Paper 1: Unions in America’s Past and Future

            Employee unions, central players in the ongoing battle between labor and management, figured prominently in workplaces across the United States during the 1940s, ‘50s, and ’60s, but for the past few decades, private sector union membership has declined precipitously. What caused this decline? The reduced role of unions coincides with the demise of the old oligopolistic form of capitalism that allowed large companies to cooperate with other companies of a similar stature to set prices and wages. Over the past few decades, a new form of capitalism, known as “supercapitalism,” has come to dominate American and worldwide economic culture; with this new economy comes more brutal and unchecked competition between companies trying to sell similar products to the same consumer. In order to remain relevant in today’s economy, companies must offer the lowest possible prices; this means an end to sustainable wages and benefits packages for many routine production workers. In our collective attempt to get the best deal, we as consumers have unwittingly sponsored the decline of the unions which advocate for the rights and salaries of the average worker.

            The decline in union membership over the past few decades has resulted in lower wages for routine production workers, contributing to increasing income inequality in the United States. Increasing stratification between the social classes and reduced social mobility have diminished the ranks of the middle class, that all-important feature of modern democracies. Without an educated middle class to choose representatives willing to keep supercapitalism in check, American democracy itself is in danger of becoming corporatized. Thankfully, it doesn’t have to be this way. Unions can, and should, play a larger role in America’s future—as forums where labor and management work together for the benefit of all. Unions can organize workers in the expanding personal service industry, serve as laboratories for developing new ideas to maximize efficiency not conceivable by management, and be used as tools to protect the American worker and boost the middle class amid increasing globalization and competition between companies, nations, and individuals.

            In the past, unions always had a seat at the negotiating table whenever deals between oligopolistic corporations, workers, and the government were struck. This was possible because competition between companies was not encouraged or necessary—giants such as GM controlled the entire means of production and had no need to squeeze the most work possible out of employees while paying them the smallest possible salaries. After the Wagner Act was passed in 1935, unions became an accepted part of capitalism in the United States. Fully 22% of private sector workers and 35% of public workers were unionized in 1978 (Reich, 2007, p. 81). Unions were instrumental in creating standards for fair workplace practices, eliminating intolerably long working hours, and making sure that workplaces are safe and nondiscriminatory. In 1978, unions raised the wages of the average member without a college degree by 8.2% (Economic Policy Institute, 2009). The most important benefit unions brought was reduced income inequality, as demonstrated by data collected by the Economic Policy Institute which shows a correlation between increased union coverage and reduced inequality. Unfortunately, as union coverage has shrunk drastically during the past few decades, so have the benefits that unions bring. Today, less than 10% of private sector employees are unionized (Reich, 2007, p.81). This is a disaster for the American economy and American democracy because data strongly indicate that as unions decline, so does the middle class. A democracy cannot be truly democratic if a tiny minority of its citizens earns more than the rest of the citizens combined.

            Unions have an important role to play in America’s future. While some have argued that unions are incompatible with supercapitalism and that no employer would be willing to negotiate with a union if that meant losing ground to its competitors, that is not entirely true; unions can still succeed at organizing workers if they do so by negotiating with all the important employers in an industry at the same time. Andy Stern, head of the Service Employees International Union, successfully unionized 70% of the janitors in the New Jersey area by “promising employers that that the union contract wouldn’t kick in unless more than half of them signed it” (Bai, 2005, p.42). This effectively neutralized intense economic competition as a threat to unionization. To be successful in the 21st century global economy, however, unions need to expand—Andy Stern’s plan for the future of unions involves the integration of many regional unions into the AFL-CIO, and eventually the formation of a global union linking together service and routine production workers in multiple countries. This would force multi-national corporations to adopt the same fair business practices in every country where they operate, instead of taking advantage of the low rates of unionization in the United States to discourage collective bargaining at their U.S. subsidiaries.

            Another common argument against unions is that they stifle innovation by placing an undue burden on management. When GM and Chrysler recently filed for bankruptcy, many blamed the United Auto Workers, arguing that paying union wages rendered the American automakers uncompetitive with their counterparts in Japan and Germany. This, however, is not the full story. In a supercapitalist economy, innovation is the key to running a successful business, and a lack of innovation by the Big Three automakers was largely responsible for their decline. Instead of using their resources to create the fuel-efficient cars of the future, as Toyota did with the Prius, GM and Chrysler stubbornly continued to manufacture the same gas-guzzling pickup trucks even in the face of sharply rising fuel prices. Unions can play a part in the creative process that occurs in many companies when creating new products or improving old ones. According to Professor Reich (2011), at one company where canned products were manufactured, unionized workers who came into direct contact with the manufacturing process were able to device a new method of affixing labels on cans that was faster and more efficient. Innovation does not need to be limited to CEOs and upper management; it can come from the bottom up, and in many cases, it is the unionized workers who have the most practical experience with the products a company manufactures, enabling them to formulate unique insights about how to make them better.

            Unions can lend political power to hard-working minorities who otherwise would go unrepresented. In one case study comparing the effects of unions in the cities of Los Angeles and Houston, it was found that in Los Angeles, “with great assist from the labor movement, the Latino community has achieved considerable political representation and…helped build a movement for progressive change that has begun to affect the lives of many of its members” (Meyerson, 2004, p. 2). In Houston, where union activity was severely restricted, that was not the case. Giving a voice to the voiceless can prevent them from having to resort to other, more disruptive methods of getting attention. The enfranchisement of immigrant Latino workers in Los Angeles adds a further incentive for them to invest in lives here in the United States, where they will become productive workers in the U.S. economy and receive the political representation and governmental support that they deserve.

            The idea has always been that in the United States, anyone can be successful if they are willing to work hard enough. Regardless of class, ethnicity, or wealth, we in the United States like to believe that a person who is willing to put in the effort to work hard should be rewarded with financial stability. That cherished cornerstone of American democracy, upward mobility, is on the verge of becoming extinct. Supercapitalism and globalization have ushered in an era of intense economic competition that has destroyed the once-flourishing employee unions that used to guarantee decent wages and a path to the middle class for the average worker. In the face of widening income inequality, the United States is faced with a choice: should we as a nation continue down the path toward cheaper prices, regardless of their hidden cost, or should we try to counterbalance the worst side effects of supercapitalism by bringing unions back as a means of once again boosting the middle class? If America is to continue to be renowned for its spirit of equality, unions need to play a greater role in organizing workers in the emerging service economy, giving a voice to the voiceless, and formulating innovative new ideas about how to improve products and services. Unions are the key to ensuring that in the future, both the citizen and the consumer are considered valuable players in American democracy.

 References

Bai, M. (2005). The new boss. New York Times Magazine, 38-71.

Economic Policy Institute. (2009). [Graph illustrating how union coverage decreases inequality]. The State of Working America. Retrieved from http://www.stateofworkingamerica.org/charts/view/124

Goldfield, M. (1997). Race and labor organization in the United States. Monthly Review: An Independent Socialist Magazine, 49(3), 80-98.

Meyerson, H. (2004). A tale of two cities. The American Prospect, Inc.

Reich, R. (2007). Supercapitalism: The transformation of business, democracy, and everyday life. New York, NY: Random House, Inc.