What It’s Going to Take to Claw Back Middle Class Wealth from the 1%

Feb 10, 2013 Posted by

  Economy

Photo Credit: Shutterstock.com

February 6, 2013  |

If you truly care about economic justice, then you’ve got to worry about the precipitous decline of labor unions in the United States. Just take a look at these two charts. The first shows the rise and decline of union membership in the private sector from the depths of the Great Depression to today. You can clearly see that unions were a very big deal from the mid-1930s to the early 1980s. By 1953, more than one out of three American workers were members of private sector unions. That means there was a union member in nearly every family.

Through the late 1950s and 1960s, the percentage of union members declined, but the absolute number continued to increase, peaking at nearly 21 million members in 1979, (largely due to the influx of public sector workers during the 1960s and 70s). Then the decline accelerated as the share of union members fell by half between the mid-1970s and the early 1990s. (If we include public employee union members, the current rate is 11.3 percent.)

The second chart traces the share of our national income grabbed by the top one percent of U.S. households. It’s basically the inverse of the unionization chart. When unions were at their strongest, inequality was the lowest. In 1928, the top one percent hauled off 23.94 percent of all U.S. income. As unions grew, the income share for the richest dropped to less than 10 percent. And as unions declined, the income share going to the wealthiest shot right back up to 1928 levels.

It’s not a coincidence. When unions are strong, they bargain for higher wages and benefits. At the same time, non-union employers increase wages and benefits to attract qualified workers and prevent unions from coming in. Also, unions work for legislation that benefits middle- and low-income people (unemployment benefits, minimum wage, progressive taxation, Medicare, Medicaid, Social Security etc.). Overall, those efforts shift income from the top to the middle and bottom of the income ladder. (For more information on inequality, please see my new book, How to Make a Million Dollars an Hour: Why Hedge Funds Get Away with Siphoning Off America’s Wealth).

What Happened to Unions?

While working with the labor movement over the past 35 years, I’ve heard myriad explanations for the decline: unions are not democratic enough; they don’t know how to organize the community; they’re victims of globalization; they are too bureaucratic; they don’t work hard enough in politics; they don’t embrace young people and minorities…and so on. While many of these problems are real, I don’t believe they explain what’s really going on — namely that unions and the rest of us are on the losing side of a gigantic class war.

The top one percent understands that unions are the only institution in America that stands in the way of the rich getting richer. As a result, the assault on unions has been deliberate and merciless. Step by step, labor laws have been weakened so that organizing new members has become nearly impossible. For example, employees get fired right and left for organizing activities in violation of labor law. But, employers are rarely charged by the National Labor Relations Board. And when they are, the only penalty is that the discharged workers get back their jobs and back-wages — minus what they earned in the meantime.

Republican-dominated state governments are attacking public employee unions and further weakening labor protections. Almost every day we see laws proposed that would weaken the ability of unions to engage in political action. The goal is clear — zero percent unionization.

Unions, of course, know all this and have been pressuring Congress for years to reform labor law. In fact, they were sure they could pass the Employee Free Choice Act (which would greatly facilitate union organizing) when the Democrats controlled the White House and Congress from 2008 to 2010. It didn’t even come up for a vote.

What is to be done?

Right now, there are hundreds of small worker centers all over the country helping unorganized workers deal with problems at work. These proto-unions are staffed by young activists are full of hope. Some major unions also are deeply engaged in community organizing, trying to build large coalitions that support worker rights, increases in the minimum wage, and eventually, unionization. Nearly every union is fighting to prevent state governments from destroying public-sector unions and creating right-to-work-for-less states. And of course, unions continue to throw themselves, heart and soul, into electing Democrats. And yet, the decline continues.

I wish I had a dime for everytime someone like me attempts to chart a new path for labor. We always start with talk about building a movement, rebuilding class power, fighting for economic justice, working with and on behalf of the poor and the unemployed, uniting with environmentalists, linking with workers in developing nations like China, Brazil and India…and on and on. While all of these actions are important, I don’t see how they will add up to a new movement with the power to take on our greedy elites.

So here’s my two cents worth: Americans are furious with Wall Street. We’re living through a crash created by and for financial elites, and the elites are coming out of it unscathed. Instead of Wall Street paying for the damage it has done, the rest of us are now being asked to pay with cuts in Social Security, Medicare, Medicaid and many other programs that benefit middle- and lower-income groups. Occupy Wall Street proved that the American people were, at the very least, sympathetic to a movement that targets financial elites, just like the Populists and the Progressive movements did more than a century ago. A similar movement needs to be ignited and led by unions.

The nurses union (National Nurses United) is on the case, leading the charge for a “Robin Hood Tax” that would put a small fee on buying and selling all stocks, bonds, derivatives, futures, etc. The rest of the labor movement should join them.

But it will take more than unions. Every progressive group in the country should join the effort to bring high finance to heel. It’s time for all of us to realize that inequality did not fall from the sky. It’s not an act of god. It’s not the result of globalization (look at Europe where unions are larger and inequality is smaller). It’s the result of deliberate policies made by and for our economic elites, especially those on Wall Street.

Those same policies can be changed. But only if we have the persistence and the guts to take on the powerful financial vampires, sharks and hooligans that now lord over us. It will take nothing short of forging a long-term movement of unions in coalition with enviros, worker centers and every kind of progressive group imaginable. Good luck to all, especially the young activists who must light the way.

Les Leopold is the executive director of the Labor Institute in New York, and author of How to Make a Million Dollars an Hour: Why Hedge Funds Get Away with Siphoning Off America’s Wealth (J. Wiley and Sons, 2013).

 

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