A piece by Sarah Jaffe on why the labor movement remains the key to everything:

Labor Unions’ Fight for the 99% Goes Way Beyond Raising Campaign Dollars

“Labor is prior to, and independent of, capital; that, in fact capital is the fruit of labor, and could never have existed if labor had not existed first; that labor can exist without capital, but that capital could never have existed without labor. Hence … labor is the superior — greatly the superior — of capital.”

–Abraham Lincoln, Milwaukee, Wis., Sept. 30, 1859

Today, March 25, 2011, is the hundredth anniversary of the fire at the factory of the Triangle Waist Company on the eighth, ninth, and tenth floors of a building near Washington Square Park in Greenwich Village. The factory employed young Jewish and Italian immigrant women sewing “shirtwaists,” the new blouse style that remained popular into the 1960′s. (Donna Reed, among others, wore them on TV, and they’re currently featured on AMC’s Mad Men.)

A few minutes before the end of shift on Saturday afternoon, someone apparently dropped a match or cigarette into a scrap box on the eighth floor. People on the tenth floor were alerted by phone. People on the ninth only learned of the fire when it reached them.

The New York Fire Department arrived quickly, but water pressure was insufficient to reach higher than the sixth floor. Sprinkler technology was apparently already available, but property-owners considered it too expensive and resisted attempts to mandate it.

The fire exits to the stairwells were locked –illegally, of course — to prevent theft. The foreman who had the key got out quick, and saved himself. The two guys running the elevators, however, kept going back up as long as they could — until the rails warped in the heat and the cars were overloaded by the weight of bodies from people who had jumped into the shafts.

There was a fire-escape, which collapsed quickly under the weight of people. The NYFD life nets also failed. The only thing left to do was jump, which many of the girls did. (Apparently a couple were found alive on the sidewalk.)

According to legend, a gentleman was seen at one of the windows helping the girls out. It’s just as well that he did, because any girl who hesitated would be in flames as she fell.

There was also a wrought-iron fence on the ground, with spikes on which some of the jumpers were impaled.

Of about 500 people who would have been in the factory that day, 146 died.

One of the witnesses on the ground was young woman named Frances Perkins, who was later U.S. Secretary of Labor, the first woman in the Cabinet, and one of the architects of much of the New Deal labor reform.

The owners of the factory were brought to trial but beat the rap. Apparently one of the key witnesses against them, who was probably not a native-speaker of English, had actually memorized her testimony.

One of the owners was fined $20 a couple years later, however, for — you guessed it — locking fire exits.

File this one under “Why We Fight.”

It’s time to tell the truth about the free market.

It’s a useful social tool — sometimes — but it’s no panacea. People get to the conclusion that it produces the best outcomes only by arguing in a circle: The best outcomes are, by definition,those produced by the free market, so … the market produces the “best” outcomes. (QED)

Let’s get specific, with an issue which is now roaring to the front. What determines the price of labor under a market system? Advocates of capitalism say that it all comes down to productivity; productive labor is more highly paid. Nonsense. I’m no economist, but I did take basic econ back in the day. Back then we said that, in an unrestricted market, prices are set by (surprise) supply and demand. Anything that increases the supply of a commodity or reduces the demand drives down the price.

What raises the supply of labor? Population increase, of course, but also bringing new populations into the labor force. End discrimination against women or minorities, and suddenly there’s more labor. Reduce shipping costs so that products can be brought in from Mexico or China — or call centers can be located in India — and again, more supply. Productivity increases, of course, reduce the demand for labor. So do reductions in the aggregate demand for goods and services as working people’s incomes go down — because their wages are falling and their credit lines are tapped out. In sum, there is a “natural” tendency for the wage rate to fall. That’s not a distortion of the market — that’s how it’s supposed to work.

Won’t increasing people’s education levels bring them higher pay? Why would it? You’re just increasing the supply of educated workers. If everyone got an engineering degree, engineers would be paid minimum wage.

So what will raise the price of labor? Raising demand or lowering supply. If someone — anyone, including the government — puts in orders for, say, new infrastructure or green technology, the demand will go up. If the supply is restricted by, say, rebuilding the unions, the supply will go down.

Won’t that violate the “laws of the market”? Well, yeah. You got a problem with that?

Let’s get simple.

The tripod, as any engineer can tell you, is the most stable structural form. If we want to be a society where substantially all of the population — the folks Bill Clinton used to say “play by the rules” — enjoy a decent and secure middle-class life, we need to build on three feet.

The first is a high level of unionization. It’s really very simple: Where unions are strong, working people live well, and where they’re not, they don’t.

The second is progressive taxation. The unregulated free market, which has been practically deified in this country in the last few decades, produces extreme inequalities. Progressive taxes counteract that. Again, very simple.

And the third is generous social spending — paid for by number two. Everywhere else in the developed world people don’t have to worry about being wiped out financially by health problems, or losing their shelter in a downturn. It just doesn’t happen.

What do these all have in common? They do not stand in awe of the “free market.” Yes, unions “distort” the market by artificially restricting the supply of labor. Yes, progressive taxation and social spending take from those who have “earned” in the market and gives to those who haven’t.

Know what? I couldn’t care less.