America Needs to Empower Workers Again

Labor activists hoped that Amazon’s Bessemer (Ala.) warehouse unionization vote would signal a turn in the decades-long trend towards union decline. The vote revealed instead the continued effectiveness of tactics used by employers to defeat organizing efforts.

Union advocates should not give up. The political environment giving anti-union employers an advantage may be changing. The decline in unionization is a political outcome, and not a consequence of a changing economy. If America is to reverse the spiraling inequality, it needs a revival of unions.

Let’s start by talking about why union membership declined in the first place, and why it’s still possible to hope for a revival.

America had a strong labor movement. Between 1934 and World War II, union membership shot up. In 1950, around a third nonagricultural workers joined unions. As late as 1980 unions still represented around a quarter of the work force. Nonunion workers also felt the impact of strong unions. They were able to set pay norms for their members and alert nonunion employers that they should treat their workers fairly lest they be subject to an organizing drive.

But union membership plunged, especially in the private sector, during the 1980s, and has continued to fall ever since.

Why did this happen? Many people believe that automation and globalization have caused the decline of unions. They claim that unions can’t pay higher wages if employers have the option to replace low-wage workers with robots, or move production overseas. The evidence is not in support of this assertion.

Despite all the talk of robots nowadays, technological progress was actually much faster than we have seen in recent years during high tide unionization. From 1947 to 1973, output per hour increased almost two-fold as fast as it has since 2007. But that didn’t stop unions having an enormous influence over wages.

It is often overlooked that globalization has a significant impact on society. Around three quarters of the employment in advanced nations is in “nontradable,” activities that cannot be moved abroad. This proportion has not changed much in recent years.

Amazon is an excellent example. These warehouses cannot be moved to other countries; their sole purpose is to maintain inventory close to major market areas so Amazon can deliver in a matter hours.

If the service sector was unionized, it would be difficult for employers to replace skilled workers with robots and offshore production. Indeed, other advanced economies like Denmark, which are every bit as globalized as we are, still have largely unionized work forces; even Canada retains a much larger union movement than we do.

Why are unions in America so weak? While the details are in dispute, U.S. politics took a sharp anti-union turn under Ronald Reagan, encouraging employers to play hardball against union organizers. Workers in the most growing sectors of the U.S. Economy were left mostly un-unionized as the center gravity of the economy shifted away from manufacturing to service.

And this decline in unionization has had dire consequences. In their heyday, unions were a powerful force for equality; their influence reduced the overall inequality of wages and also reduced wage disparities associated with different levels of education and even race. The ” Great Compression” which saw a rapid drop in inequality from the mid-1930s through 1945 has been linked to a rise in union membership. This transformation made America a middle income nation.

Conversely, the decline of unions has played a big role in rising inequality and wage stagnation. Workers have also lost their bargaining power due to weak antitrust policies that have allowed corporations to gain more market power.

An additional point: Strong unions do not only level the economic playing field. We also need them to level the political playing field.

While it’s heartening to see the Biden administration proposing a rollback of Trump-era giveaways to corporations, it’s still true that big money has vast political influence. It’s not simply a matter of campaign contributions. Corporate interests have the power to influence the debate as they can offer lucrative jobs for former politicians and officials and lavishly support friendly think tanks.

Organized labor was once an effective counterweight to corporate influence. Unions couldn’t match the corporate dollar power but they could give people power — the ability of their members and their neighbors to mobilize in a way corporations cannot. We need this kind of countervailing power now more than ever.

Let’s just hope that labor advocates see Bessemer not as a source of despair, but as a learning opportunity. We need strong unions to be restored.

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