The last couple of weeks we have blogged about the role unions have in the U. S. We began Labor Day week with a historical perspective on workers and how unions helped to shape our country. Last week, we blogged on the moral and economic justification of unions.
This week, we’re continuing with that economic and moral justification by focusing more specifically on income inequality and how it also relates to U. S. democracy.
According to the International Monetary Fund(IMF), income of labor has decreased for the last 15 years by about 3.5% thus helping to create the income inequality problem in the U. S. They cite three reasons for this problem. One of them is the breakdown of labor unions and policies. Labor has also identified the other two reasons IMF cites as concerns of unions. They are trade practices and technological changes. Trade practices hurt U. S. labor markets when production is being done in other countries with an adequate labor supply at less expense so it becomes much cheaper to produce a product in a country other than the U. S. The other problem cited that is helping to create income inequality is the advancement of technology. The IMF says union membership has declined more than 15% since the early 2000s. They believe this has hurt the ability of wages to increase as fewer workers are covered under collective bargaining processes or the bargaining power of unions has diminished. Diminishing bargaining power has meant unions have either had to maintain the same wage with no increases or, in some cases, have been threatened layoffs or closures if wages aren’t reduced. Anti-union legislation at the local or state level has also diminished some of the capability of unions to negotiate better pay for members. Corporations have been much more aggressive in anti-union campaigns. While the IMF responds to the concerns about trade and technology, they say they can’t pinpoint a real cause for the reduced power of unions or the decline in memberships so they have no recommendation on how to improve the situation.
On the other hand, the Economic Policy Institute(EPI) says stagnant wages have started much earlier than what IMF reported. EPI says it started in 1979 and is now extending to those with a college education. EPI says wage inequality has been exacerbated not just through economical means but also because of the lack of legislation which has caused those with greater income to see more gains than those with less income. Like IMF, EPI also believes diminished union power has contributed to the problem. But unlike IMF, EPI has some suggestions to improve the ability of unions to assist with wages. They suggest policy makers need to do more to encourage union membership because when unions win, everybody wins especially for those in lower wage jobs. Unions set the wage standard for entire industries not just organized workplaces. Low-wage occupations see a greater increase with unions which benefits all occupations and narrows wage gaps between low earners and high earners . Had these wages kept pace with productivity levels, the increase to the hourly worker would have increased over 60%.
EPI also says instead of focusing on policies that restrict growth, legislators should focus on policies that help improve the opportunity for union participation. Federal labor laws that are over 70 years old need to be updated to help increase union membership.
For example, this week in California, lawmakers are looking at applying other measures to cap-and-trade policies for automakers in California. In order to receive cap-and-trade incentives, automakers, such as Tesla, must show they are acting in a “fair and responsible” manner to unions. The UAW has been having difficulty with organizing at Tesla because of management efforts. This may help to ease the organizing tension and help with membership gains.
In another example from an op-ed in The New York Times, Benjamin Sachs, a professor from Harvard Law School, suggested separating union activities into two distinct plans. One would be as unions currently function, representing workers through collective bargaining agreements, and the other would be organizing any worker for political purposes only. In other words, he says, workers would not have collective bargaining representation in the workplace but would be organized just for political objectives. A designated location could be established where workers could meet to determine their political objectives. Dues would not be collected other than payroll deductions agreed to by the worker for political expenditures. If the designated location was the workplace, retribution would not be allowed by the employer. This, he wrote, would be better for lower to middle income workers than what is occurring now.
Benjamin Sachs, in his suggestion, said the inability of people to be heard from their government is a failure of democracy. As wage inequality worsens, it breaks down democracy. An article in Psychology Today points out people tend to be less hopeful. Income issues cause hard decisions to be made. For some, it can mean eating or going to a doctor to get well. People become less willing to participate in community and society events such as voting. They feel their vote has little impact on legislative action. This also leads to even more social problems.
Unions, on the other hand, help with the democratic process. They give voice to the needs of working Americans just as they did in the 1800s and 1900s. Not only do they speak up about wage inequality but they provide a mechanism that shows people how a democracy works. As we blogged Labor Day week, Senator Wagner encouraged union membership when he wrote about the Wagner Act. The intent behind it, he wrote, was to give people an opportunity in a democratic process where they could vote on issues that impacted them and vote on the leaders they wanted to represent them. His concern was the political process in the United States was too big and too broad to help people understand it. Unions, he thought, could be a teaching ground. Today, unions see that and members get involved. They volunteer during elections to help maintain a democratic process so American people continue to have a voice on important issues. They also make sure people are able to get out to vote and take them if need be.
Unions aren’t just about raising wages and speaking out on wage inequality. They know and see the problems associated with wage inequality and other social safety net issues that can impact the strength of a country. Unions give the voice that individual Americans can’t always achieve. They talk to legislators and provide the expertise to help shape legislative policy. Unions fight for those less fortunate who may not be a member of a union but because unions are there for them and have been for many years, we as a nation benefit from it. In recent polls from Gallup and Pew Research, almost two-thirds of American people now believe unions are needed. They believe unions can help improve their lives. They believe income can improve and when their income improves so does their daily life and when their daily life improves so does our nation.