CreditCreditIllustration by Alvaro Dominguez; Photographs by Chris Clor and Classen Rafael/EyeEm, via Getty Images
On August 3, 2019, Steven Greenhouse writes in The New York Times:
The United States is the only advanced industrial nation that doesn’t have national laws guaranteeing paid maternity leave. It is also the only advanced economy that doesn’t guarantee workers any vacation, paid or unpaid, and the only highly developed country (other than South Korea) that doesn’t guarantee paid sick days. In contrast, the European Union’s 28 nations guarantee workers at least four weeks’ paid vacation.
Among the three dozen industrial countries in the Organization for Economic Cooperation and Development, the United States has the lowest minimum wage as a percentage of the median wage — just 34 percent of the typical wage, compared with 62 percent in France and 54 percent in Britain. It also has the second-highest percentage of low-wage workers among that group, exceeded only by Latvia.
All this means the United States suffers from what I call “anti-worker exceptionalism.”
Academics debate why American workers are in many ways worse off than their counterparts elsewhere, but there is overriding agreement on one reason: Labor unions are weaker in the United States than in other industrial nations. Just one in 16 private-sector American workers is in a union, largely because corporations are so adept and aggressive at beating back unionization. In no other industrial nation do corporations fight so hard to keep out unions.
The consequences are enormous, not only for wages and income inequality, but also for our politics and policymaking and for the many Americans who are mistreated at work.
To be sure, unions have their flaws, from corruption to their history of racial and sex discrimination. Still, Jacob S. Hacker and Paul Pierson write of an important, unappreciated feature of unions in “Winner-Take-All Politics”: “While there are many ‘progressive’ groups in the American universe of organized interests, labor is the only major one focused on the broad economic concerns of those with modest incomes.”
As workers’ power has waned, many corporations have adopted practices that were far rarer — if not unheard-of — decades ago: hiring hordes of unpaid interns, expecting workers to toil 60 or 70 hours a week, prohibiting employees from suing and instead forcing them into arbitration (which usually favors employers), and hamstringing employees’ mobility by making them sign noncompete clauses.
America’s workers have for decades been losing out: year after year of wage stagnation, increased insecurity on the job, waves of downsizing and offshoring, and labor’s share of national income declining to its lowest level in seven decades.
Numerous studies have found that an important cause of America’s soaring income inequality is the decline of labor unions — and the concomitant decline in workers’ ability to extract more of the profit and prosperity from the corporations they work for. The only time during the past century when income inequality narrowed substantially was the 1940s through 1970s, when unions were at their peak of power and prominence.
Many Americans are understandably frustrated. That’s one reason the percentage who say they want to join a union has risen markedly. According to a 2018 M.I.T. study, 46 percent of nonunion workers say they would like to be in a union, up from 32 percent in 1995. Nonetheless, just 10.5 percent of all American workers, and only 6.4 percent of private-sector workers, are in unions.
But this desire to unionize faces some daunting challenges.In many corporations, the mentality is that any supervisor, whether a factory manager or retail manager, who fails to keep out a union is an utter failure.That means managers fight hard to quash unions. One study found that 57 percent of employers threatened to close operations when workers sought to unionize, while 47 percent threatened to cut wages or benefits and 34 percent fired union supporters during unionization drives.
Corporate executives’ frequent failure to listen to workers’ concerns — along with the intimidation of employees — can have deadly results. On April 5, 2010, a coal dust explosion killed 29 miners at Massey Energy’s Upper Big Branch coal mine in West Virginia. A federal investigation found that the mine’s ventilation system was inadequate and that explosive gases were allowed to build up. Workers at the nonunion mine knew about these dangers. “No one felt they could go to management and express their fears,” Stanley Stewart, an Upper Big Branch miner, told a congressional committee. “We knew we’d be marked men and the management would look for ways to fire us.”
The diminished power of unions and workers has skewed American politics, helping give billionaires and corporations inordinate sway over America’s politics and policymaking. In the 2015-16 election cycle, business outspent labor $3.4 billion to $213 million, a ratio of 16 to 1, according to the nonpartisan Center for Responsive Politics. All of the nation’s unions, taken together, spend about $48 million a year for lobbying in Washington, while corporate America spends $3 billion. Little wonder that many lawmakers seem vastly more interested in cutting taxes on corporations than in raising the minimum wage.
There were undoubtedly many reasons for Donald Trump’s 2016 victory, but a key one was that many Americans seemed to view him as a protest candidate, promising to shake up “the system” and “drain the swamp.” Many voters embraced Mr. Trump because they believed his statements that the system is rigged — and in many ways it is.When it comes to workers’ power in the workplace and in politics, the pendulum has swung far toward corporations.
Reversing that won’t be easy, but it is vital we do so. There are myriad proposals to restore some balance, from having workers elect representatives to corporate boards to making it easier for workers to unionize to expanding public financing of political campaigns to prevent wealthy and corporate donors from often dominating.
America’s workers won’t stop thinking the system is rigged until they feel they have an effective voice in the workplace and in policymaking so that they can share in more of the economy’s prosperity to help improve their — and their loved ones’ — lives.
Gary Reber Comments:
Unions have been inept to REALLY represent the economic interest of working Americans. The labor union movement has NEVER represented workers to become owners of the corporations that employ them. Instead, concentrated ownership of the corporate shell that represents the physical capital assets they own is the norm.
Numerous studies have found that an important cause of America’s soaring income inequality is the decline of labor unions — and the concomitant decline in workers’ ability to extract more of the profit and prosperity from the corporations they work for in the form of wages and salaries and benefits, instead of REAL ownership stakes in addition to employment as workers.
If real transformation is to be realized to benefit the American working class and their families, then the labor union movement needs to transformation to a producers’ ownership union movement and embrace and fight for economic democracy and shared ownership. They should play the part that they have always aspired to — that is, a better and easier life through participation in the nation’s economic growth and progress. As a result, labor unions will be able to broaden their functions, revitalize their constituency, and reverse their decline.
Unfortunately, at the present time the movement is built on one-factor economics — the labor worker. The insufficiency of labor worker earnings to purchase increasingly capital-produced products and services gave rise to labor laws and labor unions designed to coerce higher and higher prices for the same or reduced labor input. With government assistance, unions have gradually converted productive enterprises in the private and public sectors into welfare institutions. Binary economist and author Louis O. Kelso stated: “The myth of the ‘rising productivity’ of labor is used to conceal the increasing productiveness of capital and the decreasing productiveness of labor, and to disguise income redistribution by making it seem morally acceptable.”
Historically and in its present form, the labor movement is destructive in that it agrees with the idea that propertyless people should exist to serve those who own property. The labor movement doesn’t seek to end wage slavery; it merely seeks to improve the condition of the wage slave. If it actually cared about human rights and freedom, it wouldn’t call itself the “labor movement.”
Kelso argued that unions “must adopt a sound strategy that conforms to the economic facts of life. If under free-market conditions, 90 percent of the goods and services are produced by capital input, then 90 percent of the earnings of working people must flow to them as wages of their capital and the remainder as wages of their labor work… If there are in reality two ways for people to participate in production and earn income, then tomorrow’s producers’ union must take cognizance of both… The question is only whether the labor union will help lead this movement or, refusing to learn, to change, and to innovate, become irrelevant.”
Unions are the only group of people in the whole world who can demand a real, justice managed Employee Stock Ownership Plan (ESOP), who can demand the right to participate in the expansion of their employer by asserting their constitutional preferential rights to become capital owners, be productive, and succeed. The ESOP can give employees access to capital credit so that they can purchase the employer’s stock, pay for it in pre-tax dollars out of the earnings generated by the new assets that underlie that stock, and after the stock is paid for earn and collect the capital earnings income from it, and accumulate it in a tax haven until they retire, whereby they continue to be productive capital earners receiving income from their capital asset ownership stakes. This is a viable route to individual self-sufficiency needing significantly less or no government redistributive assistance.
The unions should reassess their role of bargaining for more and more income for the same work or less and less work, and embrace a cooperative approach to survival, whereby they redefine “more” income for their workers in terms of the combined wages of labor and capital on the part of the workforce. They should continue to represent the workers as labor workers in all the aspects that are represented today — wages, hours, and working conditions — and, in addition, represent workers as full voting stockowners as capital ownership is built into the workforce. What is needed is leadership to define “more” as two ways to earn income.
If we continue with the past’s unworkable trickle-down economic policies, governments will have to continue to use the coercive power of taxation to redistribute income that is made by people who earn it and give it to those who need it. This results in ever deepening massive debt on local, state, and national government levels, which leads to the citizenry becoming parasites instead of enabling people to become productive in the way that goods, products, and services are actually produced.
When labor unions transform to producers’ ownership unions, opportunity will be created for the unions to reach out to all shareholders (stock owners) who are not adequately represented on corporate boards, and eventually all labor workers will want to join an ownership union in order to be effectively represented as an aspiring capital owner. The overall strategy should assure that the labor compensation of the union’s members does not exceed the labor costs of the employer’s competitors, and that capital earnings of its members are built up to a level that optimizes their combined labor-capital worker earnings. A producers’ ownership union would work collaboratively with management to secure financing of advanced technologies and other new capital investments and broaden ownership. This will enable American companies to become more cost-competitive in global markets and to reduce the outsourcing of jobs to workers willing or forced to take lower wages.
Kelso stated, “Working conditions for the labor force have, of course, improved over the years. But the economic quality of life for the majority of Americans has trailed far behind the technical capabilities of the economy to produce creature comforts, and even further behind the desires of consumers to live economically better lives. The missing link is that most of those un-produced goods and services can be produced only through capital, and the people who need them have no opportunity to earn income from capital ownership.”
Walter Reuther, President of the United Auto Workers, expressed his open-mindedness to the goal of democratic worker ownership in his 1967 testimony to the Joint Economic Committee of Congress as a strategy for saving manufacturing jobs in America from being outcompeted by Japan and eventual outsourcing to other Asian countries with far lower wage costs: “Profit sharing in the form of stock distributions to workers would help to democratize the ownership of America’s vast corporate wealth, which is today appallingly undemocratic and unhealthy.
“If workers had definite assurance of equitable shares in the profits of the corporations that employ them, they would see less need to seek an equitable balance between their gains and soaring profits through augmented increases in basic wage rates. This would be a desirable result from the standpoint of stabilization policy because profit sharing does not increase costs. Since profits are a residual, after all costs have been met, and since their size is not determinable until after customers have paid the prices charged for the firm’s products, profit sharing [through wider share ownership] cannot be said to have any inflationary impact on costs and prices.”
Unfortunately for democratic unionism, the United Auto Workers, American manufacturing workers, and American citizens generally, Reuther was killed in an airplane crash in 1970 before his idea was implemented. Leonard Woodcock, his successor, nor any subsequent union leader never followed through.
The union movement should also expand beyond representing corporate employees and represent capital ownership empowerment for all propertyless citizens.
