Unions Enforce Democracy

But we let the protections slip, and allowed money to have too much influence over our political system — so of course those with money used that influence to bend the system their way. Then we allowed companies to cross borders to escape the protections democracy offers — to non-democratic countries like China where workers have few rights, where pay is low, environmental protections practically non-existent. Companies locating manufacturing in places like have huge cost advantages over companies located in democracies that respect and protect the rights of citizens. This movement of manufacturing away from the borders of democracy weakened our unions, and shifted the balance of power away from We, the People.

There has been a massive corporate/conservative attack on labor and democracy over the last 3-4 decades. Billions of dollars have gone into a propaganda machine that tells us that labor unions are bad, that “labor bosses” just want things for themselves, that “union thugs” force businesses out of business, etc.

The successful attack on labor has contributed directly to this economy of massive inequality where workers don’t share in the product of the productivity they generate.

Lawrence Mishel, at the Center for Economic and Policy Research, writes in Unions, inequality, and faltering middle-class wages,

Between 1973 and 2011, the median worker’s real hourly compensation (which includes wages and benefits) rose just 10.7 percent. Most of this growth occurred in the late 1990s wage boom, and once the boom subsided by 2002 and 2003, real wages and compen­sation stagnated for most workers–college graduates and high school graduates alike. This has made the last decade a “lost decade” for wage growth.

… A major factor driving these trends has been the ongoing erosion of unionization and the declining bargaining power of unions, along with the weakened ability of unions to set norms or labor standards that raise the wages of comparable nonunion workers.

… the forthcoming The State of Working America, 12th Edition presents a detailed analysis of the impact of unionization on wages and benefits and on wage inequality. Key findings include:

• The union wage premium–the percentage-higher wage earned by those covered by a collective bargain­ing contract–is 13.6 percent over­all (17.3 percent for men and 9.1 percent for women).
• Unionized workers are 28.2 percent more likely to be covered by employer-provided health insurance and 53.9 percent more likely to have employer-provided pensions.
• From 1973 to 2011, the share of the workforce represented by unions declined from 26.7 percent to 13.1 percent.
• The decline of unions has affected middle-wage men more than any other group and explains about three-fourths of the expanded wage gap between white- and blue-collar men and over a fifth of the expanded wage gap between high school- and college-edu­cated men from 1978 to 2011.
• An expanded analysis that includes the direct and norm-setting impact of unions shows that deunionization can explain about a third of the entire growth of wage inequality among men and around a fifth of the growth among women from 1973 to 2007.

The Social Contract

Labor Day is about honoring the social contract.

Hedrick Smith writes in, When Capitalists Cared in the NY Times,

From 1948 to 1973, the productivity of all nonfarm workers nearly doubled, as did average hourly compensation. But things changed dramatically starting in the late 1970s. Although productivity increased by 80.1 percent from 1973 to 2011, average wages rose only 4.2 percent and hourly compensation (wages plus benefits) rose only 10 percent over that time, according to government data analyzed by the Economic Policy Institute.

At the same time, corporate profits were booming. In 2006, the year before the Great Recession began, corporate profits garnered the largest share of national income since 1942, while the share going to wages and salaries sank to the lowest level since 1929. In the recession’s aftermath, corporate profits have bounced back while middle-class incomes have stagnated.

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