In part one of my essay on unions (Sept. 2), I showed how union strength coincided with workers getting their largest share of the postwar U.S. economic boom from the 1950s to the 1970s. Since then, unions have become much weaker while economic inequality has grown.
The seeds of union decline were planted in 1946, when voters, tired of 14 years of Democratic rule and concerned about economic uncertainty created by a wave of strikes after the war (unions had largely honored a no-strike pledge during the war), elected a Republican Congress. The Republicans quickly passed the Taft-Hartley Act (in 1947, over Truman’s veto), which restricted some union tactics (it outlawed closed shops, e.g.) and allowed states to pass “right to work” (RTW) legislation that outlawed agency fees (the subject of the Janus decision). Within a year, 12 states (mostly in the South) passed these laws (critics call them “right to work for less” laws); they weakened unions and allowed those “business-friendly” states to keep wages low to attract industry away from areas with high rates of unionization (such as the textile industry in New England and the auto industry in Michigan). In 2012, even historically pro-labor Michigan passed RTW legislation (bringing the state total to 24), demonstrating how unions had weakened. The tide may be receding, however; this past year, after the Missouri Legislature passed RTW legislation, labor activists took it to the voters and stopped it with a referendum (and 67.5 percent of the vote).
Two other factors contributed to the decline of unions after their 1950s peak.
First, in the 1960s and ‘70s, countries devastated by the war (especially Germany and Japan) had largely recovered, and challenged U.S. global economic dominance. The 1959 strike against U.S. Steel led steel consumers to import Japanese steel, which previously had been considered inferior to American steel, but turned out to be a suitable substitute. Likewise, in the 1970s, rising gas prices and fuel shortages led to increased demand for smaller, fuel-efficient cars that Germany and Japan had produced for decades. Jobs went overseas as imports grew faster than exports (the last U.S. trade surplus was in 1975).
The second factor was improved technology that allowed companies to replace labor with machines. In the large industries that had driven the growth of unions (coal, steel and automobiles), productivity was dramatically improved by things like continuous mining machines, strip mining, mountaintop removal and longwall mining in the coal industry; automated welders, robots and “just in time” manufacturing in the auto industry; and the use of more efficient mini-mills in steel. Increased labor costs created by unions encouraged owners to invest in labor-saving technology, dramatically improving productivity but reducing employment (and the power of unions). When the UAW struck GM in 1970, 400,000 workers struck for two months. In 2007, the GM strike involved 73,000 workers and lasted only two days. While many blame unions for this loss of jobs, without innovation we’d still be mining coal with a pick and shovel.
When Ronald Reagan was elected president in 1980, his business-oriented administration was very anti-union, which he demonstrated in 1981 when the air traffic controllers union (PATCO) went on strike; he fired them all, breaking the strike. Unions need popular support to exert their political power, and the air traffic controllers did not get much because they were already paid better than most and they struck during a recession when many people were happy to have jobs. Ironically, while Reagan became famous for busting unions, he had actually been the president of his union (when he was a Democrat), the Screen Actors Guild. PATCO had actually supported him for president.
The only thing that has prevented unions from becoming irrelevant has been the growth of public sector unions (teachers, police, firefighters), which started in the 1960s, and was most recently evident in the teachers’ led demonstrations against low teacher pay that started in West Virginia last spring. In 2017, 34.4 percent of public sector employees were union members compared to only 6.5 percent of private sector employees.
The decline in unionization has been directly correlated with the rise in inequality. Prior to the early 1970s, increased economic productivity was shared between workers and owners; since then, almost all the productivity gains have gone to the owners, as workers’ wages have stagnated. The average hourly wage (nonmanagement, adjusted for inflation) has even fallen slightly in the last 45 years, from a peak in January 1973 of $23.68 compared to $22.65 today. Compare this to CEO pay, which has skyrocketed; CEOs in 1980 made 42 times the pay of the average worker; in 2016, they made 271 times the pay of the average worker. Looking at the upper class more broadly, in 1980 the ratio of earnings between the top 1 percent, and the bottom 50 percent was 27:1; in 2016, it had climbed to 87:1. While most workers recognize that top management will earn higher pay, it is hard to understand why top management’s compensation difference is 5 times greater today than it was 40 years ago.
Kent James is an East Washington resident and has degrees in history and policy management from Carnegie Mellon University.