Will Rising Inequality Bring Unions Back?

The art of the strike makes a US comeback in 2015.

The business pages are now filled with stories you thought had gone out of fashion years ago: labor disputes are back with a vengeance. OK, so the level is nowhere near the peak, but compared to the past few years, there is definitely an upswing. It is only natural for unions to think that the long-term trend of declining membership--especially in developed countries--will be reversed during a time of rising inequality. After all, worker discontent is fueled by stagnant-to-declining wages juxtaposed with immense wealth generation as stock markets zoom away powered by cheap money. In a situation where the lion's share of returns goes to capital but not to labor, the unions see potential for resurgence.

Me? I think that rational folks weigh union membership as a cost-benefit proposition. The Eighties onwards have been a labor-hostile era, with companies putting subtle and not-so-subtle pressures to discourage unionization (think Wal-Mart). The vicious cycle for unions has been that their bargaining power diminishes as membership falls in this numbers game, giving workers ever fewer reasons to join. And so on and so forth. You also have to factor in perceived declines in notions of solidarity. This is where it gets interesting: as mainstream US political parties harp on inequality, can "mainstreaming" this issue result in greater union membership?

Union leaders are taking advantage of a tightening labor market and favorable political environment. With middle-class wages stagnating and the rich getting richer, income inequality has become a rallying cry for Democrats and Republicans alike. Reviving opportunity for all resonates with Americans who feel left out as growth picks up and the market notches record highs.

“Employers seem to think that they can push unions, the roots of the American working class, off a cliff,” said Dave Campbell, whose union local represents oil-terminal workers at the Port of Long Beach. “Well, these corporations have made a significant miscalculation in our ability to fight back. There’s a lot of labor strife now, and they could have a major confrontation on their hands.”

However, the recent rise in strikes may indicate that organized labor is regaining its moxie...

In recent years, however, globalization and weak economic growth have hollowed out union power. In 1979, 21 million American workers belonged to a union. By last year, 14.6 million did. In the 1980s, strikes averaged 75 a year, according to the Bureau of Labor Statistics. Last year, there were 11. Harley Shaiken, a labor professor at the University of California at Berkeley, has long watched the ebbing of union power and wondered if walkouts were an endangered species. The surge in labor unrest has caught his attention.

Shaiken says the main catalyst is inequality, considered the defining economic challenge of this era by everyone from President Barack Obama to Republican presidential aspirant Jeb Bush. Slow wage growth figures in deliberations by Federal Reserve officials as they consider whether to raise interest rates above zero this year. Even with unemployment near the lowest level since 2008, central bankers have expressed concern that low wages could restrain household spending. 

What's always puzzled me is that while the modern labor movement is founded on the idea of an international workingman's organization, American unions continuously harp on the evils of globalization. That is, they would rather see benefits stay at home rather than go abroad to help their less well-off brethren:

“Workers are seeing the high pay chipped away and they’re concerned about outsourcing,” said Shaiken, the Berkeley professor. “It’s not that they’re lower paid, but they gave up a lot to get there. That’s why you’ve got this collision.” For the first time in a generation, the labor movement is aligned with millions of Americans who don’t belong to a union but feel marginalized.

“This is a political opportunity for organized labor,” said Western, the Harvard professor. “Although the inequality discussion is opening up a space, the conversation has so far not really addressed the problems of parents trying to raise their children, trying to guarantee them a better future.”

While the logic for increased union participation is evident, it remains up to unions to demonstrate that they can secure real benefits for workers from corporations in this day and age. That, I am afraid, is a more difficult task than simply arguing that inequality is on the rise.