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Jobs, Wages and the Urgent Need for Unions

May 8th, 2010 · No Comments · Corporations and Industry, Economics, jobs, Labor, Politics, Populism

Where are the jobs? And where is new union legislation? We need both and we need them now.

We have a minimum of 15 million people out of work. We have an economy that created 230,000 jobs in March and 290,000 in April and unemployment still went from 9.7% to 9.9%. But what about the people who are still working? How are they doing?

Yes, it is true that 90% of people are still working, but the economy seems worse than that. It is also true that a lot of people are still spending money. What about, say, restaurants? Are people still dining out? That would tell us something about whether people who are working are doing ok.

In 2008, restaurant revenues were down 1.2% and last year when the effects of the economic slowdown really took hold, they were down 2.9%. This year, projections are for a 2.5% increase. Not a good sign of a flourishing three years. But when the economy was rolling, consultants like Technomics, the industry experts, said that restaurants were overbuilt then, by as much as 50% of the new locations. They thought that any slowdown could see up to 20,000 restaurants close. But 3% doesn’t sound as if that many closed last year, and 2010 is projected for a 2.5% increase.

So we are in a Great Recession but things are leveling off in the restaurant business that quickly? Apparently, people are eating well. But then we hear that the requests for food at food banks have quadrupled in the last year. How about the people who are losing their homes? They’re probably not dining out much. There is this uneasy feeling that we have that things don’t add up. Some people going out to eat and some going to food banks. Is it all about the Bush Great Recession or is it more than that?

It is more. Much more.

From 1992 to 2000, the economy produced 22 million jobs. The average annual pace of the GDP was 4 % per year. That is really humming along. Unemployment dropped down to around 4% and we were creating hundreds of thousands of jobs a month. Versus a good month in the Bush economy when unemployment was still only 5% but only 169,000 jobs were created. (May 2005, before the big bubble and before the big crash.) Right now, Obama just created 230,000 jobs in March and 290,000 jobs in April 2010, and the unemployment rate went up from 9.7 to 9.9%. So what’s the point?

We were knocking down jobs at 200,000 to 250,000 per month in literally our country’s most prolonged period of productivity and yet workers were not making any wage gains. That’s right. Workers wages began to fall in 1973 at the end of about 30 years of sustained economic growth. They never recovered. And they still had not recovered before this Recession started.

In 1992, when the economic upturn, which comparatively should probably be called an “economic boom,” wages actually continued to fall. The beginnings of any average wage increases during this whole period did not start until 1999, after many years of economic growth. Even by 1999, because wages had fallen so far, they were still less than the average wage in 1973. .

So, let’s make this clear. Wages did not return to pre-1973 real earnings even after the great economic growth of the Clinton years even though workers’ productivity had doubled. And why not? Several reasons.

When foreign competition and aging manufacturing plants and the severe lack of vision by CEOs, including curtailed R & D impacted sales and profits, it became common for people like Al “Chainsaw” Dunlap and others of his ilk, including people like Mit Romney, to move in and reduce the size of the company by reducing the workforce. They reassured stockholders that it would become leaner and meaner and more attractive as a stock and as a potential sale to a larger corporation.

In the 1970s, 80s and 90s, 30 million people were laid off in exactly this way. And only about a quarter of them ever made that much money again. The rest worked for less or never found employment. The problem became so severe that we even have a term for it, the “Disposable American” worker. But this isn’t the end of what corporations were prepared to do to thwart the rise of the middle class. The worst was yet to come.

Pick up a phone and call a customer service line for any corporation. You will frequently not be able to understand the person on the other end of the line. First, many of these people work contractors whose job it is to answer your questions and feed the information to a corporation. Those people are, as we know, often in India or some other English speaking country.

Or, you may contact a customer service department in this country and may not be able to understand the person on the other end of the line. The person will have an Hispanic accent and that person will be a minimum wage employee who may barely speak English but who cannot get any other job because he or she is only recently a legal alien or a recent citizen…working for minimum wage. It is estimated that one of every twenty workers in the U.S. today is an illegal alien. So where are the Democrats and Republicans in Congress and their investigators to crack down on the employers of these illegal aliens.

It’s all about money. American workers were told for many years that they needed better educations, re-training…to get back to those pre-layoff earnings. What they were not told was that people without any education at all but who would work for very little would be slotted for new jobs after systems were designed to fit them into easily “disposable and interchangeable” slots.

When manufacturing was at its peak as a part of the American economy, union workers had been 36% of the private industrial workforce. In the 1970s the economy began to sour and top managements at major corporations lost touch with the reality of world markets for steel, and autos and electronics. Global corporations from other countries were already making inroads into American markets and American corporations were cutting back rather than fighting back. It was the era of shut down and lay off.

As manufacturing decreased and corporations downsized, we lost 30 million jobs. When jobs were lost, many were union jobs. Unions, therefore, were also downsized. When that happened the Neoconservative think tanks were not downsized but “upsized.” Using some of the extra profits corporations made from fewer U.S. workers and more cheap labor from Mexico and in other countries, think tanks and lobbying groups stepped in and began a continuous barrage of propaganda to make sure that unions could never make a comeback.

American workers, throughout this entire period, from the late 1970s through 2010 have been working longer hours, losing more benefits, working for wages that do not keep up with the cost of living. Households today work an additional 6 weeks per year to maintain the same income they did 20 years ago.

It is not an accident, nor is it a coincidence that the membership of labor unions has fallen at about the same rate. It is deliberate. It is corporations acting for their stockholders and management, ignoring society.

In March of 2009, Senator Harken of Iowa introduced the Employee Free Choice Act, one that should have passed Congress with flying colors. By the time it should have been voted upon in the Senate, we had 60 Democratic Senators. We had a House of Representatives that could not be stopped and we had a public that was tired of losing jobs to Asia.

During his campaign, then Candidate Obama had been four-square behind new, stronger union legislation. But as soon as one month after the campaign, his staffers were backing away from it, and it fell down rapidly on the list of things to get done.

The Employee Free Choice Act is one of those things you need to take on faith. For example, if the Chamber of Commerce spent millions of dollars of corporate contributions trying to defeat health care reform, if the Heritage Foundation not only spent thousands of hours paid for by huge corporations to defeat health care reform, and then, just in case, spent thousands of hours to make the bill as weak as possible (which it is) and is still spending thousands of hours trying to persuade people that it should be repealed….then…if those two are deadly scared of the Employee Free Choice Act, should you not support it in any way possible? The answer is self evident.

For example, Cornell University did a study that indicated that, when workers try to organize, at least 25% of the time employers fire at least one worker to make the point that they do not want a union. In addition, whenever a company’s workforce tries to organize, on average 51% of companies threaten to close down the facility. It is called “capital mobility” and it is what has been used for 30 years to threaten unions. And it has worked.

It worked also because of misinformation spread by organizations like the Heritage Foundation. The Heritage Foundation says that only 2.7% of employers ever fire someone for union organizing when studies show that it is 25%. Heritage says that unions win 60% of elections. The fact is that only one out of five organizing efforts succeed in getting to an election. If they do get there, naturally there could be better odds. Even so, it is obviously much less than 20%, not 60% as Heritage implies.

Heritage says that the rule that a union and employer must go into binding arbitration on their first contract if they cannot agree is a bad idea. That may be because 44% of all union organizing fails because employers simply stall on a contract until the union members finally have to give up. Smithfield meat processors stalled for 16 years before coming to a contract. Not many organizing groups have members who will hang in there for 16 years. 

All these tactics have worked in the auto industry and in the apparel industry and the electronics industry among others. Companies say basically that if you try to unionize, we will either close the plant or move it to another state or country. It is that simple. It is a huge tool in fighting unions. As late as 1980, union membership was 23% of the workforce. It is half that right now. This is intolerable for the workforce and for the economy.

The Employee Free Choice Act will end intimidation on the part of employers. It will allow the organizers to pass around cards to workers that ask if they would like to have a vote on whether to organize. If they do, if a majority of workers does want a certain union to represent them, then it is done. Or if a minority say that they are interested, then there can be a secret ballot. The employer needs to begin negotiations with the union within 90 days and if nothing comes of this, then an independent arbitration board will make decisions. If there are any repercussions or reprisals against workers, the employers can be subject to severe penalties.

Anti-Labor groups have raised close to $100 million dollars to fight against this law, including $30 million from just one Right Wing donor. On one side are the Liberals in Congress and the Labor Unions, on the other side are the Neocons in Congress, and people like Jesse Helms, Tom DeLay and Grover Norquist, Whole Foods, the National Association of Manufacturers and WalMart, Home Depot and FEDEX.

Labor needs a fair playing field. Approximately 80% of all companies when faced with a workforce that wants to unionize hires a union avoidance consultant. Plain and simple, these are union busters. Under present NLRB rules, for example, they can come in to a company, spend a number of days or weeks there as workers and discover who the leaders are. They will then use various techniques, including differing types of intimidation to reduce the number of favorable votes down to an amount too few to pass anything. It is a $4 billion industry right now.

If we want to build manufacturing and a firm foundation for the future of this country, we need to pass the Employee Free Choice Act. Only one in five attempts at organizing is ever brought to contract stage under the current National Labor Relations Board procedures. Meanwhile, 73% of Americans approve of this new procedure for organizing unions and over half of all employees say that they would vote to have a union if one were being organized.

It is time to pass some strong labor legislation.

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