Labor Lost

If you had to pick a time and a place where the 20th century (as a distinct historical epoch) began in America, you could do a lot worse than 90 years ago in Highland Park, Mich. It was there, in 1913, that Henry Ford opened his new Model-T plant and announced, a few months later, that he'd pay his workers a stunning $5 a day on the revolutionary theory that the men who built cars should make enough money to buy them.

Within a couple of decades, it wasn't just cars that the men on the assembly line could afford. Particularly after the United Auto Workers burst on the scene in the mid-'30s to win successively larger wage settlements for its members, Detroit became the American metropolis with the highest rate of home ownership during the first half of the century. In the post-World War II period, that distinction shifted to Los Angeles, where vast housing tracts sprang up around the unionized aerospace factories that were then the city's largest employers.

So in honor of yet another Labor Day, here's a depressing question: Where are the housing booms for the current generation of working-class Americans? Not around factories, that's for sure: We close factories in America today. In the past four years, the United States has lost nearly one in nine manufacturing jobs, including 20 percent in durable-goods industries such as autos.

You won't find any housing development radiating outward from the center of the new service and retail economy, either. Ford and General Motors are yesterday's news; the employer that now sets the standards for working-class America is Wal-Mart. The nation's largest employer, with 3,200 outlets in the United States and sales revenue of $245 billion last year (which, if Wal-Mart were a nation, would rank it between Belgium and Sweden as the world's 19th largest economy) doesn't pay its workers -- excuse me, "associates" -- enough to buy decent cars, let alone homes. According to a study by Forbes, Wal-Mart employees earn an average hourly wage of $7.50 and, annually, a princely $18,000.

Just as Ford, GM and the UAW once drove up wages for workers who were nowhere near auto factories, so Wal-Mart drives down wages for workers who never set foot there. Controlling as it does so much of the low-end retail market, Wal-Mart has, with great success, pressured suppliers to cut their labor costs. No other American company has done as much to destroy what's left of the U.S. clothing and textile industry or been so loyal a friend to the dankest sweatshops of the developing world. And unless American unions can find the political leverage to block Wal-Mart's expansion into non-southern metropolitan areas, the company poses a huge threat to the million or so unionized clerks who work at the nation's major supermarket chains.

It may just be me, but I don't recall the moment when the American people proclaimed their preference for an economy driven by Wal-Mart to the one driven by General Motors. It is, after all, one thing to live in a nation where the largest employer wants workers to make enough to afford its cars; quite another to wake up in an America where the largest employer wants workers to make so little they'll be compelled to buy low-end goods in a discount chain. Indeed, polling has consistently showed that a clear majority of the American people have been dubious about the benefits of free trade -- but these are the only polls that the political elite, so poll-driven on other questions, has consistently ignored. By the same token, polling also shows that Americans believe workers should have the right to join unions free of intimidation, yet that has not been the case in the American workplace for at least the past three decades.

Prodded by a labor movement that's grown smarter, if not more powerful, since John Sweeney took the helm at the AFL-CIO eight years ago, the Democrats have finally started to move on these questions. Most of their presidential candidates now say that labor and environmental standards and worker rights have to be an integral part of any future trade agreements, and that labor law must be reformed so that workers can again join unions without fear of being fired.

The relation of union power to mass prosperity is, in a word, causal. Anyone who doubts that should go to the only American city today where there's a boom in housing construction for the working class: Las Vegas. The MGM-Grand, the Bellagio and Caesar's Palace are the Ford and GM there, and a quite brilliant hotel workers union, which has won the right to represent the workers in all the strip hotels, is the latter-day UAW. And the desert rings with hammering and sawing as homes go up for the only low-end service-sector workers in the Wal-Mart economy who've won the living standards to sustain the American dream.

Harold Meyerson is editor-at-large of the Prospect.

This column originally appeared in yesterday's Washington Post.

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