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Over the past several decades, income growth for most American families has been weak or non-existent. Between 1979 and 2007, incomes for the top 1 percent of households grew more than the bottom 90 percent. Incomes for the top 1 percent grew 241 percent compared to just 11 percent for the bottom fifth and 19 percent for the middle fifth.
This month’s cover story in the American Prospect by Harold Meyerson makes a compelling case that one of the main causes of the stagnant economic fortunes of working families and growing economic inequality is the weakened state of American labor unions. From a peak of one in three workers in the early 1950s, union membership has now shrunk to just 11.8 percent of American workers, and only 6.9 percent of workers in the private sector. In Oklahoma, just 6.4 percent of workers are unionized.
Meyerson shows how the union movement at its peak during the years following World War II through the mid-1970s was able to boost wages and incomes, not only of their members but of non-unionized workers as well. The hotel industry provides a telling example of the difference made by strong union density:
In cities where nearly all the class-A hotels are unionized, as they are in New York and San Francisco, housekeepers make more than $20 an hour. In cities where roughly half of such hotels are unionized, such as Los Angeles, their hourly wage is about $15. In cities where all the hotels are nonunion, such as Phoenix, housekeepers make little more than the minimum wage, if that.
Meyerson offers a rich account of the many factors contributing to the decline of American unions. Globalization, and the ability of businesses to shift manufacturing production and jobs overseas, plays a role but isn’t the sole or primary cause. “Only where corporations have been free to structure globalization to their workers’ disadvantage – that is, in the United States – has it led to massive union decline,” he writes. In Meyerson’s view, growing employer opposition to unions, backed by public policy, has been pivotal. Employers have benefited from right-to-work laws that the federal government allowed states to adopt when Congress passed the Taft-Hartley Act in 1947, and weaknesses in the National Labor Relations Act that allowed employers to stymie union organizing efforts.
The result has been a great shift in economic power from the unionized industrial Northeast (think Detroit) to the non-unionized South and Southwest (think Bentonville) that’s had profound effects on worker pay and influence. Meyerson writes:
In the years following World War II, leading American businesses believed in or were resigned to Fordism, the doctrine that calls for compensating workers well enough that they can consume well enough, too. It took its name from Henry Ford’s 1913 decision to pay his workers an unheard-of $5 a day so they could afford to buy the cars they were making, although it actually required the great unionization campaigns of the 1930s and 1940s to raise workers’ incomes to the point where they could make such purchases.
But as the Sunbelt grew, the nonunion South gave birth to a harsher economic order. Wal-Mart replaced General Motors as America’s largest private-sector employer. Instead of paying its workers enough to buy new cars, Wal-Mart paid its workers so little they had to shop at discount stores like Wal-Mart. Founded in 1962, the company grew to the point that it could compel—on penalty of exclusion from its shelves—the companies that made and transported the goods it sold to slash their own costs, which invariably meant their workers’ wages went down as well. It was a system as all-encompassing as Fordism, but it was Fordism in reverse.
There are many other culprits in Meyerson’s account of labor’s decline, including American liberals, who, in turning their “attention and moral energy to the battles for equal rights” for women and minorities, cased to address the problem of the economic and political concentration of power in a capitalist system; and the unions themselves, that took their post-war gains for granted and neglected the hard work of organizing workers in the emerging service economy.
The article is very compelling in laying out the consequences of a shriveled labor movement, not only for the economic fortunes of workers and their families but for progressive politics and the broader movement for social justice in America. “If unions fold,” Meyerson warns, “liberal America will not merely be weakened. It will be crippled.” Meyerson is less compelling, however, in offering solutions to reverse unions’ slide. He says it is worth considering abandoning efforts to reform labor laws at the national level and focus instead on the states – but acknowledges that very few states have labor movements strong enough to pass pro-union legislation. He also urges unions to engage in broader movements for economic justice – but recognizes that a large-scale community organizing effort launched by the SEIU has proven largely unsuccessful.
With so few workers left in unions, especially in a place like Oklahoma, it’s easy to overlook their vital role in ensuring broad-based prosperity. But Harold Meyerson provides an important reminder that if we want to understand why, even with a growing economy, one in three jobs in Oklahoma pays below the poverty level and two in five of our working families are low-income, the weak state of the union movement is of central importance.
