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Commentary | COLUMN LEFT / HARLEY SHAIKEN

Labor's Decline Has Meant Wages' Decline

The economy suffers as union membership sinks while corporate power grows.

March 08, 1998|HARLEY SHAIKEN | Harley Shaiken is a UC Berkeley professor specializing in labor and the global economy

Betty Dumas worked at the Avondale Shipyards in New Orleans for 18 years. In 1993, she and her co-workers voted 1,802 to 1,268 to unionize. Despite this lopsided vote, Avondale has yet to sign its first contract. Four years later, Betty, a pipe fitter and the mother of three, was fired for refusing to sign a statement repudiating the union and then arrested for trespassing when she returned to pick up her pink slip.

Is Betty Dumas' experience unique? Unfortunately, it has become all too typical. One-third of workers who vote for unions never achieve a first contract. (The National Labor Relations Board last week ordered Avondale to reinstate 28 fired workers and pay $3 million in back salaries.)

Not surprisingly, union membership has slid from a high of 40% of the private sector work force in the late 1950s to 9.8% last year, the first time it has sunk to single digits since the 1930s.

Should this steep drop in union membership matter to most Americans? Yes, a great deal. For one thing, unions paved the road to the middle class for millions of working families.

U.S. economic success in this century has depended on the ability of workers to buy the products they produce. We associate Henry Ford with two rather extraordinary events: He introduced the assembly line in 1913 and he doubled the wages of his workers soon after. Less well-remembered is that within a few years inflation had eaten away all the economic gains from workers' paychecks.

It took the emergence of mass-based unions in the 1930s to institutionalize the revolutionary principle that Henry Ford had pioneered: Workers ought to share in the productivity improvements that they help create. This simple idea--linking rising productivity to rising wages--led us into what many have called the golden years of the U.S. economy. From the early 1970s on, however, the decline of unions has fueled the decline of real wages. We began building exit ramps rather than entrances to the middle-class highway, leaving the U.S. with the distinction of having the most unequal income distribution in the industrial world.

Can the U.S. really afford a strong union movement in a fiercely competitive global economy? A more appropriate question might be: Can the U.S. afford not to have a strong union movement today? A firm might be able to succeed in the short run by slicing jobs and cutting wages. What might be good for the firm in the short run, however, is disastrous for the economy in the long run.

A motivated, engaged and well-paid work force offers an alternative basis on which to compete. This approach needs worker voice and worker participation. Unions today provide the voice and the security necessary to make this new competitiveness work.

Without strong unions, we run the risk of creating two Americas--one in which BMWs are in hot demand and the other in which working families are finding it harder to afford new Chevys.

Consider Silicon Valley. The innovation of its engineers and the economic success of its firms are justifiably the envy of the world. Overwhelmingly, however, these high-tech firms are nonunion. What are the consequences? Unprecedented stock options for those at the top and declining real wages for those on the production floor. The real wages of the bottom 25% of Silicon Valley workers plummeted by more than 13% between 1989 and 1996.

The contribution of labor goes beyond the paycheck: Unions are the cornerstone of a democratic society. As former Secretary of State George Schultz put it "[in] a healthy workplace, it is very important that there be some system of checks and balances." He added "Free societies and free trade unions go together."

Today our system of economic checks and balances is dangerously out of whack. In the 1950s, when unions represented 40% of the work force, we could reasonably speak about big corporations and big labor. In terms of size, we now are looking at mega corporations and micro labor. The danger we face is that we enter the 21st century with the labor relations of the 19th.

Polls show that 44% of private sector workers would like to have a union, a far higher number than the 9.8% who are actually members.

A combination of raw economic power and fear is repealing the most basic legal rights that workers have. It isn't that unions no longer have a level playing field on which to organize; it is more that they are locked out of the stadium where the game will be played.

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