Union Choice Would Help A Faltering Economy

Amid the chatter about the worsening economy and what to do about it, a key factor has been omitted, even by progressives who ought to know better: an underlying structural cause of the current economic mess is the dismal failure of the United States to protect the fundamental human right of its workers to form unions and bargain collectively. A durable cure for the ailing economy therefore requires going beyond short-term stimulus, no matter how well crafted. The cure must include getting serious, as a nation, about protecting the most basic of workplace rights — starting with passage of the Employee Free Choice Act.

What’s the connection, you may ask? After all, the aggressive corporate offensive against workers’ rights, often helped and encouraged by government policy, is by now well into its fourth decade, as are its predictable economic consequences. Those consequences include a widening gap between wages and productivity, skyrocketing profits and CEO pay, an increase in economic inequality to levels not seen since the 1920s, rising economic insecurity, and stagnant or declining real wages for the vast majority of workers. Economic growth since the 1970s may have bypassed the bulk of the nation’s workers, but apart from a few significant and in some cases severe recessions, growth did for the most part continue. Why didn’t suppression of workers’ rights become a key structural cause of a stalled-out economy until now?

A big part of the answer can be found in the interplay of financial bubbles with easy access to credit. For years, these factors buffered the impact of stagnant or declining real wages and mounting insecurity upon economic growth, but the day of reckoning has arrived. Throughout much of the 1990s, a rising stock market generated enormous paper wealth that kept the economy buoyant even though most working families were not invited to the party. More recently, the bubble in housing and other real estate, spurred on by easy access to mortgage lending, home equity loans and other forms of consumer credit, substituted for the wage increases that workers were not getting. As Barbara Ehrenreich explained it recently, workers were told that they couldn’t get wage increases, but “have we got a loan for you.”

There’s a problem with bubbles, of course: eventually they burst. The painful unwinding we are now witnessing from the bursting of the housing bubble and the related subprime mortgage-lending crisis may be the proximate cause of today’s worsening economy, but there is a deeper cause. That deeper cause is the long-term failure of workers to receive wage increases commensurate with rising productivity, and the worsening maldistribution of income and wealth—largely rooted, in turn, in the nation’s failure to uphold and protect workers’ freedom to form unions and bargain collectively.

The potency of collective bargaining to address workers’ economic needs is undiminished, but only one worker in five who wants collective bargaining has access to it today, due to corporate America’s long-term anti-workers’ rights offensive. According to the latest figures from the Bureau of Labor Statistics, union members earned 30 percent more than nonunion workers in 2007 — a union advantage of $200 per week, or more than $10,000 per year. The union advantage in health insurance and pension coverage is even greater. For women and workers of color, the earnings advantage of collective bargaining is greater still: 33 percent for women workers, 37 percent for African American workers, and 51 percent for Latino workers.

With these kinds of numbers as backdrop, not to mention the many non-economic advantages of collective bargaining such as justice on the job, it should come as no surprise that 53 percent of America’s nonunion workers want a union in their workplace. Why can’t they get one? The chief reason is employer interference, aided and abetted by a legal framework that has become a death trap for workers who are struggling to form a union.

Fortunately, an important part of the solution is at hand: passage of the Employee Free Choice Act. Not only would this legislation enable many more workers to gain access to the collective bargaining that they need and want, but it would put the nation’s economy on a firmer footing to restore balanced growth and avoid or moderate the next bubble-based recession.