What happens if America loses its unions – The Washington Post


Harold Meyerson

Harold Meyerson

Opinion Writer

What happens if America loses its unions

By Harold Meyerson, Published: June 12

Are American unions history? 

 

In the wake of labor’s defeated effort to recall Wisconsin Gov. Scott Walker (R) last week, both pro- and anti-union pundits have opined that unions are in an all-but-irreversible decline. Privately, a number of my friends and acquaintances in the labor movement have voiced similar sentiments. Most don’t think that decline is irreversible but few have any idea how labor would come back.474

What would America look like without a union movement? That’s not a hard question to answer, because we’re almost at that point. The rate of private-sector unionization has fallen below 7 percent, from a post-World War II high of roughly 40 percent. Already, the economic effects of a union-free America are glaringly apparent: an economically stagnant or downwardly mobile middle class, a steady clawing-back of job-related health and retirement benefits and ever-rising economic inequality.

In the three decades after World War II the United States dominated the global economy, but that’s only one of the two reasons our country became the first to have a middle-class majority. The other is that this was the only time in our history when we had a high degree of unionization. From 1947 through 1972 — the peak years of unionization — productivity increased by 102 percent, and median household income also increased by 102 percent. Thereafter, as the rate of unionization relentlessly fell, a gap opened between the economic benefits flowing from a more productive economy and the incomes of ordinary Americans, so much so that in recent decades, all the gains in productivity — as economists Ian Dew-Becker and Robert Gordon have shown — have gone to the wealthiest 10 percent of Americans. When labor was at its numerical apogee in 1955, the wealthiest 10 percent claimed just 33 percent of the nation’s income. By 2007, with the labor movement greatly diminished, the wealthiest 10 percent claimed 50 percent of the nation’s income.

Today, wages account for the lowest share of both gross domestic product and corporate revenue since World War II ended — and that share continues to shrink. An International Monetary Fund studyreleased in April shows that the portion of GDP going to wages and benefits has declined from 64 percent in 2001 to 58 percent this year. The survey compared the United States with Europe, where the only other nations in which labor’s share declined were Greece, Spain and Ireland — countries whose economies are at death’s door. Our economy is nowhere near so weak, but as Americans’ ability to collectively bargain has waned, so has their power to keep all corporate revenue from going to top executives and shareholders.

When unions are powerful, they boost the incomes of not only their members but also of nonunion workers in their sector or region. Princeton economist Henry Farber has shown that the wages of a nonunion worker in an industry that is 25 percent unionized are 7.5 percent higher because of that unionization. Today, however, few industries have so high a rate of unionization, and a consequence is that unions can no longer win the kinds of wages and benefits they used to.

Deunionization is just one reason Americans’ incomes have declined, of course; globalization has taken its toll as well. But the declining share of pretax income going to wages is chiefly the result of the weakening of unions, which is the main reason American managers now routinely seek to thwart their workers’ attempts to unionize through legally questionable but economically rewarding tactics (rewarding, that is, for the managers).

The weakening of unions has had a huge political effect as well: the realignment of the white working class. Since the ’60s, exit polls have shown that unionized blue-collar whites vote Democratic at a rate 20 to 30 percent higher than their nonunion counterparts. The decline in union membership has weakened Democrats in such heavily white, increasingly deunionized states as West Virginia and Wisconsin — the main reason Republicans such as Walker have sought to reduce labor’s numbers. Liberals who have been indifferent to unions’ decline will find it difficult to enact progressive legislation in their absence.

Understandably, some liberals are searching for ways to arrest the economic decline of the majority of their fellow Americans in a post-union environment. I fear they’re bound to be frustrated. If workers can’t bargain with their employers, it can’t be done. If and when Big Labor dies — it’s on life support now — America’s big middle class dies with it.

 What happens if America loses its unions – The Washington Post.

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  1. #1 by walthe310 on June 13, 2012 - 10:31 AM

    The middle class depends on unions to maintain its health, and democracy depends on a healthy and vibrant middle class. No unions equals no middle class and therefore no democracy.

  2. #2 by Systemic Disorder on June 13, 2012 - 10:46 AM

    What you have said about unions is true. There is no question that the dramatic decline in unions is a huge problem for working people. But it is not the entire picture because the decline in union membership is built on larger factors built into capitalist competition.

    The higher standards of living enjoyed by U.S. working people in the quarter-century after World War II were built on a “Keynesian consensus” and, most importantly, expansion. Much of the world was still an untapped frontier for capitalist expansion, massive rebuilding was necessary in Europe (thus, the Marshall Plan) and with a strong industrial base built up during the war effort and competitors ruined by the war, exports boomed.

    Eventually, Western Europe and Japan rebounded, demand leveled off and competition became much tougher because other countries could produce quality product for their own and export markets. Profitability threatened, the route to maintaining profits is to cut costs — that means wages and benefits. Thus production began to be moved overseas, anti-labor laws were more rigorously applied and, therefore, working people and their unions had much weaker bargaining positions as the power of capital increased through its ability to be mobile.

    These tendencies have only accelerated, and now we have the added burden of massive debts — public debt because corporations and the rich don’t pay their fair share of taxes anymore, and private debt because using the credit card was the only way to maintain a standard of living when wages and benefits decline. I am 100 percent for more union membership and for working people fighting back, but it is not true that we would automatically go back to an imagined “golden era” of the 1950s. There are almost no places left to which to expand and massive indebtedness constrains Keynesian spending programs. The post-World War II boom rested on market expansion and government spending.

    We need much bigger changes than simply increasing union membership, as beneficial as that would be.

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