Strong Unions = Strong Economy
The key component to the repugs' three-decade War on the Middle Class is the destruction of unions.
It's no coincidence that the strongest middle-class economy in American history co-existed with the strongest union membership. From World War II to the late seventies, more than a third of workers in the U.S. belonged to a union. That membership assured them the decent wage and benefits that allowed one salary to support a family in middle-class comfort: a house and yard in the suburbs, two cars, nice vacations, college education for 2.5 kids.
But an economy that expands the middle class contracts the rich. Corporate CEOs were only 10 or 20 times richer than their workers, instead of 100 or 1,000 times richer as they became after the repugs broke the back of unions.
Last week, President Obama took several long strides toward restoring a union-strong economy.
President Barack Obama signed a series of executive orders Friday that he said should "level the playing field" for labor unions in their struggles with management.
Obama also used the occasion at the White House to announce formally a new White House task force on the problems of middle-class Americans. He named Vice President Joe Biden as its chairman.
Union officials say the new orders by Obama will undo Bush administration policies that favored employers over workers.
SNIP
At the signing ceremony today, Obama said, "I do not view the labor movement as part of the problem. To me, it's part of the solution. You cannot have a strong middle class without a strong labor movement."
And to drive that point home, Teamsters President James Hoffa told reporters after the ceremony, "It's a new day for workers. We finally have a White House that is dedicated to working with us to rebuild our middle class. Hope for the American Dream is being restored."
If you need more ammunition to refute the union-bashers, former Labor Secretary Robert Reich at TPMCafe explains Why We Need Stronger Unions and How to Get Them.
Why is this recession so deep, and what can be done to reverse it?
Hint: Go back about 50 years, when America's middle class was expanding and the economy was soaring. Paychecks were big enough to allow us to buy all the goods and services we produced. It was a virtuous circle. Good pay meant more purchases, and more purchases meant more jobs.
At the center of this virtuous circle were unions.
SNIP
The way to get the economy back on track is to boost the purchasing power of the middle class. One major way to do this is to expand the percentage of working Americans in unions. Tax rebates won't work because they don't permanently raise wages. Most families used the rebate last year to pay off debt -- not a bad thing, but it doesn't keep the virtuous circle running. Bank bailouts won't work either. Businesses won't borrow to expand without consumers to buy their goods and services. And Americans themselves can't borrow when they're losing their jobs and their incomes are dropping.
Tax cuts for working families, as President Obama intends, can do more to help because they extend over time. But only higher wages and benefits for the middle class will have a lasting effect.
Unions matter in this equation. According to the Department of Labor, workers in unions earn 30% higher wages -- taking home $863 a week, compared with $663 for the typical nonunion worker -- and are 59% more likely to have employer-provided health insurance than their nonunion counterparts.
SNIP
Although America and its economy need unions, it's become nearly impossible for employees to form one. The Hart poll I cited tells us that 57 million workers would want to be in a union if they could have one. But those who try to form a union, according to researchers at MIT, have only about a 1 in 5 chance of successfully doing so.
The reason? Most of the time, employees who want to form a union are threatened and intimidated by their employers. And all too often, if they don't heed the warnings, they're fired, even though that's illegal. I saw this when I was secretary of Labor over a decade ago. We tried to penalize employers that broke the law, but the fines are minuscule. Too many employers consider them a cost of doing business.
This isn't right. The most important feature of the Employee Free Choice Act, which will be considered by the just-seated 111th Congress, toughens penalties against companies that violate their workers' rights. The sooner it's enacted, the better -- for U.S. workers and for the U.S. economy.
The American middle class isn't looking for a bailout or a handout. Most people just want a chance to share in the success of the companies they help to prosper. Making it easier for all Americans to form unions would give the middle class the bargaining power it needs for better wages and benefits. And a strong and prosperous middle class is necessary if our economy is to succeed.
Read the whole thing.
Cross-posted at BlueGrassRoots.
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8 comments:
That's called false-cause fallacy.
Assuming the economy was stronger back then (I'm not sure how'd you measure that), it's only correlation. You might as well connect it to the decline of the family or education-- or the increase in public sector unions-- than the decline of (private) sector unions.
In terms of theories and concepts, why would one expect cartels in labor markets to be good for the economy and the nation-- rather than just those who are members of those cartels? (Is OPEC good for the world economy?)
Yellow Dog, you are right on the money with this piece, and Mr. Schansberg completely misses the point, is a business owner himself, an ardent supporter of laissez-faire "crapitalism", or is living in another world. Strong union presence exerts pressure on all sectors to pay higher wages and provide better benefits for the public at large. It indeed made for a higher standard of living for most of the population back before Reagan and the Bushes all but destroyed union influence. It also definitely kept executive pay more in line. The notion that business owners and corporations should be allowed to set their own prices, hold down workers' wages, and effectively create their own narrow, excessively wealthy and pamopered elite is the REAL fallacy here! All this talk about how "the market will take care of itself" is a big load of mullarkey, too---the "free" market has always been manipulated by a greedy and highly irresponsible few for their own benefit. Unions and government regulation are absolutely essential to protect the vast majority of the population (workers) from the excesses of concentrated capital. With strong unions and government oversight, we come closer to achieving true economic democracy. Without unions and government oversight, we have Reagan/Bush-style near economic dictatorship by the wealthy. Unions are not perfect. Their corruption has also led to their downfall. But though imperfect, they are totally vital. As Star Trek's celebrated Mr. Spock once put it so eloquently: "The needs of the many far outweigh the wants of the few." I couldn't possibly agree more. Hats off to you, Yellow Dog, AND President Obama for your pro-union stands and common sense!
You forgot to mention that unions cured the common cold and cause the dead to walk again. ;-)
OPEC has been able to keep oil prices higher, allowing other energy producers to charge higher prices-- and increasing prices throughout the economy. Go OPEC!
You can certainly give Reagan credit/blame for limiting unions-- through standing up to the air traffic controllers in their strike.
But equating him with either Bush makes no sense-- on unions or much at all in terms of economics. On economics, Bush I has a lot more in common with Clinton. And from what we've seen so far, Bush II will have a lot more in common with Obama.
Mr. Schansberg, your sarcastic opening remark was completely unnecessary and not at all relevant, sir. At no point did I suggest that labor unions create miraculous and universally beneficial results for all mankind. However, their influence DOES raise wages and improve working conditions and benefits for a much wider scale of workers than just their own mwembership. Perhaps you have been blessed with a cushy, high-paying job your entire adult life, and have never had to live from paycheck to paycheck, or without adequate insurance. If that is the case, I am happy for you, but you kave been in a small minority and are then being very myopic in your outlook as it applies to the overall public. Your comparison of labor unions to OPEC is not even close to accurate. OPEC's practices benefit almost exclusively a handful of wealthy elite or their governments. With rare exception do they reach out to the broad working public in their respective countries. OPEC's influence is a largely NEGATIVE one, as the end result of their actions hirts the majority of people worldwide. Reagan's anti-union actions encouraged union-busting all across the country. Bush I let this process continue unabated; Clinton did little to strengthen unions; and Bush II's support for exporting American jobs to cheap foreign labor markets (aka "free" trade), as well as his support for, and inaction concerning, illegal immigration are VERY much akin to Reagan's union-busting. So your assertion that Reagan and Bush II have little in common is totally unfounded, in that regard.
Bush II and Reagan (and, to a lesser degree, Clinton) all believed that government regulation of the marketplace should be minimal, and that the market would police and cleanse itself. That, my friend, is an utterly ridiculous supposition and the events of the past few months illustrate that better than anything. The proof is abundant, in the outrageously inflated CEO salaries we see today and the fact that the overwhelming majority of American workers' REAL disposable income has not risen appreciably in decades, not to mention the collapse of our mortgage and banking industries. The gap in income between richest and poorest is now at its widest since the 1920s. This is not progress, and is not at all healthy. It is totally unjustifiable and indefensible. The laissez-faire mentality has produced disastrous excesses beneficial to only a few. The poor and middle class have suffered needlessly as a result. Jesus Himself said countless times to look after and care for the poor and sick. He NEVER advised giving huge financial advantages to the rich or suggested laissez-faire regarding economics. So, in effect, "free market" capitalism as practiced today is almost a rebuke of Christianity itself. If your beliefs are to the contrary, I congratulate you on the economic comfort you are currently enjoying. But I, and the overwhelmingly huge majority of workers, will correctly never accept your position. Further, the majority of voters will never elect a majority that believes as you apparently do. Good night, and God bless you, sir.
Jack,
God bless you too!
The opening was not a sarcastic remark, but a joke. (Note the smiley face!) You did attribute remarkable-- if not miraculous-- powers to unions (even if it it were true). So, I was having some fun with that.
I doubt that you know anything about my career. In any case, it is not relevant to our discussion.
What is a cartel? (Try to come up with a definition before reading on.) It is a collusion among suppliers of a product or service. OPEC is a group of nations who supply oil. Unions are groups of workers who supply labor services. Cartels are great for the suppliers and tough on the consumers of their goods and services. So, BY DEFINITION, unions and OPEC are similar.
As to effect, I can agree with you that a cartel of middle-class and upper-middle-class individuals is not as troubling or powerful as a cartel of nations. But unions do take things one step further by advocating all sorts of legislation that impose costs on specific groups of workers and on society.
You seem to agree with me on my assessment of unions and presidents-- although you seem to want to spin the comments about Clinton in a positive manner and about Bush in a negative manner. (I have no axe to grind here; I'd probably be willing to say that Clinton was the best of the three-- at least when he had a relatively conservative Congress.)
As for the other comparisons you made:
-Clinton played a key role in NAFTA, so there's no reason to distinguish them there.
-The gap in income has increased under all four. (Interestingly, the gap between men and women closed most during Reagan's years. For those who like to attribute blame and credit to presidents for such things, you'd think they'd give the Gipper a high five for that!)
-Of the four, only Reagan tried to do anything about illegal immigration (in 1986)-- and that, to little effect.
-And your claims about Bush II and regulation are simply and dramatically wrong. [I have blogged on this-- e.g., see: Bush's heavy (regulatory) hand on 12/10/08 at http://schansblog.blogspot.com/2008/12/bushs-heavy-regulatory-hand.html.]
I'm sorry if you've believed Bush II's rhetoric or partisan attacks against him that he was a small govt president; he increased spending and regulation more than any president since at least LBJ. Brutal...
In the U.S., we have neither laissez-faire nor a system of free-market capitalism. In addition to capitalism, our economy has a healthy dose (or is it an unhealthy dose) of socialism and mercantilism (special interests).
In closing, I'm glad to see you paraphrasing the teachings of Jesus Christ. I hope you have embraced the grace of God and are active in a local church. And if you're interested, I have a book on Christianity and politics! ;-)
Enjoy! eric
I misspoke on efforts with respect to illegal immigration: Bush II also tried to do something about it, but his methods and goals were considerably more liberal than the other three. Clinton and Bush I largely or completely ignored the issue.
Eric,
Once more I must disagree with you. Bush II did virtually nothing to stem the tide of illegal immigration, unless you consider his very reluctant and half-hearted attempt to build a wall on our southern border a massively valiant effort to stem the tide, which it most certainly was not.
As for the assertion that unions and OPEC are si milar, that is so only in the very narrow sense of the definition you portray. The fact remains that strong union presence has always led to higher wages and better conditions and benefits in non-union shops. Until Reagan's union-busting occurred, non-uniuon shops always attempted to emulate the union ones, in an effort to keep the unions out. But since early in the Reagan era, that has no longer been the case, and, in fact, benefits have continually been eroded and wage levels have even been rolled back. Strong union presence would never have permitted the massive export of American jobs or the freezing or lowering of American workers' wages that has accelerated immensely during, and with the outspoken blessing of, the Bush II squad.
We do not presently have a laissez-faire style of capitalism being practiced here (thank GOD!), but during the past 10 years or so (including the last years of the Clinton era), we came perilously close. Mercantilism has been rampant in that time frame, ESPECIALLY during Bush II's presidency. Regulators no longer regulated or acted as safeguards acting on behalf of the public at large. Bush selected captains of specific industries to "regulate" their own industries, with full approval of the overwhelmingly conservative GOP congresses he enjoyed. This amounted to letting the thieves run the bank, and they behaved accordingly.
Most libertarians and free-traders would disagree, but the idea we are a heavily socialist country is preposterous. Yes, the state did FINALLY step in with the massive bailout and require some accountability. And yes, we do have social security and unemployment, as well as welfare benefits, Medicare, and so on, but the degree to which the state is involved and has control is but a fraction of what is found in Europe or in other spots around the globe. Libertarians and free traders simply want little or NO government involvement, and history has proven in the 1920s as well as in recent years that this is a foolhardy course to follow.
Private industry, (particularly cancerous large corporations), has become all-consuming and almost wholly self-serving. The object has become freezing or lowering wages wherever possible so that a tiny elite of CEOs and board members can become massively wealthy. By following this methodology, this narrow band of self-centered elites is exploiting not only its workers, but its shareholders and even the government itself. This cannot be allowed to stand. Union resurgence and increased government oversight are the only checks against this excess. President Obama has made a clear statement that one of his major aims is to make government not bigger but more efficient and effective, and to attempt to restore the earning power of most Americans. By definition, this means a contraction of excessive elitist compensation. I have seen no such pronouncement emanating from Wall Street or the captains of industry themselves. For these reasons, Obama's presidency will most definitely NOT be like Bush II's. Instead, Obama will, if successful, be saving capitalism from its own excesses through progressive reform, similar to what FDR did in the 1930s. This means tighter regulation, in the tradition of Teddy Roosevelt AND FDR, and increased power for labor, which is long overdue.
It would appear we have agreed to disagree.
I think we agree on Bush II and illegal immigration (from my follow-up post).
I agree that Reagan's stand was an important piece of the decline of unions (which has been occurring since the 1950s). An even larger (and overlooked) piece: the deregulation of transport and communications industries under Carter and Reagan. The increased competition there and elsewhere makes it increasingly difficult for unions to survive.
Capitalism is unrelated to socialism and mercantilism. The latter has a very old tradition in American history and is not at all recent. Regulation by insiders is common and to some extent, unavoidable. (The people that have the requisite knowledge are likely to bring some related bias to the table.)
There are lots of great reasons to criticize Bush II. But I don't see how one can make any case that he's markedly different on these sorts of things overall.
I didn't say "heavily socialist"; I said a significant dose. Aside from the various aspects of "the welfare state", one can look to elementary and secondary education to start that discussion.
The closest we've come to Libertarian would be pre-20th century. In any case, the comparison is always between markets and govt. Whatever the 20s might teach us, any student of economics knows what the 30s teach us about the limits of effective government policy.
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