Friday 13 March 2009
by: Seth Sandronsky, t r u t h o u t | Perspective
A supporter of the Employee Free Choice Act holds a money bag as a prop during a rally on March 9 in Washington, DC. (Photo: Getty Images)
Across the US, indebted businesses and consumers are struggling to make ends meet. The same holds for local and state governments. Fortunately, help is on the horizon. No, the helping hand is not Uncle Sam doling out more tax dollars to giant banks and insurers. Rather, it is about Rep. George Miller (D-California) and Sen. Ted Kennedy (D-Massachusetts) introducing the Employee Free Choice Act in the House on March 9. The bill, an amendment to the National Labor Relations Act of 1935, would ease the current path to union membership, levy stiff fines on employers who resist employees' choices and impose binding arbitration for first-contract talks between companies and workers. Further, the EFCA would strengthen the weakened purchasing power of millions of American workers who have kept themselves and the economy afloat with debt-led consumption.
Consider this. Workers in unions earn higher wages than those who labor in union-free workplaces. According to the US Bureau of Labor Statistics, "among full-time wage and salary workers, union members had median usual weekly earnings of $886 while those who were not represented by unions had median weekly earnings of $691" last year.
All things constant, the more a worker earns, the less she needs to borrow to get by.
The backdrop to the EFCA as a stimulus for the US economy is the crash of a multitrillion-dollar housing bubble. Absent a worker's ability to tap into her rising housing price as the economic slowdown worsens, she is pulling back on consumption of all manner of purchases: from autos to food and travel. This pullback effect is underway across the US economy, 70 percent of which is on consumer spending. Therefore, a national policy of recovery requires government intervention for the working majority. The EFCA could do that.
If Congress passes the EFCA and President Obama, who co-sponsored the bill as a senator in 2007, signs it, the ranks of union members could grow by millions. That would speed up the recovery of the economy, according to a recent report by David Madland and Karla Walter of the Center for American Progress. "One of the primary reasons why our current recession endures is that workers do not have the purchasing power they need to drive our economy," they write.
Ninety-two percent of Americans in the private sector work for non-union employers. Unionization rates for private-sector workers are about a fifth of their counterparts in the government sector, where the major union growth has occurred. However, the private sector is where the bulk of workers toil. Their productivity, or output per hour, expands the US economy. The EFCA would help this large share of the labor force whose energy creates the growing pie to gain bigger slices of it.
The opposite has been the case for some time. In fact, American workers have experienced ever-worsening income inequality over the past 30 years. In "Crunch: Why Do I Feel So Squeezed?" (and "Other Unsolved Economic Mysteries," 2008), economist Jared Bernstein explains what happened to the trend of shared prosperity in the three decades following WW II, the so-called "Golden Age." The author, now a top economic adviser to Vice President Joe Biden, reveals that labor unions enabled workers' living standards to keep pace with the rate of productivity growth.
As labor unions weakened, US workers' share of the pie got smaller. The process sped up with the election of President Ronald Reagan in 1980. "Looking from 1980 to 2008, nationwide worker productivity grew by 75 percent, while workers' inflation-adjusted average wages increased by only 22.6 percent, which means that workers were compensated for only 30.2 percent of their productivity gains," write Madland and Walter.
For an extreme current example of US private employers' hostility toward unions, we turn to the giant of the retail industry, Wal-Mart Stores Inc. The company is the largest non-union, private-sector employer nationwide. Crucially, organized labor has been unable to change that equation between the company and its at-will work force to date. EFCA could change that stalemate. Therefore, the implications for organizing employees at Wal-Mart Stores Inc. into a union would be huge for the company and its smaller competitors. What horror!
That is why the US Chamber of Commerce is the lead business lobby rallying to defeat the EFCA, which passed the House in 2007 but died in the Senate later that year. Despite and because of the bill's capacity to stimulate the US economy from higher wages and improved buying power for working people, the USCOC wants to keep federal labor law as it is, slanted towards the power of employers in secret-ballot elections directed by the National Labor Relations Board. For business interests, it is better in the short term to thwart the EFCA's passage than to allow more workers to unionize, boost their earning power and lessen the role of spending based on lending in the US economy.
Seth Sandronsky lives and writes in Sacramento. Contact him at ssandronsky@yahoo.com.
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