The Right To A Useful and Remunerative Job
Theda Skocpol, as always, makes a compelling case for reweaving the social contract. But one crucial ingredient is missing in her list: organized labor. One of the greatest accomplishments of the New Deal was the National Labor Relations Act, which dramatically transformed the fortunes of working Americans. In 1950, more than one third of working Americans belonged to unions. Wages rose, work grew more secure, and the gap between the wealthy and the working class narrowed. The benefits of unionization provided an economic boost for most workers--even those in nonunionized industries. For a few decades in the mid-twentieth century, it was possible to hold a blue-collar job, live modestly but comfortably, and save for the purchase of a home and even a college education. Unionization made possible the emergence of a broad middle class in the United States.
Those days are gone. Today only a little more than seven percent of private-sector workers belong to unions. Nonunionized blue-collar and pink collar jobs are notoriously insecure. Many service sector jobs don't pay enough to lift workers out of poverty.
Trade unions and their members turned out big to support the Democratic ticket this year--in large part because the devastating consequences of the GOP's anti-labor policies. Barack Obama won election in part because of the unstinting support of organized labor. And he won big among union workers--more than two-thirds supported the Democratic ticket. In key battleground states, including Pennsylvania, Ohio, and Indiana, Obama beat McCain among union members by over 40 points. Unions spent millions of dollars and thousands of hours phone banking, running ads, and getting out the vote.
During the campaign, Obama supported the Employee Free Choice Act, that would lower the barriers to unionization--and penalize employers who have used increasingly punitive tactics to discourage workers from even talking about unionization on the job. But there are signs that the new administration is backing off. In the long list of items on the White House agenda, veterans, the disabled, family farmers, and even sportsmen appear prominently. Job creation is at the center of the economic stimulus package. But unions are conspicuously missing.
There are three reasons to put unions back into the center of the national agenda:
1. Democracy. Workers deserve a voice in their workplaces. Unions should be able to organize without intimidation. As Harvard economist Richard B. Freeman has shown, the vast majority of workers want a greater say in their workplaces, and see unions as a vehicle for their representation.
2. Economic Security. The current credit crisis is, in part, a consequence of inadequate wages. Nearly a quarter of workers--before the onset of the current economic crisis--did not earn enough to rise above the poverty line. And blue and pink collar wages have been stagnant for a long time, even when productivity and corporate profits were rising. The result is that workers shoulder huge debts to meet the basic costs of housing, food, and transportation.
3. Opportunity: The benefits of well-paid work and economic security have a multi-generational effect. They shape the life opportunities for the next generation of Americans. My grandfather, an Irish immigrant with a third-grade education, held a unionized job for most of his life. He owned a house, paid tuition for his children to attend Catholic school, and provided them with a sense of economic security and social capital that shaped their future careers. Unlike workers in previous generations, my grandparents did not have to struggle for survival. And unlike many nonunionized workers today, they did not have to live precariously from paycheck to paycheck, take two or three jobs, and still barely make ends meet.
In his 1944 State of the Union Address, President Franklin Delano Roosevelt enumerated a Second Bill of Rights. At the top of that list was "the right to a useful and remunerative job..." That right has been whittled away in recent decades. It's one that a Democratic president and a Democratic congress can and must restore.
Actually I have an odd suggestion for anyone excited about organized labor. Read Marx.
Marx's chief insight had nothing to do with class warfare. It was that technology (Marx used the term "Means of Production") determined progress (both social and economic).
Technology made it possible for even unskilled First World workers to live very high on the hog in the middle of the twentieth century. And because American workers were teh most productive of all, they were the best compensated.
The spread of technology, and the development of new technologies (standard size ISO containers, the Internet) has depressed the relative wages of unskilled labor in the First World since then.
The decline of organized labor isn't a cause - it's a symptom. It's the runny nose of economic progress.
If you want to make money (more than a little) in the First World today, you need to provide something that can't be provided as easily elsewhere. Financial services, professional services, very high technology applications (although in the United States these are stunted industries due to export controls - export controls ought to be the first target of people looking for new manufacturing jobs in this country)... There are answers, but they're not unskilled labor.
January 23, 2009 11:49 AM | Reply | Permalink
You raise some interesting points El P, though unskilled workers are still the backbone of key--and growing--sectors in the US economy. These are jobs that cannot be outsourced or sent overseas: janitors, nursing home staff, hotel and restaurant workers, hospital orderlies, landscapers, retail "associates," etc. These are bottom rung jobs, most with poor wages, few with benefits. A majority of these jobs are held by women. Service sector workers face chronic insecurity: miss a day of work because of a sick family member and you're fired.
The service sector is the future of American unionism. Unskilled service sector jobs are not disappearing--and some sectors (like elder care) will grow rapidly in the next few decades because of the aging of the baby boom generation. Unions are targeting the service sector, but they face real obstacles, especially intimidation campaigns by employers. That's why stronger, worker-friendly labor laws are necessary now.
January 23, 2009 12:52 PM | Reply | Permalink
"Theda Skocpol, as always, makes a compelling case for reweaving the social contract."
Since Theda has made the case, I guess there is no need to read your writing.
January 23, 2009 10:11 PM | Reply | Permalink
Some points need to be made more than once. Sentence 2: "But one crucial ingredient is missing in her list: organized labor."
January 25, 2009 9:40 AM | Reply | Permalink
Dreamers, in the US, we have a constitution, some amendments to it, and a big pile of laws. As far as a social contract, it is mere fantasy on your parts.
There is no social contract. Among adults, agreements are made in which one sells his or her labor for a price someone willing to buy it is willing to pay. Any outside forces exerted on these free agreements among adults distort the marketplace and doom all involved to economic failure.
Bemoan your personal failures all you wish. If you find your situations unfortunate, it is most likely due to your waiting around for government power to give you something. But you have no right to take others down with you.
Reweaving that which doesn't exist has got to be a waste of time on your parts.
January 23, 2009 10:49 PM | Reply | Permalink
Spric offers a version of market fundamentalism. It bears little resemblance to the way that the market has worked for nearly all of American history.
Two points to make. First the history (and present) of labor in America is one of a rhetoric of free choice and a reality of limited information and constraint. It is Ayn Randian wishful thinking that we are all economic atoms acting wholly individually.
"Outside forces" that have shaped the American economy since the early Republic: infrastructure development, underwritten by the federal government (canals in the early 19th c, railroads later in the 19th c., highways in the 20th c.) Government power has been indispensable to American economic growth, in particular in underwriting or funding what is too expensive or unprofitable for the market to bear.
The fundamental question today is how to fashion a policy that expands opportunity and uses governmental power wisely to compensate for the failures of the market.
January 25, 2009 9:51 AM | Reply | Permalink
Name one 'failure' of the free market. Not a 'failure' of a market coerced by the government, but an example of where the free market failed.
January 25, 2009 7:38 PM | Reply | Permalink
That's an easy one: The recent collapse in the mortgage market, due to the abandonment of lending standards.
Nonbank companies were able to originate loans for a fee, and sell those loans without keeping any skin in the game. Hence the winning strategy for lenders was to originate as many mortgages as possible, without it mattering whether the borrower was able to pay. Some of these were on a short fuse (no-doc loans) and some on a longer fuse (negative amortization loans and adjustable-rate loans with teaser rates). By the time the loans went sour, they had been sold, and it was not the originators' problem.
The government may or may not have been encouraging lending. That's irrelevant, because the only encouragement that lenders would pay attention to was: Fees. As long as it was personally profitable, they'd do it. If it hadn't been personally profitable, they wouldn't. CRA, Fannie, and Freddie all had standards for the loans they originated, and those loans seldom defaulted; but over half the loans were originated by nonbank storefront shops, here today and gone tomorrow, with low or no standards.
After the nonbank lenders caught the rhythm, some of them were pulling homeless people in off the street and paying them $100 to put their names on fraudulent mortgage applications. In those cases, no one would even move into the house, but it might become a crack house, and of course no one would fix the roof or even replace broken windows. By the time the mortgage-holder reacted, the house might be completely derelict.
The really corrosive aspect of this was that it drove real estate prices up. You could buy a house for $100k, sell it to a friend for $120k, and then get a third person to take out a fraudulent mortgage with a valuation of $150k. You'd get maybe $1000 in fees and your friend would get a cool $20k, and both of your would be OUT of it, finished, in the clear.
So then when Honest Homebuyer shops for a house, he finds out that the house next door (and houses all over the neighborhood) have risen in price by 50%. HH responds by buying a similar house with a Fannie/Freddie loan, backed by adequate income and down payment. Then the bubble bursts and his $150k home, with a $120k mortgage, is only worth $100k. So HH mails in the keys and votes for Change. He doesn't really understand what hit him, but he knows that something is not right.
Meanwhile, a lot of appraisers learned that the name of the game, for them, was to ask the originating institution what the appraised value of a certain property was supposed to be. Then the appraiser would say that it was worth that amount, collect an appraisal fee, and have a beer on the way home. The appraisers had no skin in the game; there was no penalty for being "mistaken" in their estimates. The originators soon figured out which appraisers to go to for this service.
January 25, 2009 9:25 PM | Reply | Permalink
New policies like abolishing the secret ballot? Tsk.
A fact of life you are going to have to acknowledge is that unions don't create jobs. In fact labor, without capital inputs of tools, materials, and an idea... is just a bunch of guys standing around in a parking lot with nothing to do.
Oh yeah, one more fact of life. The real reason that the post war era was so prosperous is that we destroyed the rest of the worlds manufacturing ability. Not because of unions.
January 24, 2009 9:06 AM | Reply | Permalink
American dominance in global manufacturing after WWII is an important part of the story, but there was nothing inevitable about the wage increases, generous health, retirement, and unemployment benefits, and protection against arbitrary firing. Good wages and benefits were hard won. One lesson from postwar economic history makes clear the critical role that unions played in improving the well-being of workers. Wage and benefits were the highest in the North, in the states with the highest levels of union density. They were the lowest in the South, in the "right-to-work" states where employers and elected officials fiercely resisted unionization. Both regions benefited from American dominance in the global economy. But northern and southern workers benefited from that unequally. One of the major differences: unions.
January 25, 2009 10:00 AM | Reply | Permalink
Looks like a bunch of corporatist trolls in here. Look first of all at the "free contract" meme.
American business likes to regard workers as being as disposable as pieces of bathroom tissue. The "contract" meme is a joke; the employers have all the power, unless workers combine into collective bargaining units.
The employee goes into the personnel office and says, "I've been working here two years, and you know I've been working hard; may I please have a dime an hour raise?" The HR person leafs through printouts of stats generated by consultants and sees that unemployment is high, and says, "No." That is not a fair, negotiated contract. Meanwhile the company is setting new records for profits, year after year. The power is all on one side.
Read your Adam Smith. While he is the patron saint of laissez faire, he also wrote nearly as many words about the fact that it is necessary to regulate and counter-act the free markets. He cited and complemented David Ricardo on the subject of "a living wage", arguing that businesses will always try to cut costs by paying their workers less and less, until they make too little to support their families; and then until they even make too little to live even as individuals. Businesses are focused on reducing their own wages; if an employee can't survive, just hire another.
Look at how business fights against any increase in the minimum wage; and many of the larger employers have a policy of hiring people only on a part-time basis if at all possible. They resist paying for health insurance, and oppose SCHIP; those damn kids can just die as far as they are concerned. In this kind of environment, the employees will not be able to send their kids to college, now, will they?
Businesses are highly co-ordinated, both within a business and among businesses. Workers need to be able to combine their voices, in order to gain the ability to actually negotiate those "free contracts" that you invoke.
January 25, 2009 8:17 AM | Reply | Permalink
BureauCat has it exactly right. The major constraint on freedom of contract is the asymmetry of power between workers and businesses. Unions allow workers to aggregate their voices and gain some bargaining power with profit-maximizing employers.
January 25, 2009 9:55 AM | Reply | Permalink