SID 21068297

PP 103 Wealth and Poverty Paper 1

In 1955, more than a third of workers in the private sector beon!ed to a abor "nion#
$%eich, p#80, 2007& 'oda(, fewer than 8 percent do# $)aher, 2008& *abor "nions are the
representatives of workers who hep to en!a!e in coective bar!ainin! with empo(ers over
wa!es, benefits, and workin! conditions# 'he( !enera( hep members obtain hi!her wa!es,
better benefits and better workin! conditions# 'he dramatic decine in private "nion membership,
startin! from the 1980s is bad from the standpoint of the +merican worker, beca"se non,
"nioni-ation brin!s abo"t ower wa!es, !reater ine."ait( and ess voice for them# /nions can
and should pa( a ar!er roe in the econom( in terms of e0pandin! their individ"a scope of
inf"ence and e0pandin! "nioni-ation to other sectors of the econom(#
'he rapid fa in private "nion membership is bad for the /nited States $/S& beca"se it
h"rts +merican workers# 1irst and foremost, fain! eves of "nioni-ation has owered wa!es#
'his is beca"se some previo"s( "nioni-ed workers no on!er receive the hi!her "nion wa!e,
which is "s"a( abo"t 12#13 hi!her# 4n a broader eve, there is aso ess press"re on non,"nion
empo(ers to raise wa!es to match those offered b( "nioni-ed firms in order to retain their
workers# + in a, wa!es have decreased across the board# $5conomic 6oic( Instit"te, p# 202,
2009&
7e0t, the drop in "nion membership increases wa!e ine."aities between ower,wa!e,
b"e,coar, hi!h,schoo,ed"cated workers and hi!h,wa!e, white,coar, coe!e,ed"cated
workers# /nions t(pica( have a !reater impact in increasin! wa!es at the bottom and the
midde of the wa!e scae than at the top, and the workers in the former wa!e cate!or( are aso
more ike( to be represented b( them# 'here was a dramatic fa in "nion representation amon!
b"e,coar and hi!h,schoo ed"cated mae workers from 1978 to 2005, th"s essenin! the abiit(
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SID 21068297
of "nions to narrow the coe!e8hi!h,schoo and white8b"e,coar wa!e !ap# +ccordin! to the
2009 The State of Working America p"bished b( the 5conomic 6oic( Instit"te, this contrib"ted
direct( to a 2#2 percent rise in the coe!e8hi!h schoo wa!e differentia and 7#2 percent rise in
the b"e8white,coar differentia over the period#
1ina(, and most !enera(, the decine of "nion membership means that +merican
empo(ers now operate with fewer restraints and are better abe to dictate the terms of their
reationship with their empo(ees# 'he baance of power in the empo(er,empo(ee reationship
has !reat( shifted in the favor of empo(ers# +s a res"t, workers have !reater 9ob insec"rit(#
:ompanies "nenc"mbered b( "nions are free to et workers !o to maintain profits d"rin! to"!h
economic times, and to re( on remainin! or temporar( workers when the econom( recovers#
Indeed, this is e0act( what is happenin! in the /S now, where we are seein! the third strai!ht
9obess recover( since 1991# :ompan( profits have risen more than 12 percent since 2007, (et
firms are not re,hirin! beca"se ess and ess of them are bo"nd to "nion contracts to do so#
$*eonhardt, 2011& 4n the whoe, it can be seen that +merican workers s"ffer as a res"t of fain!
"nioni-ation, as the( have to dea with ower wa!es and more instabiit(#
4n the other hand, some ar!"e that decinin! "nion membership is !ood for the /S from
a competitiveness perspective# 'he ack of "nions enabes +merican prod"cers to c"t wa!e costs
and sta( ahead of their internationa competitors, whom the( are now more e0posed to d"e to
!obai-ation# 'his is especia( since wa!es and benefits are the sin!e ar!est cost of firms,
t(pica( acco"ntin! for 70 percent of tota e0penses# $%eich, p#82, 2007& +n i"stration of how a
red"ction in "nions wi hep the /S can be seen in the a"to ind"str(# In 2006, each of the ;i!
'hree a"tomakers $<enera )otors, 1ord and :hr(ser& paid their "nioni-ed b"e,coar workers
aro"nd =60 in wa!es and benefits whie >apanese a"tomakers in the /S were pa(in! their
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SID 21068297
non"nioni-ed empo(ees aro"nd =20# +s a res"t of this wa!e differentia, the ;i! 'hree
companies have been shrinkin! in market share whie the >apanese 'hree $'o(ota, ?onda and
7issan& have contin"a( !rown# +merican and >apanese cars are abo"t e."a in ."ait( and
reiabiit(, b"t the hi!h wa!e b"rden of +merican carmakers makes their pricin! "ncompetitive#
:onse."ent(, <enera )otors and 1ord have both cosed pants and aid off workers, showin!
too that "nioni-ation was in fact co"nter,prod"ctive for their workers who ended "p osin! their
9obs compete(# $%eich, p#82, 2007& 'h"s, it seems that a decrease in "nioni-ation wo"d be
!ood for /S compan( competitiveness and for +merican 9ob retention#
?owever, it sho"d be noted that present "nion members have been makin! concessions
on wa!es in times of economic downt"rn in order to retain their 9obs# 'herefore, it is "ntr"e that
the /S needs to have decinin! "nion membership in order to maintain its economic
competitiveness# 1or e0ampe, in 2010, the "nion at ?are(,Davidson accepted a two,tier
contract that free-es wa!es for e0istin! workers, owers pa( for new hires, di"tes benefits and
hires temporar( workers at even ower pa( and no benefits whenever there is a rise in demand
for bikes# 'he "nion reco!ni-ed the compan(@s need to reor!ani-e foowin! a decrease in
motorc(ce saes b( 20 percent from their peak in 2006# $/chitee, 2010& 1rom the above, we
see that the decine in "nion membership is in itsef not a A!oodB for the /S# 'he internationa
competitiveness of /S companies can be maintained even with the e0istence of "nions# 'he two
are not m"t"a( e0c"sive# + in a, the dramatic decine in private sector "nion membership is
bad for the /S, beca"se "nions hep improve conditions for a workers# 5ven in the ?are(,
Davidson case where it mi!ht appear that the "nion As"rrenderedB to the mana!ement@s wa!e
c"ts, the presence of a "nion to ne!otiate and tr( to ens"re the temporariness of s"ch an
arran!ement is a benefit of "nions that is sore( missed with "nion decine#
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Indeed, "nions sho"d pa( a bi!!er roe in the /S@ f"t"re, both in terms of e0pandin!
their individ"a scope of inf"ence, and in terms of e0pandin! "nioni-ation to other sectors of the
econom(# 1irst, "nions sho"d seek to increase eves of "nioni-ation within their specific
ind"str( $aso known as A"nion densit(B&, s"ch that the( are abe to brin! sweepin! sec"rit( to
the ives of a members and their famiies# 'he e0perience of the hote workers@ "nion in *as
Ce!as, *oca 226, i"strates this point# %o"!h( 90 percent of the empo(ees in the cit(@s ma9or
hotes are members of it, th"s !ivin! *oca 226 eno"!h evera!e to obtain si!nificant pa( raises,
heath ins"rance and c"ts in workoads# 'he hote workers in *as Ce!as now en9o( midde,cass
income and stabiit(, and form an economica( sec"re and vibrant comm"nit( in the cit(#
$)e(erson, 2002& +dditiona(, with the contin"in! shift towards a more service,oriented
econom(, there sho"d be more "nioni-ation of this sector# Service 9obs, "nike ones in
man"fact"rin! ind"stries, cannot be e0ported# 5mpo(ers cannot threaten to move their
operations to another state or co"ntr(# 'h"s, "nioni-ation wi be especia( efficacio"s in raisin!
wa!es, as empo(ers wi have ess evera!e in ne!otiations# +s can be seen from the above, there
is a ot more that "nions sho"d be doin!#
Despite poor "nion membership at present, "nions can take on this e0panded roe in the
/S# 1irst, if "nions "ndertake interna reform and consoidation within each ind"str(, the( can
become more effective# Dhen there is a sin!e "nion representin! a ar!e concentration of
workers in an ind"str(, the "nion wi be abe to foc"s on settin! standards for the entire ind"str(,
instead of havin! to batte one empo(er at a time# $;ai, 2005&
7e0t, empo(in! inventive abor tactics aso enabes "nions to more efficient( achieve
ambitio"s !oas# 'hese tactics are "sed with the "nderstandin! that companies in the !oba a!e,
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SID 21068297
"nder press"re to ower costs, are simp( doin! what the( think the( have to do to s"rvive# 'o !et
them to act in wa(s favorabe to "nions, "nions have to make these co"rses of action possibe for
them# 1or e0ampe, to !et ceanin! companies who empo(ed 10,000 9anitors in northern 7ew
>erse( to raise wa!es, +nd( Stern of the Service 5mpo(ees Internationa /nion promised a of
them that the "nion contract wo"d not kick in "ness more than haf the ceanin! companies
si!ned it# 'his resoved the fear of the ceanin! companies that if the( were to si!n the contract
first, the( wo"d soon be p"t o"t of b"siness b( the rest who did not si!n it# $;ai, 2005& 'h"s, as
can be seen, "nions can effective( brin! abo"t far,reachin! chan!e affectin! man( workers with
the "se of creative bar!ainin! techni."es that address empo(er concerns#
1ina(, potentia new aws wi aso aow "nions to pa( a ar!er roe in the /S@ f"t"re#
'he 5mpo(ee 1ree :hoice +ct is ike( to be introd"ced as a bi in the 112
th
session of
:on!ress# 'his e!isation wi make it easier for "nions to si!n "p members as it !ives "nions
the choice of method to do so# 6revio"s(, "nder the 19E5 7ationa *abor %eations +ct,
companies were !iven the choice of method for "nions to or!ani-e workers, th"s !ivin! them
opport"nit( to combat "nion or!ani-in! efforts# $)aher, 2008& Dith chan!es in abor aw, the
downward trend of "nion membership can be more easi( reversed, and "nions can pa( a ar!er
and more active roe in the workpace#
In conc"sion, the dramatic decine in private "nion membership is bad for the /S# +s a
res"t of it, +merican workers s"ffer from ower wa!es across the board, risin! ine."ait( and the
ack of a representative to ne!otiate with empo(ers# /nions can and sho"d pa( a ar!er roe in
o"r f"t"re# In the 1950s, "nions were abe to fo"rish beca"se bi! b"siness accepted bi! "nions#
Ind"str( was not worried abo"t pa(in! hi!her wa!es since the( benefited from oi!opoistic
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pricin! and a ack of competition# 'he( co"d simp( pass on an( wa!e increase in the form of
hi!her prices to cons"mers# $%eich, 5 1ebr"ar( 2011& In contrast, s"ch oi!opoistic markets
hard( e0ist toda(# Str"ct"ra shifts in the econom( towards more open and competitive markets
d"e to !obai-ation, technoo!( and dere!"ation have red"ced the roe of "nions over time#
?owever, "nions can and sho"d sti pa( a ar!e roe in fi!htin! for the ri!hts of workers b(
adaptin! to the new conditions and empo(in! inventive and creative tactics#
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Works Cited:
;ai, )att# A'he 7ew ;ossB# New York Times Magazine# E0 >an"ar( 2005#
5conomic 6oic( Instit"te# The State of Working America# Dashin!ton, D#:#F 5conomic 6oic(
Instit"te, 2009#
*eonhardt, David# AIn Drecka!e of *ost >obs, *ost 6owerB# The New York Times# 19 >an"ar(
2011#
)aher, Gris# A5conom( ?ei!htens Debate 4ver ;i to 5ase /nion 4r!ani-in!B# The Wall Street
Journal# 1 7ovember 2002#
)e(erson, ?arod# A*as Ce!as as a Dorkers@ 6aradiseB# The American Prospect vo# 15 no# 1# 1
>an"ar( 2002#
%eich, %obert# Supercapitalism. 7ew HorkF Cinta!e ;ooks, 2007#
/chitee, *o"is# A/nions Hied on Da!e Scaes to 6reserve >obsB# The New York Times. 19
7ovember 2010#
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