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 equalitystrong 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
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
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|
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 Statesnot 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
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,
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
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 firstcharacterized
by the early writings of Robert Reichwere 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 eventsthe
Cold War, the Vietnam War, divisions on women and racewhy 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
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 agreementmore
than any other factorincreases 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 classanswers 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 ragecorporations 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 equalitya 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.
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