intervention read at the panel on labor movement: past, present, and the future

skidmore college | april 5, 2006

yahya m. madra

 

 

Table 1

 

Percentage of wage and salary workers who are members of union

1983

20.1 %

1997

14.1 %

2005

12.5 %

Source: U.S. Bureau of Labor Statistics.

Today, I will try to make sense of two facts about the state of labor movement and labor in the US economy.  First piece of fact pertains to the dramatic fall in unionization rate in the U. S. labor force in the second half of the Twentieth Century (see table 1).  In a sense, this secular decline in unionization rate already tells us a lot about the state of the labor movement in the U.S.  In passing, let me note that while the unionization rate for public employees is at 36.5 percent, the rate for private industry workers is at 7.8 percent!

Table 2

 

US Labor Productivity and Wages, 1973-96

Growth rate of labor productivity:

26.4%

Growth rate of real hourly wages:

1.8%

Source: Mishel, Bernstein and Schmitt (1999, 123); cf. Wolff (2002).

 

The second set of facts pertains to the increasing labor productivity and not so increasing real wages (see table 2).  This is more of a result, an outcome of, among other factors, the decline in the union membership.  The assumption here is that the growth in real wages should be approximately in step with the growth in labor productivity.

Let me now try to make sense of these facts.  The question that needs to be answered is the following one: What factors have led the U.S. labor movement into this steady decline? It is, without doubt, practically impossible to give a comprehensive answer, let us try to recall few historical events.  In doing so, I am going to mention the factors that I deem important.  Others are most welcome to add factors that I have decided to omit or failed to remember.

 

The composition of NLRB.  The 1935 Wagner Act (passed by the Congress during the Great Depression as many other acts that made the Federal Government what it is (or was)) established the National Labor Relations Board.  NLRB is very important for unionization because it is the entity that adjudicates the conflicts between workers and companies.  For instance, if a company wants to block a group of workers from unionizing, the workers can go to NLRB.  In this sense, the composition of the five-member NLRB is crucial for new unions that would like to be certified and for old unions that are threatened by decertification!

 

Hostile legal context. Right after the WW2, in 1947, the Congress the amended the Wagner Act.  The amendments, known as the Taft-Hartley Act, curtailed the power of unions dramatically.  First, motivated by the fear of a country-wide strike fueled by a communist infiltration, the Act gave the President of the U.S., when “national welfare” was at stake, the right to intervene and force workers to return to work.  Second, it outlawed close shops and gave the authority to the individual states to outlaw union shops (according to which workers have to join to union after they are hired) and pass “right-to-work” laws.  The “right-to-work” or “work-for-less” laws made it possible for workers to reap the benefits of union contracts even if they don’t join the unions.

 

The corporate response to the profit squeeze. In the aftermath of the first Oil Shock of 1974, with the rising gas prices, one thing was clear for American Suburbia. If they were going to continue driving back and forth to the workplace and to the marketplace, then they needed more fuel efficient cars.  North American car industry was far from ready for this.  As consumer began buying foreign cars, the sales of clunky American cars went down.  This, however, was not an isolated incident.  In the late 1970s the profits of the entire corporate America got squeezed between rising energy costs and falling sales.  There were two solutions.  Both solutions involved passing the buck, the responsibility—first to the government and then to the workers.  The first meant that the corporations began campaigning for corporate tax cuts.  The second big idea was to demand wage cuts from workers.  If American industry was not competitive enough the workers must be responsible for this.  For whatever reason, in the Reagan years, with the rise of neoliberalism, the corporate America has successfully sold this ridiculous idea to the U.S. public.

 

Growing work force. In the 1950s and 1960s, it was enough for one spouse to earn a wage to sustain the livelihood of a family—perhaps I should add a white family.  With the falling real wages, the American family came under serious pecuniary strain.  In response, families began to borrow more and to work more hours.  Today, both spouses have to work to sustain the family.  Of course, being indebted and being forced to work longer hours are easily a strain on even the healthiest of families.  Imagine what this means for single parents.  [In contrast to the religious right who is accusing feminism and the decline of family values as the two culprits of rising divorce rate in the US, one is tempted to argue that the reason is the declining union power.]  An important consequence of this development is the growing work force and increasing competition among workers for less and less number of jobs.

 

The threat of job loss.  In the US, compared to Europe, unemployment rates have been historically very low.  But this does not mean that the there is not a strong threat of job loss.  In the US, there are two types of jobs, on the one hand, high paying full time jobs with good benefits and on the other hand, low paying jobs with no or minimal benefits.  In other words, very roughly speaking, there is a two-tiered labor market.  With the roll-back of the welfare state (a consequence of the corporate tax cuts mentioned earlier) and the erosion of unemployment benefit, the threat of job loss, or the loss of a good job meant that workers will be less inclined to risk their jobs by trying to unionize and demanding higher wages, and more inclined to work harder.

 

Globalization.  There are two main ways in which globalization effects the labor movement in the US.  On the one hand, there is “outsourcing”.  The factories are being closed down in what used to be called the Iron Belt and moving either to the Southern states with “right-the-work” laws or to the global South, to the “free trade zones” of the Third World where workers work in sweat-shop conditions.  In other words, as the workers of the North are losing their jobs, the workers of the South are getting them—and as many esteemed economists would argue, “the workers of the South should be thankful for the opportunity bestowed upon them.”  On the other hand, however, there is the “Walmart-effect”.  Even though the real wages have been more or less stagnant for the last three decades, working people of the global North can now afford more “stuff”.  While it is undoubtedly of inferior quality, the merchandise produced in China is definitely cheaper.  In other words, even though the real wages remained the same, the standard of living has increased for the working people of the North.  But the expense of who?

 

In a nutshell, these are the some of the factors that may help us make sense of the current state of the labor movement in the U.S.  Let me leave you with two questions: How does or should the North American labor movement situate itself in relation to the global labor movement? How will the rise of global labor movement (in Europe, in South East Asia, in Latin America) effect the North American labor movement?

 

References

Mishel, L., J. Bernstein, and J. Schmitt. 1999. The State of Working America, 1998-1999. Ithaca: Cornell University Press.

Wolff, R. 2002. “The U.S. Economic Crisis: A Marxian Approach.” Rethinking Marxism 14(1), pp. 118-131.

 

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