There is great hand-wringing in the United States about stagnant living standards and rising inequality. But despite this growing concern, too many liberals are reluctant to embrace the best proven agent of greater earnings equality—strong labor unions. Many well-meaning liberals point to global competition as the cause of widening gaps between semiskilled and knowledge workers, creating income disparity and stagnant living standards. According to their formula, education and retraining are the remedy for this increasing inequality.
Yet this solution allows American business to rationalize low wages and widening inequality as merely a necessary response to global competition. The education solution avoids the profoundly political question of how profits from productivity gains should be shared with workers. Here again, unions are a necessary agent of change.
The globalization argument also has the effect of paralyzing workers who are continually bombarded with the message that they are powerless against lower, worldwide labor costs. If they push for higher wages, they lose their jobs. If they do not, they continue to watch their wages stagnate.
This global economy, however, is not the primary culprit of stagnant living standards and rising inequality. It is true that the continued opening of our borders has eliminated jobs and depressed wages of American workers in industries in which the products compete globally, such as textiles, shoes, data input, cars, and steel. Even high-skilled workers, such as computer design engineers, have lost their jobs as new communication technologies bridge the continents. But even in industries competing globally, the global competition rationale for reducing American workers' wages does not stand up to close scrutiny. In many industries, Business Week recently reported, Third World per-unit labor costs are close to American levels because of low Third World productivity.
Yet as devastating as globalization has been in some sectors, these jobs account for only a minority of today's workers. Most jobs today do not compete globally. As seen in recent figures compiled by the Bureau of Labor Statistics, one could conservatively estimate that three-fourths of the private-sector jobs in the United States are not subject to global competition. [See table.]
|Transportation & Public Utilities||5.18|
|Finance, Insurance, & Real Estate||5.04|
Putting the entire goods manufacturing sector into the global marketplace and adding all of the finance sector still leaves 77.5 percent of the jobs in the U.S. out of the reach of global competition. Not only is this non-global sector of the economy the largest, it is the fastest growing. From 1972 to 1993, service jobs more than doubled in number while manufacturing jobs dropped 10 percent. This growth is projected to continue. Most new jobs today are in the lower-wage service sector-checking out groceries, waiting on tables, servicing office equipment, caring for the sick, and cleaning up for the rest of us. Wal-Mart is the largest creator of jobs in the United States—not Intel, not Boeing, not Microsoft. Between 1987 and 1995, Wal-Mart created a staggering 481,000 jobs; today, it has 622,000 full- and part-time employees.
Ignoring this reality, many liberals have embraced reskilling workers as the sufficient solution to the declining living standards of American workers. The reskilling argument contends that for workers to compete in the global market and increase their incomes, they must be retrained for "high-tech, high-skill" jobs. But there is growing evidence that with the exception of advanced degrees, education does not have the return on investment it historically had. We obviously need improvement in education and skills to prepare workers for jobs in higher-skilled areas. However, the real education gap is at the lowest end of the labor market, requiring the basic skills of reading, writing, and arithmetic. The declining standard of living for a majority of workers in the United States will not improve by sending workers back for more training. An active and powerful labor movement is the mechanism that can bring workers livable wages, as it did for an earlier generation of workers.
UNIONS AND INCOME DISPARITY
Historically, only a strong labor movement successfully confronted the power of corporations. Mobilized workers, through strong unions, forced business to share their profits with their employees and, in turn, created a middle class in the United States. Just as in the current low-wage service sector, the manufacturing industries began as low-wage industries. As Alan Brinkley relates in his excellent The End of Reform: New Deal Liberalism in Recession and War, unionization and worker action created livable incomes and brought millions of workers into the middle class during and after World War II.
At the height of union representation in the mid-1940s, when 40 percent of the private-sector workforce was covered by collective bargaining agreements, wages rose dramatically; this created the most equal distribution of income in the twentieth century. It was not only unionized employees who were affected by unions, but the entire industrial sector, in which unions had a significant presence. Nonunion employers were forced to push up wages in order to stave off unionization and to compete for workers with higher-wage, unionized employers.
In the 1980s, the government-led assault on unions and the massive restructuring of the economy accelerated the weakening of collective bargaining and the erosion of the middle class. Beginning with the breaking of the air traffic controllers' strike, the Reagan and Bush administrations assaulted worker attempts to organize and diminished the power of unions. Employers understood that America's unreformed labor laws and lax enforcement allowed them to harass or fire employees pursuing union representation. Strident, anti-union campaigns became the order of the day. Employees, in turn, grew to understand that there were no laws to protect their union activity. Today only 11 percent of the private sector is covered by collective bargaining agreements. The result is devastating to workers, union and nonunion alike.
The same confrontation with corporations that occurred historically in the manufacturing sector must occur in today's nonunion service sector if workers' incomes are to improve. Consider one telling example, in health care: Certified by the state for their caregiving skills, 150 nursing home workers are employed in Mobile, Alabama, by Beverly Enterprises, the largest nursing home corporation in the United States. Before they organized, they earned a little over $5.00 an hour with no employer-paid health or pension benefits.
Beverly did not pay these workers unlivable wages because they lacked skills, or because Beverly is unprofitable or competing internationally. In fact, Beverly made record profits from these workers in 1994, with net income of approximately $75 million. In the same year, Beverly's CEO made more than $900,000 in compensation and stock, 90 times more than the Beverly certified nursing assistant. These Beverly workers first fought for the right to organize and then voted by a two-to-one margin in 1995 to have United Food and Commercial Workers Union Local 1657 represent them. After a concerted effort, coordinating with workers from other Beverly nursing homes, they were able to get a $2-an-hour wage increase and employer-paid individual health insurance. It was only through the power of their union that they were able to achieve these victories. The former plight of the Mobile workers is echoed throughout the heavily nonunion nursing home sector.
History and statistics show that the presence of a labor union can make the difference between a livable wage and an unlivable wage for most Americans. As the Economic Policy Institute reports, unions have their largest effect on the wages of lower-wage workers. Unions raise the wages of their members in the lowest and second-lowest fifths of the income distribution by 27.9 percent and 16.2 percent, respectively. The advantages of unionization are even greater in overall compensation (wages and benefits), with union workers receiving 33.8 percent more than nonunion workers.
Despite tremendous anti-union, anti-worker corporate activities, unions have succeeded in organizing and moving retail food sector workers into the middle class. Today, a Chicago grocery store employee can support her family because she earns $12.50 an hour with health and pension benefits. Her counterpart in Kansas City cannot do so because she earns only $8.00 an hour with no benefits. The only difference between the two employees is that the woman from Kansas City is alone in representing her economic fate while the woman from Chicago is represented by UFCW Local 881. Union critics argue that higher wages drive up the costs to consumers. But the Chicago woman's employer, the Kroger Company, which operates in thirty-two states, is nearly 95 percent union represented and has operating costs in the middle range of the grocery sector.
LIBERALS AND THE U-WORD
If unions are the key instrument to addressing the stagnating incomes of workers, then why aren't more liberals embracing unions? The evolution of liberalism in the last 40 years has created groups of liberals who define their liberalism quite differently from those of the Roosevelt era. New Deal liberals focused on class and economic power, an agenda consistent with and often driven by the labor unions. Taming the excesses of unbridled capitalism and ensuring that economically weaker groups shared in the economic growth were their goals.
However, American liberalism gradually began to change in the l950s and 1960s. New liberals focused on an individual rights and social freedoms agenda. While the economic agenda of the New Deal had been quite successful in bringing white, male Americans into the economic mainstream, women and people of color were not sharing equally in the benefits of American life. Liberals began refocusing their political agendas to confront rampant race discrimination, eventually challenging discrimination against women, ethnic minorities, gays and lesbians, and people with disabilities. These new agendas were exceedingly successful in the 1960s and 1970s giving legal rights and opportunities to previously excluded groups.
Unions, in fairness, had a mixed record in the individual rights and social freedoms fights of the 1960s and 1970s. They played a crucial supporting role in the passage of the Civil Rights Act of 1964 and subsequent civil rights legislation. However, when civil rights groups moved to convert hard-won political rights into corresponding workplace rights some labor unions resisted. A wall began to rise between labor unions and these new rights-focused liberals.
Ironically, this fundamental split emerged just as liberalism was seeing some of its greatest economic triumphs in the enactment of President Johnson's Great Society programs. But the wall between the new liberals and the labor movement was raised further when the AFL-CIO adopted a strong, pro-Vietnam War position against a younger generation who also identified with a liberalism focused on social and individual rights. The staunch Cold War stance of unionists continued to alienate liberals during the ensuing decades.
By the 1970s unions were also at odds with environmentalists over job losses. These environmental liberals, like their rights-focused, liberal counterparts, mostly eschewed pocketbook issues. Together, this new generation of antiwar, environmental, women's rights, abortion rights liberals stood culturally opposite an older white-male union leadership. Differences in lifestyle, generation, cultural interests, and class separated these new liberals from the union leaders. This political split was exacerbated throughout the 1970s by a stagnating U.S. economy. During this time, the labor unions' white-male leadership looked to reverse their unions' decreasing economic and political fortunes. While enjoying the voting support of liberals in Congress, unions lacked the political support of the new liberal groups who were not addressing a broader economic agenda. The result was the election of Ronald Reagan and a Congress controlled by a coalition of Republicans and conservative Democrats.
Liberal groups of every stripe were under political attack in the 1980s, but labor unions bore the brunt of the presidential and congressional assaults. Each liberal group focused on ensuring that their hard-fought victories in civil rights, women's rights, environmental protection, and gay rights were not eroded. Yet this rights-focused, social liberalism neglected the common economic problems facing workers beginning in the 1980s-wage stagnation and income polarization.
It is not surprising that many working Americans did not see either labor unions or liberals as representing their interests. Labor leaders failed to pay attention to the changing workforce, which was younger, more female, less white, and increasingly in the service sector. Liberals often alienated working-class voters, who saw them as focused on political and cultural rights rather than on the pocketbook issues that had traditionally attracted workers to elect liberal Democrats.
The defeat of Democrats at the polls and the perceived lack of new economic ideas to address the needs of U.S. workers led to the formation of two other liberal camps. The first—characterized by the early writings of Robert Reich—were industrial policy liberals who saw the need for a new generation of government programs aimed at stimulating the economy and enhancing the competitiveness of U.S. corporations. Their solutions, with changing emphases over the years, included increased government research and development expenditures, the targeting of key industries for financial and regulatory support, increased worker retraining and public education programs, and strategic trade policy. For the most part, unions were not part of their solutions.
Another group emerging out of the electoral defeats, self-styled "neo-liberals," would eventually coalesce around the Democratic Leadership Council. These "liberals" defined themselves in opposition to all of the other liberal groups whom they perceived as special interests responsible for the electoral demise of the Democrats. They reserved special animus for labor unions, which they saw as anachronistic, advocating anti-competitive, self-protective programs, and scaring the DLC's business patrons.
NEW LABOR, OLD LIBERALS
Yet in 1996, with virtually all the historical reasons for mutual distrust between liberals and labor unions overtaken by events—the Cold War, the Vietnam War, divisions on women and race—why don't more liberals appreciate unions and work harder on their behalf?
Some liberal politicians avoid visible, public support of strong unions because they think it politically expedient. They may, however, support crucial labor legislation such as increasing the minimum wage and prohibiting striker replacement because they need labor's contributions and grassroots, get-out-the-vote efforts. But too few take the lead in promoting unions as part of a liberal agenda. Even in a recent off-the-record presentation, a senior economic advisor to President Clinton spoke of the problems facing the bottom 60 percent of workers and discussed how to move them back into the middle class, but carefully avoided any mention of stronger unions because it would offend members of the audience who represented business. Vice President Al Gore, asked at last winter's AFL-CIO convention whether workers should join unions, ducked the question. As union representation has dwindled, liberal politicians may see labor as just another interest group-rather than as a valuable political ally.
Many liberals, while sympathetic to unions, still accept the globalization and reskilling argument. In doing so, they neglect the nearly three-quarters of the workforce who are not affected by global competition, but who are the victims of a shift in bargaining power in favor of management. They do so because they see an economy of what Robert Reich calls "symbolic analysts." This is the economy in which they work-the world of managers, policymakers, economists, lawyers, and other professionals. In that world, better education and better training leads to upward mobility. For them, economic change has been economic opportunity, not economic despair, and reskilling seems a sufficient solution for less fortunate workers.
It is not surprising that liberals are reluctant to embrace unions. Because of the checkered history of the past 30 years, labor has not been seen as an ally for progressive change. This image of unions as blue-collar, white-male institutions, unsympathetic to the needs of women, people of color, and gays, still lingers-in spite of labor's more recent history. Over the past decade, unions have supported women's, civil rights, and gay groups that were advocating such legislation as the Family and Medical Leave Act, the Civil Rights Restoration Act, the Americans With Disabilities Act, as well as comparable worth legislation and gay protections.
Today, women, people of color, and a younger generation fill the ranks of the contemporary union movement and its leadership. Women total nearly 40 percent of current union membership and newly organized workers are predominantly people of color and women. Much of the elected leadership at the national and local levels reflects these changes.
Happily, there are signs of constructive change. Recently, a coalition of 24 independent women's groups took a strong public position before the President's Commission on the Future for Worker-Management Relations, urging that all barriers hampering workers' ability to organize unions be eliminated. The coalition testified that the gains in formal legal protections won in the 1960s and 1970s could not produce livable incomes without unions. As stated in their testimony, "Studies unequivocally demonstrate that union membership or coverage under a collective bargaining agreement—more than any other factor—increases women's wages and reduces the wage gap, especially for low-income women and women of color."
Many good liberals with a natural affinity for pocketbook issues found labor's old guard uninspiring. But now the new leadership of the AFL-CIO has a renewed energy and vision, focusing on the economic plight of all American workers. So liberals will have to face that old question, "Which side are you on?" American workers are seeking solutions to their increasing inability to make a livable wage. If the liberal mainstream cannot provide remedies, workers will look elsewhere for answers. Business interests and the nationalist and religious right will fill the void with their own agendas.
Working people feel a legitimate rage at their inability to earn a livable income for their families. The right will continue to use this rage destructively, pitting whites against blacks, native born against immigrants, the individual against government, and America against the world. Business and right-wing politicians will give answers to the frustrations of American workers for reviving a middle class—answers that liberals will not like. Pat Buchanan's strong showing in the Republican primaries reveals this threat. It would destroy the hard-fought gains that liberals have won for women, people of color, gays, and other groups facing discrimination. The right will obscure what should be the legitimate focus of employee rage—corporations that refuse to pay workers their fair share of steadily increasing profits.
Liberals of all stripes need to refocus on an economic-justice agenda to address the economic dislocations and falling incomes of a majority of Americans. This economic agenda must include the proven agent of greater earnings equality—a strong labor movement. The liberal, individual rights and social freedom agenda still fails to address these economic problems. Individuals acting alone cannot confront the power of the corporate world: Unions are the means of confronting this power. If liberals do not include labor unions in their vocabulary, business interests and the nationalist and religious right will control the political conversation and liberalism will continue to lose influence. A revived labor-liberal coalition is the only means of recapturing political power and achieving a progressive agenda.