US needs to empower workers again – 12/04/2021 – Paul Krugman

Pro-worker activists hoped that the vote on unionization 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 persistent effectiveness of the tactics used repeatedly by employers to defeat organizational efforts.

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

Let’s start by talking about why union membership has declined in the first place, and why it is still possible to expect a rebirth.

The United States has already had a powerful labor movement. Membership in unions grew greatly between 1934 and the end of World War II. In the 1950s, approximately a third of non-agricultural workers were unionized. Even in 1980, unions represented approximately a quarter of the workforce. And strong unions had a big impact even on non-union workers, setting pay rules and putting anti-union employers under notice that they must treat their employees relatively well or face the organized movement.

But union membership plummeted, especially in the private sector, during the 1980s, and has continued to decline ever since.

Why did this happen? I often find statements that the decline was inevitable in the face of automation and globalization – basically, that unions could not earn higher wages when employers had the option of replacing arrogant workers with robots or moving 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; production per worker-hour increased twice more quickly from 1947 to 1973 than after 2007. This did not prevent unions from having a major influence on wages.

The impact of globalization is also often exaggerated. 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 typical case: while many of the products you can buy online are imported, Amazon’s market position rests on a huge warehouse system – like Bessemer’s – that employs hundreds of thousands of workers. And these warehouses cannot be transferred abroad; its goal is to keep inventories close to major markets, so that Amazon can deliver things in a few days.

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

Why are unions so weak in the USA? While the details are debatable, American policy has taken a swift turn against unions under Ronald Reagan, encouraging employers to play tough against unionists. This meant that, while the center of gravity of the American economy shifted from manufacturing to services, workers in growing sectors were largely disorganized.

And this decline in union membership has had dire consequences. In its heyday, unions were a powerful force for equality; its influence reduced the general inequality of wages and also reduced the wage disparities associated with different levels of education and even race. Increased union membership appears to have been a key factor in the “Great Compression”, 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 played a big role in increasing inequality and wage stagnation. And workers have lost bargaining power as antitrust policies have allowed corporations to gain more and more market power.

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

While it is encouraging to see the Biden government propose a reversal of the gifts given by the Trump administration to companies, it is still true that big money has enormous political influence. It is not simply a matter of campaign contributions. Corporate interests are also able to define the terms of the debate through their ability to offer lucrative jobs to former politicians and officials, generous support to groups of friendly thinkers, etc.

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

So let’s hope that labor activists treat Bessemer as a learning experience, not a cause for despair. We still need to recover the strong unions.

Originally translated from English by Luiz Roberto M. Gonçalves

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