Why Labor Law Should Stop Leaning So Hard on the Wagner Act

AP Photo/Mike Groll

A fast-food worker raises her fist during a rally for a $15 an hour wage at the Empire State Plaza Concourse, Wednesday, April 15, 2015, in Albany, New York. 

The Wagner Act turns 80 this week and it’s about time that we lessen the old man’s load. For too long, this legislation that was meant to encourage workplace democracy has actually shouldered much of the burden of our nation’s employer-centered social welfare state. It’s high time to get citizens’ health care, pensions and even guaranteed basic wages off its back, and to allow the Wagner Act to do its job: giving workers in the U.S. a real voice on the job.   

Signed into law by President Franklin D. Roosevelt on July 5, 1935, the Wagner Act (or National Labor Relations Act) marked the first time private-sector workers in the U.S gained permanent federal backing for organizing unions. Under the Wagner Act, if the government certified that the workers had a union—usually through a union election—then their company was obligated to enter into collective bargaining. Not only that, but the Wagner Act made it the “policy of the United States” to protect this right.

Millions of workers joined unions in the decade after Wagner’s inception, and in its early years workers’ unions and employers mostly bargained over wages and working conditions. After World War II, when the U.S. eschewed the European social welfare model for an employer-provided one, however, our government did not require employers to provide these benefits. Rather, the government turned to unions to bargain with employers for much of U.S. citizens’ new social wage. The 1948 Inland Steel NLRB decision opened the door for unions to bargain on health care and retirement plans, and a 1949 Truman fact-finding board on a major steel strike ordered the company to bargain on issues of benefits.  

Soon, collective bargaining became a centerpiece of the nation’s employer-centered social welfare state. By 1954, three-quarters of union members were covered by a health plan or pension through collective bargaining, up from one-eighth in 1948. At first, these gains were limited to union members, but over the ensuing decades these union benefits spread as even employers without a union matched unionized wages and benefits. A mere 16 percent of workers had regular medical coverage in 1950, but nearly 70 percent did 25 years later. By 1979, 83 percent of unionized workers had a company-provided pension as did 39 percent of workers without a union. A worker in England would not have to go through a union election to be able to afford heart surgery or doctors’ visits, but in the U.S. winning a union election under Wagner meant gaining access to the most secure tier of our social welfare state. 

Yet in depending on unions to do the negotiating for a social wage, the U.S. had inadvertently given employers in the U.S. a higher incentive than employers in other nations to fight union organizing. After all, if workers won a union through the Wagner Act, employers would most likely be on the hook for not only higher wages, but also better retirement and health benefits and perhaps even supplemental unemployment compensation—the closest thing the U.S. has ever had to a guaranteed basic income. When employers faced escalating global competition in the late 1960s and 1970s, they increasingly resisted workers’ organizing efforts, became quicker to hire anti-union consultants and broke labor law more frequently. By the turn of the 21st century, 57 percent of employers faced with a union organizing drive threatened plant closure, according to a study by Cornell University’s Kate Bronfenbrenner, and 34 percent fired union supporters. Wagner still deemed such threats illegal, yet the law’s penalties and enforcement were too weak to stop them. Employers effectively narrowed the Wagner Act’s reach, and fewer workers than ever could benefit from collective bargaining’s power to improve their social welfare.

There have been a number of intriguing proposals for strengthening or bypassing the aging law, such as making the right to form a union a civil right or allowing workers to skip organizing for a majority and instead to build members-only unions. It’s also clear the Wagner Act needs to be updated to cover the burgeoning ranks of the exempt, such as those working people legally considered independent contractors—even when they drive the same company truck each day, or sweep the same office floors. Yet none of these fixes gets to the core issue about the undue burden our nation’s employer-provided social welfare system has placed on labor law and the workers who would like to form unions.  

The best way to fix the Wagner Act and to restore workers’ freedom to form union is to lighten the work we expect this 80-year-old law to do. All workers need a guaranteed basic annual income, all workers need full access to health care, and all workers deserve to retire with guaranteed dignity—whether they have a union or not. Once our nation guarantees universal social wage benefits for our workers, employers will have less incentive to wage war on unionizing efforts, and the Wagner Act may once again be a potent tool for bringing democracy and worker empowerment to the nation’s rapidly changing workplaces. 

Happy Birthday, Wagner. You deserve a break.  

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