labor."

These trends have occurred in the context of a rapid decline in union membership, the report notes, from 33 percent of the work force a generation ago to 16 percent today. Also during this time there has been an increase in government-mandated worker rights - ranging from laws on occupational safety and health to pensions, and family and medical leave.

The 10-member commission is chaired by former Labor Secretary John Dunlop and is known as the Dunlop Commission. It was established last year, charged with improving U.S. productivity and competitiveness through better workplace relations.

Thomas Donahue, secretary-treasurer of the AFL-CIO, hailed the report's acknowledgement that traditional collective-bargaining agreements, although declining in number, continue to be the most effective vehicle for the creation of productive worker-management partnerships.

"The report demonstrates beyond question that to create these kinds of partnerships . . . to provide the means of resolving disputes without litigation and, most importantly, to arrest the trend toward a two-tier society, we must assure working men and women a meaningful opportunity to form unions and to bargain collectively with their employer," Donohue said.

Business groups generally praised the report as well, especially its documentation of the costs of workplace regulation.

Peter Eide, manager of labor law issues for the U.S. Chamber of Commerce, said he hoped the report would "set the stage for relieving American businesses from the morass of unnecessary laws and regulations that merely frustrate efforts to increase employee participation, create jobs, improve productivity and maintain competitiveness."