The American middle class: Brought to you by organized labor

Posted by AzBlueMeanie:

The great American middle class was a post World War II phenomenon and was largely made possible by New Deal legislation that gave workers and organized labor rights that they had fought and died for over many decades.

"[O]ne of the biggest contributions from organized labor that we don't appreciate, because it's so very close to us, is our middle class way of life. In large measure, organized labor's efforts over decades established the American middle class. Decent wages and job security allowed workers to buy homes and cars and send their kids to college, which fueled our economy and what we now so easily disdain as middle class life." Diane Cameron, First Person: The legacy of labor.

As private sector unions have declined in membership since the mid-1970s, so has the economic status of the American middle class.

It is worth taking another look at the history of the rise and fall of the American middle class in relation to organized labor. Here is a well-done summary from Prairie Fire – The Progressive Voice (excerpt):

In 1935, the National Labor Relations Act (NLRA) was enacted over the objections of employers and their allies. It was part of the Roosevelt administration’s recovery package. The NLRA was intended to counteract a long history of hard-core anti-union employer conduct and to create an unfettered employee right to form unions and collectively bargain. It became the official policy of the U.S. “to encourage collective bargaining by protecting the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing.” For the first time, the federal government viewed labor unions as essential to providing for the common good. The right to join a union became a legally recognized human right. It was hoped that employees would be able to form unions with the same ease that companies joined the Chamber of Commerce.

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Consumer spending accounts for a little over two-thirds of our gross domestic product. Today, as in the past, an important cause of our economic downturn is a significant decrease in consumer spending. The NLRA was intended to help put money in the pockets of wage earners. President Franklin Roosevelt described its importance this way: “It is to the real advantage of every producer, every manufacturer, and every merchant to cooperate in the improvement of working conditions because the best customer of American Industry is the well-paid worker.”

The most widely understood aspect of labor unions is their collective bargaining function. Collective bargaining is understood as the primary way by which employees achieve economic self-sufficiency. But collective bargaining does more than improve a union member’s wages; it also betters fringe benefits and working conditions.

What isn’t appreciated is that collective bargaining has a “spillover” effect for nonunion employees as well. When union density in an industry or geographic area is high, nonunion companies, who want to attract and retain qualified employees, have to match the wages and benefits found in similar union workplaces. Unlike soaring CEO pay, when union members negotiate improvements in wages and fringe benefits, it often triggers improvements for other nonunion employees of the same employer as well.

A union spillover effect also applies to workplace rights. Unions play an important role in supporting workplace legislation that extends rights not merely to union members but to all employees. Here’s a short list of union-supported legislation: the Fair Labor Standards Act, the Equal Pay Act, the Civil Rights Act, the Occupational Safety and Health Act, the Age Discrimination in Employment Act and the Family Medical Leave Act.

During a remarkable period from the late 1940s to the mid-1970s, when union density was over 25 percent [peaked around 36%], unions achieved the ability to negotiate one-for-one wage increases that were tied to increased worker productivity. As a result, the American labor movement was able to insure that our nation’s economic growth was broadly shared by all the workers who made it possible. This shared prosperity was an important factor in expanding the middle class.

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According to Ellen Dannin, of Penn State’s Dickenson School of Law and a former NLRB attorney, the NLRA has been so amended over the years that its been robbed of its original intent to let employees freely decide to form unions and collectively bargain.

Partially as a result of a weakened law, union density has declined during both Democratic and Republican administrations. In the mid- to late 1970s, union density declined to a point where the link between increasing productivity and wages was lost. With it broken, the increasing profits made possible by the most productive workforce on earth were no longer equitably shared. A resulting loss in purchasing power and a disappearing middle class were the direct results of reduced union density. Ben Bernanke, head of the Federal Reserve, directly tied increasing economic disparity to declining union density in a February 2007 speech before the Greater Omaha Chamber of Commerce.

With decreasing unionization comes a fading American Dream, declining social mobility and increasing family indebtedness. The average American is working longer hours for less income than 30 years ago. It’s no wonder that a November 2008 survey by Lake Research Partners revealed that 84 percent of Americans believe our economy is going in the wrong direction. The majority of Americans understand that they are one paycheck (or serious medical emergency) away from disaster.

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The primary reason that so many employees want but cannot attain a union in their workplace is that the NLRA is seriously broken. The legal right to form a union is no longer perceived to be a safe option for workers. Employees today are afraid that by supporting unions they are putting their jobs and the welfare of their families at risk. Union advocates argue that the law originally intended to promote employee rights has become a barrier to expressing those rights.

In addition to weakened labor law, the biggest factor in helping companies keep union density low is the growing union-avoid­ance industry. Many firms specializing in labor relations are now helping clients remain “union-free.” Consultants are more than willing to help companies become “proactive” in keeping unions out. With the help of consultants, companies educate em­ployees about their “union-free” status beginning in orientation and followed with regular up­dates throughout their employment. Union-avoidance seminars are advertised on the Web and regularly held all across the nation. Employers who aren’t proactive will be sought out by consultants as soon as a petition for a union election is filed with the NLRB.

And of course, the corporate media plays its role in advancing this anti-union bias. And it's not just right-wing hate radio and FAUX News Fraudcasting. It is the "lamestream media" (as sister Sarah would say) which is just as shamelessly guilty. The key here is "corporate."

As for the current dispute over public sector unions, particularly "the rising" in Wisconsin, the right-wing media has been laying the predicate for this fight for the past year by claiming that public sector workers are paid more than their private sector counterparts to suggest that they are "overpaid" and "pampered." (In reality, right-wing media is arguing for a race to the bottom in declining wages and benefits). Like everything else you hear from right-wing media, it is "big lie" propaganda.

As Ezra Klein explains in Are Wisconsin's state and local workers overpaid?:

"Republicans say that public-sector employees have become a privileged class that overburdened taxpayers," write Karen Tumulty and Brady Dennis. The question, of course, is whether it's true. Consider this analysis the Economic Policy Institute conducted comparing total compensation — that is to say, wages and health-care benefits and pensions — among public and private workers in Wisconsin. To get an apples-to-apples comparison, the study's author controlled for experience, organizational size, gender, race, ethnicity, citizenship and disability, and then sorted the results by education. Here's what he got:

 

If you prefer it in non-graph form: "Wisconsin public-sector workers face an annual compensation penalty of 11%. Adjusting for the slightly fewer hours worked per week on average, these public workers still face a compensation penalty of 5% for choosing to work in the public sector."

The deal that unions, state government and — by extension — state residents have made to defer the compensation of public employees was a bad deal — but it was a bad deal for the public employees, not for the state government. State and local governments were able to hire better workers now by promising higher pay later. They essentially hired on an installment plan. And now they might not follow through on it. The ones who got played here are the public employees, not the residents of the various states. The residents of the various states, when all is said and done, will probably have gotten the work at a steep discount. They'll force a renegotiation of the contracts and blame overprivileged (sic) public employees for resisting shared sacrifice.

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State and local budgets are in bad shape. They'll need deep reforms across a variety of categories, from tax increases to service cuts to changes to employee compensation. But the focus on public employees — and the accompanying narrative that they're greedy and overcompensated — obscures a lot of that: It makes it seem as if the decisions that have to be made are easy and costless and can be shunted onto an interest group that some of us, at least, don't like. It's the Republican version of when liberals suggest we can balance the budget simply by increasing taxes on the rich. But it's not true.

If you want to restore the balance of economic power to the American middle class, you must support the rights of workers and organized labor vis-à-vis the über-rich of the corporatocracy. The über-rich should be the target of public ire, not public sector employees who teach your children, pick up your trash and clean your streets, protect you from criminals and fight fires, just to name a few public servants. They are your family members, friends and neighbors. They work hard for their paychecks, they are taxpayers, and they are voters, too. They are the American middle class.