The New York Times recently reported that the earnings gap is now the widest since 1928, with the richest 1 percent of Americans having captured most of the economy's 2005 growth, and the bottom 90 percent getting nothing. Between 1979 and 2005, according to MIT professor Thomas Kochan, the productivity of American manufacturing rose by about 70 percent, but the real wages of production workers remained flat.
This economic pummeling of ordinary Americans has many causes, including deregulation of industries that once paid decent wages, the weakening of tacit social compacts in which bosses were ashamed to pay themselves hundreds of times the earnings of workers, the erosion of the minimum wage, and increased off shoring. But one of the big reasons is industry's relentless assault on unions, an attack abetted or tolerated by most U.S. administrations for three decades. Unions not only raise wages for members; they work for a fairer wage structure generally, both in their spillover influence on wider patterns of pay and in their political work for a fairer brand of capitalism.
Supposedly, the "new economy" doesn't lend itself to unions, and most workers no longer want them. But according to the government's Bureau of Labor Statistics, surveys show that 53 percent of U.S. workers would join a union if they could. And recent union growth is mostly in service-sector work -- the essence of the new economy.
In truth, academic studies going back to the work of Richard Freeman and James Medoff document the principal reason unions have declined, from more than 30 percent after World War II to fewer than 8 percent of private sector workers today. It is mainly the result of business making clear that workers who support union drives risk losing their jobs.
Wal-Mart and other anti-union companies take a more direct approach. In the rare case when local employees manage to organize a union, Wal-Mart simply closes the store. Fully 49 percent of employers threaten to move or close the worksite during the course of a union organizing campaign, according to a study by Chirag Mehta and Nik Theodore of the University of Illinois.
Punishing workers who opt for unions is illegal under the 1935 Wagner Act. But the federal government has stopped meaningfully enforcing the Wagner Act's guarantee that employees may form unions free from harassment or retaliation. Generally, fired workers who do win reinstatement orders have to wait for years, and punishments against offending companies are minor slaps on the wrist.
Now the labor movement and its allies in Congress are making an all-out push to put some teeth back in the Wagner Act, with legislation called the Employee Free Choice Act. The main provision would allow a union to be certified once a majority of workers at the factory or office or store signed union cards. The bill also increases penalties for harassing pro-union workers, and makes it harder for employers to stall union recognition or contract negotiations.
Under current rules, a two-stage process requires a majority first to sign cards, followed by a protracted period leading up to an election. It's during this interim phase that employers threaten rank and file workers, and fire their leaders -- sending a powerful signal to other workers not to get cozy with unions.
The bill passed the House March 1 with the support of 243 members, including 13 Republicans. The Senate took it up this week. Republicans have threatened a filibuster, President Bush would veto it if the measure passed, and the U.S. business elite is treating the prospect of a resurgent labor movement as the end of civilization.
Interestingly, as the European Union was celebrating its 50th birthday this past week, the spotlight was on Germany, whose dynamic economy is enjoying an impressive recovery, with plummeting unemployment. The German Federal Republic incurred massive costs when it absorbed the former communist East Germany. Many blamed its slump on strong unions and high wages. But it turns out that this same social model produces the world's most productive workforce. Germany enjoys a large trade surplus despite an expensive currency, and much greater income equality.
Unions as partners can be good not just for worker pay, but for the economy. In our country, unions have never been able to make that case by gentle persuasion. They make it in the old-fashioned way, organizing one worker and one legislator at a time.
Robert Kuttner is co-editor of The American Prospect. A version of this column originally appeared in the Boston Globe.
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