Wednesday, 23 March 2011


Is a pluralistic society best served with a weak, docile, and/or politically dependent labor movement? Was Franklin D. Roosevelt wrong in strengthening trade unionism as an integral part of his New Deal, or was Ronald Reagan correct in trying to weaken, and in some cases dismantle, trade unions? To what degree was the American social structure advanced (middle class and workers) and democracy strengthened as a result of FDR pro-union policies and to what degree did the American social fabric disintegrate from Reagan to the present? 

Two years after the Wagner Act (1935) legalized collective bargaining amid the depression and against powerful political and business opposition, a public opinion poll indicated that at least 70% of Americans favored trade unionism. The Great Depression had radicalized a percentage of the American people. FDR co-opted them through trade unions (especially through the CIO, given that the AFL was much more conservative/status quo) that became a permanent popular base of the Democrat party.

The late 1930s and early 1940s marked the zenith of American trade unionism. The same is true of Latin American trade unionism that the CIO supported, but not for Europe struggling to recover from WWI, then economic depression followed by another global war. The Cold War politicized the labor movement not only of the US, but of the entire world that was divided into pro-US, pro-Soviet, or non-aligned.

Unions were only useful as tools of regimes toward their political ends, something that businesses generally supported. In the case of the US, the unions' role was to contain worker radicalism, help foster conformity to the market economy, and align workers behind the anti-Communist campaign. Radicalism entailed Communism, thus the unions actually undermined their own cause as they only stressed 'bread and butter issues' while backing mainstream bourgeois political parties. This was not only in the US but in Latin America and Europe during the Cold War.

Co-opted by government, American trade unions became complacent. With some like the Teamsters, the chronic problems of corruption and ties to organized crime contributed to the stigma that trade unionism is to be feared. Corruption notwithstanding, the more serious issue for the AFL-CIO and organized labor in general was that it became bureaucratized and lost the grass roots support it enjoyed in the 1930s when political and social conditions favored unions. There were few efforts to organize service sector workers, although the economy was changing fast.

As the US economy was leveling off in the 1960s and began the course of a long decline after Vietnam, the media, conservative politicians, journalists, and think tanks and especially businesses and business schools in colleges blamed unions for the lack of competitiveness. Every time the economy suffered a recessionary cycle and unemployment rose, it was the unions' fault because if they did not make outrageous demands of employers, more people would have jobs and America would be competitive. Although workers in automotive, electrical, and select areas including high tech did well in terms of income in the second half of the twentieth century, the long decline in living standards after the recession of 1986-87 negatively affected those sectors as well.

In a recent public opinion poll, about 40% of Americans have positive view of unions, the lowest in the last seventy years. The media and politicians have convinced the public that when government bailed out the automotive industry it was throwing money at overpaid UAW workers, not the overpaid and bureaucratized management. Let us accept that as true. Were union workers at fault for the hundreds of billions thrown to bail out banks and insurance companies? AIG alone cost US taxpayers $160 billion and the company was offering bonuses of $165 million to its executives with taxpayer money until the the press caught the story.

When right-wing governors from Wisconsin, Ohio, Maine and other states complain that there is no money, they blame the unionized public employees and it is just the beginning of an assault on labor and the middle class. There is not a word about all the tax breaks that states give to corporations to come to the state, nothing about the infrastructure costs designed to attract and accommodate corporate interests, nothing about the fiscal structure that favors the wealthy and corporations. Let us assume there were no unionized public workers in Wisconsin, would the state have escaped the current crisis, or is it the case that the fanatic right-wing governor and businesses want unionized workers to bail them out by cutting benefits and driving wages as close to minimum as possible?

This is not to excuse the institutional abuses of the politically co-opted American trade union movement or the individual trade union officials that have not always served the rank-and-file or used resources to recruit in the low-paid service sector. However, the larger question that must be asked is whether a democratic society is best served with weak or non-existing trade unions simply because capitalism is predatory and because Mrs. Smith and Mrs. Jones from suburban America can't order a cut of veal to their specifications after 6:00 pm, but cannot owing to unionized butchers? Have we really sunk this low in our values that in the name of consumerism we dismantle institutions that are the pillars of American society, and have very little to do with the recession of 2007-2011?

The American people have been bombarded by a vociferous anti-labor campaign in the last three decades, and the result is that there is a large number who are convinced that if unions go away America will become what it was under Truman and Eisenhower. The 'labor aristocracy' issue is a reality, namely, organized workers make more money as they are usually more skilled, usually in manufacturing, than unorganized workers mainly in the service sector. 

Is the problem that a small percentage of workers make more than minimum wage. or should those making minimum wage earn income that reflects the value of their labor and contributions to the economy? Unfortunately, the media, business and politicians have brainwashed the masses into believing that economic recessions are not built into the market economy but that it is the fault of 'overly-paid union workers', as opposed to the 'underpaid CEOs' making 400-500 times more than the average worker.

In the last thirty years, unions were reluctant to go on strike and to confront capitalism's predatory practices. When workers struck, employers with political support hired non-union workers. Hence, the view of many Americans that the unions cannot protect jobs, when in fact employers were firing union labor as well as shipping jobs overseas to secure much larger profits. As far as the media, think tanks, business schools, and politicians were concerned, the solution was to pay a worker in Cleveland lower wages to compete with workers in Guatemala, India, etc. Globalization drove the final stake into the heart of trade unionism, not just in the US but across the world as businesses were threatening each location with relocation of their operations. 

Are the American people willing to support populist right wing governors and mayors, and sacrifice the long-standing democratic tradition of Jefferson, Lincoln and FDR? In the broader spectrum of things during the last three-four years of the US (and global) recession, amid big business corruption (Lehman, AIG, Goldman Sachs, Citi, Bank of America, etc.); amid all the crimes by the wealthy protected under the political cloak of government that they finance with campaign contributions; amid all the institutional hurdles to fostering a rationalized market economy; amid declining competitiveness; amid all that and more, are trade unions the real problem in the economy and society at large; are trade unions the root cause of America's economic calamities, or is their decline a manifestation of a systemic crisis that needs a new 'New Deal' political solution?

An interesting historical fact is that the Great Depression, coming just a few years after WWI and the Bolshevik Revolution radicalized American workers, while the recent global recession taking place during the Iraq and Afghanistan wars has actually polarized Americans without necessarily resulting in the kind of radicalization of the 1930s. Will the social fabric be healthier and will America as a society be better off in the 21st century during the twilight of organized labor? Let us assume that by magic trade unions are no more when we wake up tomorrow, will the economy perform a miracle? Yes, for the top 10% and misery for the vast majority.

Even amid the twilight of trade unions that helped build America, we continue to endure inane propagandist arguments lacking any empirical foundation that society's problem rests with unions? The day may come when America will have very few or no unionized workers, but that day America will be poorer and far less democratic than it was under FDR, JFK, or even anti-union presidents like Reagan and Bush - father and son. Of course, one never knows how social dynamics evolve in a society as status quo as the US, and how social forces in the 21st century may create a new wave of pro-union sentiment.

1 comment:

Anonymous said...

Novice economics states that unemployment must be maintained at 2% in order to have unimpeded finance flow.

Of course, this is under the supply and demand model which is directly linked to the Federal Reserve and artificial fluctuation.

With that in mind, the synchronization of economics is clearly being shifted.

The global need of a work force to produce the monetary funds that pay for regional taxes of those who cannot or will not pay (such as with China's provinces and those provinces who do not present centralized government with taxes in order to fulfill their obligations to the WTO) was determined to be from the west several years ago.