How Unions Are Getting Their Groove Back

Yesterday—April 24thwas a red-letter day in the annals of worker mobilization in post-collective-bargaining America. In Chicago, hundreds of fast-food and retail employees who work in the Loop and along the Magnificent Mile called a one-day strike and demonstrated for a raise to $15-an-hour and the right to form a union. At more than 150 Wal-Mart stores across the nation, workers and community activists called on the chain to regularize employees’ work schedules. And under pressure from an AFL-CIO-backed campaign of working-class voters who primarily aren’t union members, the county supervisors of New Mexico’s Bernalillo County voted to raise the local minimum wage.

The Chicago demonstration, which began in the dawn’s early light of 5:30 a.m., included workers at McDonald’s, Dunkin’ Donuts, and Subway, as well as Macy’s, Sears, and Victoria’s Secret, all of whom make the state minimum wage ($8.25) or just slightly more. Roughly one-third of the jobs in Chicago are low-wage, and more than half of the city’s low-wage workers are older than 30. The demonstration was organized by the Workers Organizing Committee of Chicago, which formed to demand a living wage for the city’s retail and fast-food workers.

The “Workers Organizing Committee” is a name with a pedigree. Shortly after the National Labor Relations Act was passed in 1935 and a number of unions broke away from the AFL to organize the factory workers whom the AFL had refused to organize, the Steel Workers Organizing Committee (SWOC) formed to build union support among employees of U.S. Steel, Bethlehem Steel, and the other major companies in the industry. Following the wave of sit-down strikes in auto factories that led to the recognition of the United Auto Workers, the major steel companies signed a contract with the SWOC. The committee later changed its name to the more familiar United Steelworkers.

Just as the steel workers piggy-backed on the auto workers, so Chicago’s low-wage workers are following a course laid out by their counterparts in New York, where hundreds of fast-food workers also staged a one-day strike earlier this month.

Though the Service Employees International Union aided in the New York and Chicago efforts, this is anything but a conventional union-organizing campaign. With collective bargaining in the private sector all but a dead letter—just 6.6 percent of private-sector employees are union members, and the legal obstacles to organizing new members grow steadily steeper—SEIU is one of several major unions shifting their focus to actions that publicize the economic and social costs of ever-growing low-wage employment.

With the backing of the United Food and Commercial Workers, thousands of Wal-Mart employees have formed an association—not a union seeking a contract—that works alongside community activists to pressure the company to make changes such as regularizing workers’ hours. The AFL-CIO is expanding its Working America program, which has successfully mobilized non-union working-class voters to back progressive candidates at election time, to all 50 states. The union is expanding the program's reach beyond the ballot box too, experimenting with projects that would activate Working America members in workplace-related causes and wage-related legislation. Working America has 112,000 members in New Mexico, recruited, as is Working America’s custom, through a door-to-door canvass. It has lobbied successfully for minimum-wage hikes in both Albuquerque and Bernalillo County.

None of these undertakings, at least for now, would result in collective bargaining agreements—the deficient state of workers’ rights under current law make that a bridge too far. But, there are ways these efforts could yield improvements in pay and working conditions nonetheless.

Cities can enact living-wage ordinances for workers in particular industries or in particular locations, as some Los Angeles-area cities have for workers in the hotel industry. States can raise their minimum-wage levels. And while such reforms might prompt, say, a low-wage manufacturer to move to a lower-wage region, they’re not likely to prompt relocations of businesses in the service, retail, or food sectors. Such campaigns have a more immediate benefit too: They organize workers who would likely have no prospect for on-the-job improvements if unions confined their interests to traditional union organizing. At a time when nearly 19 in 20 private-sector workers don’t belong to union, these drives also have the potential to reconnect the nation’s battered labor movement to a multitude of workers they won’t plausibly claim as members for many years, if ever. That’s not easy for unions: They’re committing to spending their members’ dues on campaigns that won’t produce more dues-paying members, at least, not for quite a while. But since the number of conventional organizing campaigns yielding more dues-paying members continues to shrink— and the hurdles to traditional organizing continue to grow—some unions are moving toward a more generalized working-class organizing, completely outside the framework of the National Labor Relations Act. What happened in Chicago, in New Mexico, and at Wal-Marts around the country today looks more like what unions did before the NLRA was enacted, when proto-unions called themselves “organizing committees,” when no one knew what the future of labor relations looked like but when many believed that labor relations in their current state would never produce a just and prosperous economy.


The "black hole theory" of the minimum wage:
Physicists theorize that inside a black hole the laws of physics breakdown. When the minimum wage falls far enough below what the market would bear the laws of supply and demand breakdown. Doubling today's federal minimum wage should lead to a disproportionate explosion of demand for the goods of minimum to median wage paying employers.

If we cut today's minimum to median wages in half that wouldn't help McDonald's or Wal-Mart, would it? This wage cut must already have taken place when we would need to triple today's minimum wage to catch up with doubled productivity since 1968 (almost quadruple the early 2007 minimum wage -- the median wage stagnated as productivity doubled too).

Doubling today's minimum wage to $15 an hour would add 50% to Wal-Mart's wages but only 5% to Wal-Mart's prices – 100% to McDonald's wages but 33% to McDonald's prices. $15 an hour being today's median wage, half the workforce would get raises percentage multiples of pass through price increases.

This win-win effect could not go on forever. At $30,000 a year consumers would buy a lot more fast food and retail items than they will at $15,000 a year – hugely pent-up demand. Going from a $30,000 year minimum wage to $40,000 would raise prices (3% at Wal-Mart; 11% at McDonald's) but not add much to demand – though some people would have more money to spend -- a wash? Somewhere in between is the edge of the black hole.

"Doubling today's minimum wage to $15 an hour would add 50% to Wal-Mart's wages but only 5% to Wal-Mart's prices – 100% to McDonald's wages but 33% to McDonald's prices. "

Wal-Mart's profit is about 3%, and (similarly) McDonald's is far less than 33%. Either they go out of business or they'd learn to do without all that expensive labor.

"At $30,000 a year consumers would buy a lot more fast food and retail items than they will at $15,000 a year – hugely pent-up demand."

My teenager doesn't work full time, and I'd rather have her learn from working min-wage that she doesn't want to work at min-wage.

ddrew2u's post makes some dubious assumptions; Walmart and similar businesses (allegedly due to Obamacare, but I am sure other factors are involved) have almost completely eliminated the full-time job, so even if a $15/hr. minimum wage is foisted upon them, workers will only make $300/wk. because their hours will be cut back. I see restaurant chains are doing the same. My local big box always has a "now hiring" sign up, but cashiers that I know tell me that the personnel managers won't increase an existing associate's hours, forcing them to either get a second part-time job (neither of which will get them insurance), or be on the look-out for a better-paying job.

Unions are dead dead dead and a few little stories aren't going to change that. Unions are a failure that have brought nothing but misery to the American worker, people and economy. They seek to raise their wages to a point beyond what the free market will grant them. The end result is always the same: the bankruptcy of any company that is unionzed as non union companies take advantage of the wage differential.

Unions destroyed the American auto industry. Raised the prices consumers had to pay for cars beyond all reason and then they wanted to be paid to read magazines. The end result is that the Obama-Bush administration bailed them out with taxpayer money so the poor waitress, who already had to pay three thousand more for a car, got a bill in her taxes.

The only ones left are in the government sector but even there, where their political bosses are more interested in votes than economics, their prospects are dismal. Why? Because higher wages have to be paid out of higher wages. When someone can figure out where Illinois is going to get the money to pay their pensions is anybody's guess but it will mean massive cuts in government services and higher taxes to boot. The people will flee and the death spiral will come.

No wonder everyone hates the unions.

I live in Chicago, was in the Loop on Wednesday and had no idea this even happened until this article showed up on RCP (and, if you know what RCP is, you know I am an avid news reader).

Hate to break it to you Harold but there ain't no mojo here.

These comments by me are as stupid as the article . I have a brother-in-law also named Harold . He is in fact a rocket scientist . I'm not making that up. Smart guy , but completely blind to everything important going on around him. Utterly sure of his approach at being a father he missed the trouble his son was in and when he finally opened his eyes his son had dropped out of high school and you can imagine the rest. What is it with these Harold's ? Why do they live in a world of fantasy ? Fast food workers on strike in Chicago is a more indicative trend than falling union membership in Wisconsin ? I'm happy to say my name is Surfdog not Harold

Harold Meyerson is living in a fantasy world. Unions will never be what they once were, when heavy industry and skilled trades were dominate factors in the workforce. Unions are ill-suited to the low skilled, easily replaceable employees in the retail and many service sector market. Besides, as jgower noted above, most of those jobs are part time due to government mandates. With the implementation of Obamacare more of them will become part time.

Looks like union groups are moving away from the strategy of forming and adding new unions and towards bringing in different groups of workers to simply improve overall job quality.

They also seem to be going "Hey, these workers aren't forming a union. They just want to use their position to ask for decent wages and benefits." It's akin to saying "Don't like Pizza? Okay, well how about some baked dough with sauce, cheese, and maybe some pepperoni?" Strangely, that strategy can be effective.

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