By Peter Dreier and Jessica Goodheart
This Labor Day, the numbers don't tell a happy story about the American worker. According to Jared Bernstein of the Economic Policy Institute, this has been the weakest business cycle on record for working families. Between 2000 and 2007, the median income of working-age households fell by more than $2,000.
And yet, workers' productivity has increased. Indeed, the U.S. economy is even more productive than it was in the late 1990s. Why aren't American workers reaping the benefits? A good part of it has to do with rising inequality. The distribution of income in the U.S. is more unequal today than at any time since the 1920s. In fact, the U.S. has the highest level of inequality, and the most poverty, of any industrialized country. And it's not a coincidence that the U.S. has the fewest workers covered by a union contract among all major affluent nations.
The imbalance of power means that during an economic downturn, working people have very little to fall back on. During the good times, they haven't shared in the gain. Now they're expected to absorb the pain of rising food and fuel costs and diminished opportunity. Workers in all economic sectors and demographic groups have been hit hard. In particular, the most vulnerable workers over the last eight years have been African Americans, Latinos, and families headed by single mothers. They suffered the biggest setbacks over the past eight years.
But there is also good news -- and not just that the Democrats are talking about the problem. Unions are organizing--and winning. Last year was the first one in decades in which union density -- the percentage of workers who are union members -- actually increased. And cities like Los Angeles have become hotbeds of union activity. Hotel workers, food service workers, truck drivers, airline service workers are all fighting for union representation and a better standard of living.
Earlier this year, in Los Angeles, 4,000 security officers represented by the Service Employees International Union, most of them African Americans, won their first contract and a nearly 40 percent increase in compensation. In late 2007, the United Food and Commercial Workers union, which represents nearly 70,000 grocery workers in Southern California, signed a contract with the major chains that eliminated a two-tier wages system, and kept grocery jobs from becoming Wal-Mart jobs. By the end of this year, more than a thousand workers at four hotels near Los Angeles International Airport will have signed union agreements dramatically raising standards.
For years, Los Angeles was considered an anti-union bastion. But in the past two decades, new leaders dedicated to mobilizing rank-and-file workers, many of them immigrants, have revitalized the labor movement in Los Angeles. That's good for workers, but it's also good for the region's economy.
Workers in Los Angeles County who are union members earn, on average, 27% more than non-union workers in the same occupations. In the service sector, where many of the working poor are employed, the wage differential is 64%. A study by the L.A.-based Economic Roundtable, released earlier this year, found that union workers have a significant and positive impact on the economy. Those extra $7.2 billion in wages earned by union workers in LA County create an additional 64,800 jobs and $11 billion in economic output. Yes, unions create jobs. Unions are actually pro-business. That's a story we rarely hear.
Los Angeles is certainly no workers' paradise. A recent study by the Los Angeles Alliance for a New Economy (LAANE) revealed that 30 percent full time workers in Los Angeles County earned less than $25,000 in 2007. One in five children in LA County lives in poverty. There is a vast and growing informal economy made up of workers who do not receive such basic safety net benefits as worker compensation, overtime, and Social Security.
Coalitions of unions, clergy, and community groups have been at the forefront of organizing to pass policies that raise standards for Los Angeles' low wage workers and preserve middle class jobs. The Los Angeles City Council has adopted living wage laws and project labor agreements (guaranteeing union jobs on government-subsidized development projects) that cover tens of thousands of workers.
LA offers a vision of what's possible. But the problem of low wage jobs cannot be solved at the local level on its own. America's workers need a shot in the arm from the federal government--and it's got to be more than the temporary fix of a stimulus check. After eight years of President Bush's neglect and mismanagement of the economy, it's a long list. But at the very top is the passage of the Employee Free Choice Act, which would reform the nation's outdated labor-managed laws that are woefully stacked against workers, and level the playing field between employees and employers.
According to Professor Kate Bronfenbrenner of Cornell University, one-quarter of all employers illegally fire at least one employee during union organizing campaigns. In 2005, over 31,000 workers were illegally disciplined or fired for union activity, according to the National Labor Relations Board. By the time the NLRB acts, it is often too late and the penalties too small. The leaders have found other jobs or the workers have been scared and demoralized.
In other words, there is nothing free and fair about the current system for electing union representations. Employers can corral workers during their work time and if they step over the legal line--which they routinely do--there is little to no recourse. A whole specialty field of union-busting consultants has emerged.
The Employee Free Choice Act -- which the House of Representatives passed last year and which Barack Obama has pledged to support -- would give workers a fair and direct path to form unions through a majority sign up. It would also help them secure a contract within a reasonable period of time, and toughen penalties against employers who violate workers' rights.
The statistics on poverty and income are, indeed, grim. But that doesn't mean we are paralyzed in addressing the problem. For working families, that means restoring the American Dream so that they can raise their families, buy a home, put food on the table, afford health insurance, take a vacation, send their kids to college, and retire with dignity and a decent pension. "Hope" and "change" are the mantras of this election cycle. By the time next Labor Day comes around, let's hope that America has changed its labor laws to that working people can have a strong voice in their workplaces, their communities, and their country.
Peter Dreier is Professor of Politics at Occidental College. Jessica Goodheart is research director at the Los Angeles Alliance for a New Economy.