Audit Notes: Decline of Labor Edition

Unions, inequality, and billionaires versus organized workers

The New Yorker’s John Cassidy writes a smart post on the aftermath of labor’s big defeat in Wisconsin and what it shows about “America’s Class War: Billionaires Against the Unions.”

Exploiting public concerns about debts and deficits that have resulted from an economic downturn largely brought on by Wall Street malfeasance, Republican politicians, backed by wealthy individuals and corporations, are looking to cripple the unions and balance local budgets on the backs of low- and middle-income workers.

In short, it’s a class conflict. On one side are right-wing billionaires like the Koch brothers and Sheldon Adelson, who exploit quirks in the campaign-finance laws and anxiety among taxpayers to further their conservative agendas, and shadowy corporate-financed organizations, such as the American Legislative Exchange Council, or ALEC, which helped draft many of the anti-union bills that Republican statehouses have adopted. On the other side are teachers, janitors, municipal administrative workers, cops, and firemen.

Over the years, to be sure, some public-sector unions have adopted restrictive practices and negotiated retirement agreements that can no longer be sustained. (At a time when New York City is laying off teachers, can it justify paying retired policemen and firefighters up to two-thirds of their peak salaries after just twenty years of service? I don’t think so.) But Republicans like Walker aren’t merely looking for concessions from the unions: they are out to destroy them.

Yes, but it’s only fair to note that 53 percent vote in Wisconsin contained very few billionaires—and quite a few union households.

— Here’s another paragraph from Cassidy’s piece:

Even when the economy is growing, there are constant conflicts about who gets what. The argument of free-market economists that productivity determines wages and profits is mistaken. Productivity determines the over-all size of the pie. How it is distributed depends on a variety of factors, including relative bargaining strength, international competition, labor laws, and the results of elections. Economics and politics aren’t separate spheres. They are two sides of the same coin, something that is particularly evident in the treatment of public-sector workers. With taxpayers footing the bill, every labor contract has political connotations.

And here’s a chart from the liberal Economics Policy Institute via Felix Salmon:

Correlation is not necessarily causation. But that’s an awful lot of correlation, and the declining power of labor is certainly one of the biggest reasons why income has concentrated at the top, which controls most of the capital.

Make sure to watch EPI’s brief video explaining the history behind the numbers:

— Finally, here’s an examination in The New Republic by labor activist Rich Yeselson on how and why labor power collapsed over the last thirty-plus years.

No, the real underlying story is that unions are losing their institutional legitimacy in modern America. The problem isn’t that most people hate unions. The problem for unions is that most people don’t care about them, or think about them, at all…

Most important, they knew, for better or worse, that unions had power. Sixty years ago, the UAW or the Mineworkers or the Steelworkers, not only deeply affected crucial sectors of an industrial economy, they also demanded respect from broader society—demands made manifest in the “political strikes” they organized, whether legally or not, to protest the issues of the day. Millions supported these strikes, millions despised them—but nobody could ignore them. The charismatic leaders of these unions, men like Walter Reuther and John L. Lewis, were household names to most Americans. Jimmy Hoffa was thought by many to be a “thug”, but his union, the Teamsters, could stop interstate commercial transportation in the country…

It’s this head scratching perplexity about the very point of unions—not the corporate and rightwing anti-labor rage, which is eternal—that is snuffing unions out like the air. Decline has begot decline in an endless feedback loop—the workers don’t have familial or community links to unions anymore and, thus, do not think unions are, even potentially central to their lives; the middle class professionals and writers aren’t, via the genuine power of a Hoffa or Reuther and their membership, exposed to a culture of union power anymore; and the politicians aren’t nearly as dependent on the money and votes of union members.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum. Tags: , , , ,