Income Inequality and the Labor Force

The balance of power between employers and employees hasn’t been this out of whack

 since the robber-baron era. But amid an assault on wages, benefits, and the 

dignity of a good job, workers are striking back. 

FastCompany.com, May 3rd.

According to a January 22nd press release from the Bureau of Labor Statistics, “In 2020, the percent of wage and salary workers who were members of unions—the union membership rate—was 10.8 percent, up by 0.5 percentage point from 2019, the U.S. Bureau of Labor Statistics reported today. The number of wage and salary workers belonging to unions, at 14.3 million in 2020, was down by 321,000, or 2.2 percent, from 2019. However, the decline in total wage and salary employment was 9.6 million (mostly among nonunion workers), or 6.7 percent. The disproportionately large decline in total wage and salary employment compared with the decline in the number of union members led to an increase in the union membership rate. In 1983, the first year for which comparable union data are available, the union membership rate was 20.1 percent and there were 17.7 million union workers.” Numbers? But what do they mean?

The press release drilled down into one particularly harsh reality: “The union membership rate of public-sector workers (34.8 percent) continued to be more than five times higher than the rate of private-sector workers (6.3 percent).” So, if unions cannot protect workers because their presence in the private sector is fading fast, where can workers who typically used to be protected by organized labor find their saviors? Increasingly, the only power strong enough to counter big corporate America is the government, but members of one political party – Republicans – are bound to keeping the minimum wage low. 

The last amendment to the federal minimum wage – a most meager $7.25/hour – was made effective in 2009. While many states and municipalities have higher wages, improving the lot of ordinary workers has been forbidden territory for the GOP. They tried to repeal the grass-works healthcare-directed Affordable Care Act, but while that effort failed, they have successfully limited the scope of that statute, particularly in red states where expanding the Medicaid option was mostly rejected. President Biden has used an executive order to force federal contractors to apply a $15/hour minimum wage rate, but that requirement does not impact the vast majority of America workers.

Specifically, all proposed federal minimum wage increases since 2009 have been rejected in Congress because of a GOP vote. The argument was and is that we would lose massive numbers of jobs if wages rise too high, a claim that has yet to be meaningfully substantiated when looking at states where wage and salary minima have been raised. This falsehood continues to be the Republican mantra, joining the statistically discredited “trickle down/supply-side” economic theory, which has become GOP gospel. Meanwhile, the average major CEO compensation has risen to well above 300 times average annual worker pay.

Even as Joe Biden has pledged to reawaken the organized labor movement, corporate America is fighting back. Take the battle in Bessemer, Alabama where a union organizing movement within an Amazon distribution center drew national attention. Amazon through major resources into resisting that effort, fearing one union victory could ripple throughout their company. “As the region’s thriving economy started to fizzle out in the 1970s and ’80s (the Pullman plant closed in 1981), Bessemer, whose population is more than 72% Black, 22% white, and 4% Hispanic or Latino, with more than 25% living in poverty, was left searching for thousands of new jobs to fill the manufacturing industry’s void.” FastCompany.com. The Amazon plant offered hope.

Amazon pulled out all the stops, bending labor laws and suggesting job loss should the Retail, Wholesale and Department Store Union (RWDSU) prevail to make that distribution facility a union shop. When the vote was tallied, Amazon successfully staved off this nascent union effort, although the RWDSU has officially filed a challenge to that result with the National Labor Relations Board claiming Amazon’s victory was secured by violating law laws and regulations. Will a Biden-appointed NLRB reverse that vote? Time will tell.

But union militancy, angry over the disparity between worker pay and benefits when compared to the soaring stock market and billionaire worth, the widest disparity in wealth and earning power in American history, is rising. Take this tale, reported by FastCompany.com, in the airline industry, just one example of “we’re mad as hell and won’t take it anymore,” particularly relevant as America goes back to work as the pandemic begins to fade: 

“Sara Nelson was supposed to be accepting a lifetime achievement award from the AFL-CIO, the nation’s largest federation of unions. After a brief video played of her speaking out against sexism and harassment in the airline industry, Nelson, the president of the Association of Flight Attendants, took the stage on that January 2019 day and didn’t mention the issue once. Instead, Nelson delivered a stem-winder about the ongoing government shutdown that had begun on December 22. A budgetary impasse had been forcing 800,000 federal workers to report for duty without pay for 30 days. As agents from the Transportation Security Administration gradually stopped showing up for work, Nelson’s voice had grown louder in calling for the end of the stalemate, speaking on behalf of an alliance she’d forged of pilots, baggage handlers, and other airline workers whose safety was now at risk. She extolled the power of workers to push politicians to find a solution.

Then she uttered the seven words that have defined her since: ‘End this shutdown with a general strike.’…  The United States had not experienced anything remotely resembling a general strike—where work stoppages across key sectors can shut down the economy of a city or country—since the months after World War II. Everyone from coal miners and autoworkers to meatpackers and train operators—4 million people in all—ceased working in protest of diminished wages and lack of control over production. Today, the concept of a ‘general strike,’ if known at all in the U.S., exists mostly in myth, a faded tale from a bygone era of labor might.

“Here was Nelson making the myth real. It wasn’t simply that she had said the words; she showed workers how they could manifest the threat through action. As headlines blared her comments, air traffic controllers in New York started calling in sick in numbers large enough to disrupt flights out of LaGuardia airport. Once the prospect of a significant interruption of air travel became very real, Congress and President Trump acted quickly: The shutdown ended a few days later. ‘[Nelson] putting up the concept of strikes that disrupt production and cause a significant crisis for the political elite,’ says Jane McAlevey, the influential labor organizer and author, ‘is incredibly important.’”

When economic disparity between those performing an honest day’s labor and those who own the companies that employ them reaches the level we are experiencing today, something’s got to give. Trump populism suggested an improvement for workers, but the political results were dramatically the opposite. Can a new Democratic administration reverse this worker pay and benefit contraction? Can this be done without GOP cooperation in a gridlocked Congress?

I’m Peter Dekom, and a national focus on racial and social conservatism will not alter the most basic political maxim: “It’s the economy, stupid.”