As Unions Go ...

So goes the middle class, for better or for worse.

| January 27, 2011
un19.gif

At no other time in my almost 30-year career as a union labor lawyer have employees had more reason to join or form a union. 

What employee does not want protection from unfair layoffs or someone to protect their job from elimination? What laid-off employee does not want someone to negotiate their severance pay, health insurance, or enhanced pension benefits? 

Yet, according to a recent Bureau of Labor Statistics report, unions lost 612,000 members in 2010, dropping the unionized share of the work force to 11.9 percent from 12.3 percent in 2009. Union membership in the private sector fell from 7.2 percent to 6.9 percent, the lowest point since the infancy of the labor movement in the 1930s.

The correlation between strong unions and a strong economy in this country is fact. Economist Paul Krugman referred to the years 1929-1947 as "the birth of the middle class." These years also saw the birth and growth of the modern union movement. The number of U.S. workers belonging to labor unions increased from 3.6 million to 15.4 million during those years.

The postwar prosperity years of 1947 to 1973 saw further growth in union membership. As Richard A. Levins wrote, "Middle class economies don't just happen. They are made. Union made."

The wage advantage for a typical union worker is 13.7 percent. The union wage advantage for a low-wage worker is 20.6 percent, says the Center for Economic and Policy Research. Even Fed chairman Ben Bernanke opined in 2008 that there was good evidence that cash that goes to low- and moderate-income people is more likely to be spent in the near future than monies that go to the rich.

The rich spend only so much and then just keep getting richer. The middle class spends out of a felt necessity, thereby contributing to a vigorous economy. 

But, as good union jobs are lost overseas and replaced with minimum-wage jobs with no benefits, the middle class in this country is going the same way as unions — away. The good manufacturing jobs are disappearing, and now we see letters to the editor begrudging auto workers for desiring a good wage, health benefits, and a retirement to look forward to.

In Memphis, the International Harvester and Firestone union jobs are a thing of the past and have not been replaced with anything equivalent. Not coincidentally, the median income across all sectors in Memphis is $30,875, and, according to the U.S. Census Bureau, the income gap between rich and poor in Shelby County is continually growing. 

I fear what this country will be like with the continued decline of the middle class. I wonder what jobs there will be for the high school graduates of the future. They can't all be corporate CEOs or doctors or lawyers. 

I see a country of increasingly rich and increasingly poor, a country more and more polarized. As surely as growth in union participation led to a strong middle class, falling participation has weakened it.

The loss of the middle class leads to an unstable economy polarized into rich and poor. Resurgent unions could balance that power and lead us to where we need to be: a growing, middle-class economy. Government policies that favor unions and the middle class are necessary to keep our economy both fair and growing. 

The currently fashionable attack on unions is not the answer. Companies join together to form cooperatives and chambers of commerce lobby for their interests. But when employees do something similar to better their circumstances, it somehow becomes suspect.

When people criticize unions, I remind them that unions are identical to the people who are their members. Unions give employees — ordinary people — the opportunity to have a voice in the terms and conditions of their employment. Unions sponsor pension plans that invest in the economy, as well as apprenticeship programs that train skilled workers. 

The Roosevelt administration's three-legged stool of retirement — one based on a triad of Social Security, employer-sponsored pensions, and private savings — is wobbling more than ever. 401(k) plans won't replace the legs of the stool. (The average 401(k) balance as of March 31, 2010, was $66,900, according to Boston-based Fidelity Investments, which has 11 million participants.)      

We need better jobs, better wages, and better benefits to improve the economy. If you think we don't need unions anymore, think again. 

Deborah Godwin is a Memphis labor lawyer.

Comments (14)

Showing 1-14 of 14

Unions are thug-cartels that force higher wages on the employer. It is a violation of the right of association and private property. It forces higher wages onto the public goods and services and also causes less job openings at union-based companies, as the company's profits are reduced. It is an indirect form of theft.

report   
Posted by CHG on 01/27/2011 at 6:58 AM

Ahh, just got through watching The Molly Maguires last night....those benevolent coal mine owners sure were nice to their employees.

report   
Posted by Packrat on 01/27/2011 at 7:39 AM

Corporations are thug-cartels that force lower wages on the employee. Union-busting is a violation of the right of association. If forces lower wages onto the workers without reflecting lower prices onto public goods and services and also causes greater job turnover at non-union companies, as the company's profits as hoovered up by shareholders rather than being invested in the company. It is a direct form of theft.

report   
Posted by Jeff on 01/27/2011 at 8:09 AM

Jeff, some corporations may be greedy, but that still does not allow Constitutional usurpation of employer's rights of association and jurisdiction. The unions do not own a corporation or a company. Corporations are foolishly in bed with the state, therefore, they foreit most of their rights.

report   
Posted by CHG on 01/28/2011 at 6:55 AM

Ah, the plantation owners during slavery were employers. And what about the coal mine owners - some of which are still the same today. And what about the Triangle Shirtwaist Factory owners? Both sides should have rights, both sides should be strong. Balance of power. It makes for better companies and a better economy.

report   
Posted by hmmm on 01/29/2011 at 6:35 PM

While Charles is completely wrong as usual, the unions do have a bit of a credibility issue. Rightly or wrongly, the image of unions operating in the same manner as organized crime families is the prevalent notion among most Americans. This in turns leads to idiotic statements much like those that Charles vomits out. The unions and even the corporations aren't entirely to blame for the loss of middle class manufacturing jobs here. The good ol' US government has made it easier, if not outright encouraged the relocation of these jobs overseas. Granted it was done at the behest of corporations, but the feds could have said no.

report   
Posted by mad_merc on 01/29/2011 at 8:00 PM

How else is a worker's voice heard? Collective bargaining. When all of your employees vote to change the way they are treated, and then go into negotiation with the employer. How is this not truly democratic. There have been some very poor choices in the past by unions but how is that different than any voted political organization.

report   
Posted by rambler on 01/29/2011 at 9:48 PM

mad_merc,

The problem facing all levels of government in New York is simple: the pension funds are not being funded adequately to enable retirees to receive what they have been promised. The retirees were overwhelmingly members of various trade unions. For decades, they successfully gained above-market wages and far above-market pension promises. Because unions have some political clout, state legislatures have cooperated. Union members have been able to benefit at the expense of taxpayers. Paying higher wages for products produced by unionized corporations, defeats the purpose of the union members making higher wages. If every company or corporation was unionized, everything we buy would be outrageous and defeat the higher hourly rate paid by the coerced wages. Here is one example where labor unions fail:

'Unions are organized haters of their benefactors, employers. When they do not get their way–more pay for less work–they seek to harm the firm (and non-union workers), often through violence. This time, airline unions used the violence of government to harm their employers. So now airlines like American and Southwest have to jump through impossible bureaucratic-paperwork hoops, leading to vast groundings and harm to passengers. This is exactly what the unions want, since they have all the forsignt and ethics of the scorpion in Aesop’s story. And now Frontier Airlines has filed for bankruptcy.' (from Lewrockwell.com)




report   
Posted by CHG on 01/29/2011 at 9:58 PM

rambler,

That is not exactly true. In my company, the individual does not have be 'absorbed' into the whole. He can appeal in an heirarchy and it is very effective.

report   
Posted by CHG on 01/29/2011 at 9:59 PM

Chain those babies to the looms boys! There's money to be made.

report   
Posted by 38103 on 01/29/2011 at 11:40 PM

Have there been problems with unions in the recent past? Yes. Are we better served by doing away with unions? Absolutely not.

Charles you are a bigger idiot than I ever thought possible if you think that the corporate world would happily pay living wages, offer decent medical coverage, sick time, vacation, even overtime if had not been for unions. Just like Zippie points out, we'd still have kids working in factories and others being paid pennies per day if people like you had their way. Do us all a favor and crawl back in to your 19th century cave and stay there.

report   
Posted by mad_merc on 01/30/2011 at 8:21 AM

When CEOs made 20 to 30 times the average wage, America was competitive in manufacturing. Now that gap is 300-400 times, and workers wages have roughly the same buying power they did in the 1950s.

And the loss in union membership is clearly linked to unions gaining power and embodying Lord Acton's axiom by becoming corrupt.

report   
Posted by Neondragon on 01/31/2011 at 9:35 AM

Charles i'm glad that you are employed by someone who is willing to talk to you even if it is through the hierarchy. You have a good job probably doing a specific skill where they find value in your health and well being.
There are a whole host of other people who don't get to have a say in the way they are treated where they work. They would be told that if they don't like it quit, and they will fill the position with the next person in line for a job. They are a number on the books with a dollar sign next to it, worth only as much as they can get out of you. You are a resource nothing more.
There is a reason why union members call each other Brother and Sister, for the common good of all. It is usually nice to have someone else watching your back, with the ability to go to negotiations with your employer.
Your use of the airline industry's negotiations shows your ignorance of the companies involved. American Airlines is the second biggest airline in the World. With wages ranging from $20 to $40 hr not including pilots, who average $120. Southwest Airlines averages $12 to $30 hr not including pilots, also averaging $120. Southwest operates over 500 aircrafts. There are few people with the ability to do these jobs safely. Why shouldn't these employees have a retirement and decent health care. Oh, this data is after the negotiations ended.

report   
Posted by rambler on 01/31/2011 at 11:31 AM

What we fail to understand is basic right. We sell our services for a price which is mostly dictated to us by the "employer". We are not selling goods or stock options. The most common item sold on an hourly basis is physical labor and if people fail to realize that fact then we are all in serious trouble. Another interesting fact we fail to touch on is the economy. Some will blame the price of goods on the cost of labor but the economy as a whole is affected by the cost of labor. Look around at current prices of goods such as gas, utilities, food, clothing, etc. Now I could be wrong but I haven't seen the price of goods drop. If anything they gradually rise every year, but if wages continue to drop across the board in this country who is going to by those goods? Last I looked the economy depends on consumers spending money on the goods these companies make, but if we can't afford the product our own employer makes then what? Unions only make up 13% of the current American workforce. Back when Union members made up a majority of the American workforce, workers could make a livable wage and had decent benefits and America was on the rise. I bet most don't realize that the majority of today's Union workforce is in the educational field. One of many groups I and most others feel are not paid enough for the service they provide. If we want our economy to grow then we need wages to grow with it. Its simple to me. The economy is starving because most American workers can barley afford the basis necessities to live. I am a Union member and I'm proud to have a freedom that allows me to negotiate a wage for the labor I provide. If we subject ourselves to settle for less and agree with the notion that high wages is the cause of our failed economy then you must ask yourself, am I willing to work for less? Maybe we can become a sub-contractor (1099 employee) so that employers don't have to pay taxes, social security, medicare, work-mans compensation, retirement, health insurance, etc... and maybe just maybe we can afford to pay for all that with a dictated hourly wage. There needs to be a balance for all to be successful, employees and employers. If I owned a company I would see this issue as a gold mine. Unemployment at its highest, the stock market on shaky grown, and the county is in panic mode and fear has gripped the workforce. Fear is a powerful tool and if a company is trying to lower wages then now is that golden opportunity. One mention of a lay-off and the crowd goes wild, or say the company actually lays-off workers to only replace them with those that have been looking for work and willing to work for less. I could go on and on but I fear it may be too late.

report   
Posted by DaRuke on 02/08/2011 at 2:47 PM
Showing 1-14 of 14

Add a comment