THE ENTIRE REPUBLICAN PARTY and
the ruling heights of the Democratic Party loathe unions. Yet they also claim
they want to build a strong U.S. middle class.
This makes no sense. Wanting
to build a middle class while hating unions is like wanting to build a house
while hating hammers.
Sure, maybe hammers — like
every tool humans have ever invented — aren’t 100 percent perfect. Maybe when
you use a hammer you sometimes hit your thumb. But if you hate hammers and
spend most of your time trying to destroy them, you’re never, ever going to
build a house.
Likewise, no country on earth
has ever created a strong middle class without strong unions. If you genuinely
want the U.S. to have a strong middle class again, that means you want lots of
people in lots of unions.
The bad news, of course, is
that the U.S. is going in exactly the opposite direction. Union membership has
collapsed in the past 40 years, falling from
24 percent to 11 percent. And even those numbers conceal the uglier
reality that union membership is now 35 percent in the public sector
but just 6.7 percent in the private sector. That private sector percentage is
now lower than it’s been in over 100
years.
Not coincidentally, wealth
inequality – which fell tremendously during the decades after World War II when
the U.S. was most heavily unionized – has soared
back to the levels seen 100 years ago.
The reason for this is
straightforward. During the decades after World War II, wages went up hand in
hand with productivity. Since the mid-1970s, as union membership has declined,
that’s largely stopped happening. Instead, most of the increased wealth from
productivity gains has been seized by the people at the top.
Even conservative
calculations show that if wages had gone up in step with
productivity, families with the median household income of around $52,000 per
year would now be making about 25 percent more, or $65,000. Alternately, if we
could take the increased productivity in time off, regular families could keep
making $52,000 per year but only work four-fifths as much – e.g., people
working 40 hours a week could work just 32 hours for the same pay.
So more and better unions
would almost certainly translate directly into higher pay and better benefits
for everyone, including
people not in unions.
However, the effects of unions
in building a middle class go far beyond that, in a myriad of ways.
For instance, the degree to
which a country has created high-quality, universal health care is generally
correlated with the strength of organized labor in that country. Canada’s
single payer system was born in one province, Saskatchewan, and survived to
spread to the rest of the country thanks
to Saskatchewan’s unions. Now Canadians live longer than Americans even as
their health care system is far cheaper than ours.
U.S. unions were also key
allies for other social movements, such as the civil rights movement in
the 1950s and 1960s. Today, people generally say Martin Luther King, Jr.
delivered the “I Have a Dream” speech at the March on Washington – but in fact
it was the March on Washington for Jobs and Freedom, and it was largely
organized by A. Philip Randolph of the Brotherhood of Sleeping Car Porters.
Among the other speakers was Walter Reuther, president of the United Auto
Workers.
And unions have many
other positive effects, including ones so subtle they never show up in history
books. Here’s one I personally know of:
Dean Baker, co-director of a
Washington, D.C. think tank called the Center for Economic and Policy Research,
or CEPR, is arguably the only economist in the U.S. who both recognized the
danger of the gigantic U.S. housing bubble in the mid-2000s and
warned about it loudly.
But Baker didn’t appear out of
nowhere. His first job in Washington was at the Economic Policy Institute,
which was founded
in 1986 with a five-year funding pledge from eight unions. His
foothold there made it possible for him to eventually co-found CEPR and make
his case on the housing bubble. (I know this about Baker because I
briefly worked for CEPR long ago.)
So the wise use of union
resources played a key role in the eventual creation of some extremely important
knowledge. Baker alone wasn’t able to get the political system to respond
before Wall Street shot the U.S. economy in the stomach – but it’s certainly
possible to imagine a different history, in which stronger unions created
perches for additional economists who cared about reality, and they worked with
stronger unions to organize to stave off our ongoing catastrophe. In other
words, if the U.S. had a stronger labor movement, the whole country could be
perhaps $10
trillion richer.
So enjoy the day off. But if
you’d like to see an American middle class again at some point before you die,
spend some time thinking about how to get more hammers into everybody’s hands.
