US Must Empower Workers Again – 04/12/2021 – Paul Krugman

Pro-worker activists hoped the vote on organizing at Amazon’s warehouse in Bessemer, Alabama, would be a tipping point, a reversal in the decades-long trend of union decline. What the vote showed, however, was the continued effectiveness of tactics repeatedly used by employers to defeat organizational efforts.

But union activists must not give up. The political environment that gave free space to anti-union bosses may be changing – the decline in union membership was primarily political and not a necessary consequence of a changing economy. And the United States needs union renewal if we are to have any hope of reversing the spiral of inequality.

Let’s start by explaining why union membership declined in the first place and why it is still possible to expect a renaissance.

The United States once had a strong labor movement. Union membership increased dramatically between 1934 and the end of World War II. In the 1950s, about a third of non-farm workers were unionized. Even in 1980, unions made up about a quarter of the workforce. And strong unions have had a big impact even on non-union workers, setting pay rules and warning anti-union employers to treat their employees relatively well or face the organized movement.

But union membership fell, especially in the private sector, during the 1980s, and has declined steadily since.

Why did this happen? I often find statements that decline was inevitable in the face of automation and globalization – basically, that unions could not earn higher wages when employers had the opportunity to replace arrogant workers with robots or to move production abroad. But the evidence suggests something else.

Although we talk a lot about robots today, technological progress has actually been faster during the high tide of unionization than in recent years; output per man-hour increased twice as fast from 1947 to 1973 as after 2007. This did not prevent unions from having a major influence on wages.

The impact of globalization is also often overstated. About three-quarters of employment in advanced countries is in activities that cannot be transferred to other countries, a proportion that has not changed much over time.

In fact, Amazon is a case in point: while many of the products you can buy online are imported, Amazon’s position in the market rests on a huge warehouse system – like Bessemer’s – which employs hundreds of people. thousands of workers. And these warehouses cannot be transferred abroad; its goal is to keep inventory close to major markets, so Amazon can deliver things within days.

If the service sector were unionized, employers would not find it easy to replace the self-employed with robots or offshore production. In fact, other advanced economies like Denmark, which are as globalized as we are, still have a largely unionized workforce; even Canada maintains a much larger labor movement than ours.

Why are unions so weak in the United States? While the details are questionable, US policy has taken a rapid turn against unions under Ronald Reagan, encouraging employers to play hard against unionists. This meant that, as the center of gravity of the US economy shifted from manufacturing to services, workers in growing industries were largely disorganized.

And this decline in union membership has had disastrous consequences. In its heyday, unions were a powerful force for equality; its influence reduced general wage inequality and also reduced wage disparities associated with different levels of education and even race. Rising union membership appears to have been a key factor in the “great squeeze,” the rapid reduction in inequality that occurred between the mid-1930s and 1945, transforming the United States into a middle-class country.

Conversely, the decline of unions has played a major role in increasing inequality and stagnating wages. And workers lost their bargaining power as antitrust policies allowed companies to gain more and more market power.

One more thing: we don’t need strong unions just to level the playing field.

While it’s encouraging to see the Biden administration offering a reversal of the Trump administration giveaways to business, the fact remains that big capital has enormous political influence. It’s not just a question of campaign contributions. Corporate interests are also able to define the terms of the debate by their ability to offer lucrative jobs to former politicians and civil servants, generous support to groups of friendly thinkers, etc.

The organized workforce once provided a counterweight to corporate influence. Unions have never been able to match the power of the corporate dollar, but they could offer power to people – the ability to mobilize their members and their friends and neighbors in ways that businesses could not. And more than ever, we need this countervailing power.

So let’s hope that union activists treat Bessemer as a learning experience and not as a cause of despair. We still have to recover the strong unions.

Originally translated from English by Luiz Roberto M. Gonçalves

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