In his new book, The Big Squeeze: Tough Times for the American Worker, Steven Greenhouse documents the current plight of our nation’s working people, especially those at the bottom. He cites their low and stagnant wages at a time when executive compensation soars, their decreasing health care insurance and pensions, their increasing job insecurity and their experience of weak public support for their rights as workers. Specifically, Greenhouse describes the struggles of security guards, janitors, hospital and hotel workers—those who perform service jobs that are poorly paid but essential and who experience broad opposition when they try to join a union. What’s wrong?
Although the classic case for capitalism assumes a free marketplace, equal bargaining power on both the supply and the demand sides and freedom from an outcome-controlling power on either side, its assumptions do not neatly fit reality, especially for workers with little education and few well-compensated skills. In labor markets without unions, each worker is left to face, alone, an employer who has significant control over his or her employment, compensation package and working conditions.
In an employees’ market, where the supply of jobs is greater than the number of workers, an employee could quit one job to look for another, better job. That is how free market competition is supposed to work, with the various employers considered to be equals. Or one could find oneself in an employers’ market, where jobs are few and the number of workers is large. Unions, with their emergency funds, demands for standards and experts in collective bargaining, work on behalf of laborers in all types of markets.
The economist John Kenneth Galbraith developed a theory that explains in part how labor unions help to equalize the marketplace. While studying the tendency of an economy dominated by large corporations to suppress competition, he realized that the largest would dominate unless there were some “countervailing power,” as he called it, to restrain them. (Galbraith reasserted this thesis, first articulated in 1952 in American Capitalism: The Theory of Countervailing Power, in his introduction to a 1993 edition of the book.) By then Galbraith recognized that globalization has diminished the role of exploitative market power in much the same way that supermarkets restrain the power of huge food companies. They can do this because the supermarket chains are more nearly equals in bargaining with the food suppliers. Likewise workers are helpless unless they affiliate with larger unions. Galbraith wrote, “The trade union remains an equalizing force in the labor markets.” The union’s raison d’être is to serve as a “countervailing power.”
For more than a century the Catholic Church also has recognized a positive role for labor unions. The basic principles of Catholic social teaching (respect for human dignity, the right of individuals to participate in decisions that affect them, solidarity in human community, co-responsibility for the common good, subsidiarity and the dignity of all workers) form a moral basis for the right of workers to organize, which is rooted in the social nature of human beings and their responsibility to participate in shaping the common good. The church regards unions as an indispensable element of social life today (see sidebars). Still, many Catholic institutions, like hospitals, struggle to balance the needs of their workers with the institution’s service to the poor. Labor advocates are baffled whenever workers seeking unionization within Catholic institutions are actively discouraged or penalized by their employers.
Perceptions and Obstacles
If unions are vital to healthy capitalism and if Catholic teaching supports them, why are unions held in such low regard by the public? The Economic Policy Institute, in its publication The State of Working America:2006/2007, notes a decline in the bargaining power of unions as their membership levels have fallen. The institute links the erosion of union influence to difficult trade pressures, a national shift from manufacturing to service industries, ongoing technological change, employer militancy and changes in the way labor law is being implemented currently in the United States.
Yet their data also show measurable benefits for workers in unions, especially for those at the bottom of the wage scale. For example, the 2005 differential between union and nonunion wages for comparable workers was 14.7 percent overall—8.4 percent for men and 10.5 percent for women. For African-Americans the gain was 20.3 percent, for Hispanics 21.9 percent and for whites 13.1 percent, indicating that unions help close wage gaps. Minority women in unions have roughly twice the gains of their white counterparts. Union workers are also more likely to have health insurance benefits and to have better coverage than nonunion workers. The percentage of union workers with pensions is almost twice that of nonunion workers, and those in unions report more time off.
Nonunion employees profit indirectly from the work of unions when employers, for example, improve the compensation and benefits they offer in order to avoid unionization. Also, unions have pioneered standards and practices that have become industry-wide norms, and unions continue to be innovative in the areas of childcare, work-time flexibility and sick leave.
The reverse is also true. When labor’s public influence is weakened, the ill effects can be felt throughout society in the form of economic hardship, job insecurity, the fraying of the social safety net and the destruction of the American dream for thousands of workers. And as the income gap grows between society’s most highly paid workers and the vast majority of workers, some leaders are calling attention to the skewed power balance such inequality brings to the workplace.
Tilted Against Unions
In What Workers Want (1999), Richard B. Freeman, a labor economist, and Joel Rogers, a political scientist and lawyer, studied a national sample of 3,048 adults working in U.S. private companies or nonprofit corporations of more than 25 employees. Their data indicated that 44 percent of private-sector American workers wanted to be represented by a union, while only 14 percent of the sample were union members. The workers who wanted a union but had not joined one were disproportionately black, reported poor labor-management relations, and had attitudes toward independence of workplace organizations like those of union members. One can conclude that workers do want a voice and representation, and that both employers and society would benefit from helping them get it.
How does the workplace become tilted against unionization today? It may begin with an employer, but current law also contributes. So-called “employer militancy” is one cause of the decline of union bargaining power, according to the Economic Policy Institute. Freeman and Rogers write: “The law de facto reduces the chances of successful worker organization.” In From Blackjacks to Briefcases (2003), Robert M. Smith documents the 150-year-old struggle for labor rights in the United States. Describing the rise of business power over labor after a period of cooperation during World War II, Smith notes that new union-busting agencies with labor relations specialists have affected both national labor law and the climate for workers considering unionization. Such agencies operated within a legal framework set up by the Wagner Act, proliferated and have effectively served employers who seek to avoid unionization.
The past excesses of some unions also played a role. During the late 1950s Congress found not only unscrupulous tactics by some labor unions but also criminal infiltration of prominent unions. By the late 1970s, the public mood had soured on unions, and efforts to suppress or exclude them aroused less concern. Political and social factors, especially Ronald Reagan’s breaking of the air traffic controllers’ union, fueled a pro-business environment.
According to a report issued by the N.L.R.B., in 1980, the unions began to see that the unionization processes conducted under the supervison of the N.L.R.B., which had been set up by the Wagner Act to fairly regulate these processes, were leading to outcomes that were unfavorable to the unions. In 1970 organized labor had won 57 percent of representative elections; by 1980 the number had dropped to 46 percent. Organized labor won only 27 percent of de-certification elections. Because of federal appointments to the N.L.R.B. that favored business, the same skewed pattern has continued, making unions less willing to accept the process as fair. In N.L.R.B. certification processes, employers frequently seek to defeat unionization efforts by using delaying tactics and challenging whom unions can represent. Penalties for illegally pressuring employees have been minimal. And courts at various levels, even up to the U.S. Supreme Court, decided to allow replacement workers during a strike and to expand the exclusion of supervisory workers from bargaining units. Labor sees the current operating framework as unfair.
Increasingly unions have used “card-check” elections (workers simply check a card to say they do or do not want to belong to the union) combined with neutrality agreements during the decision-making period. Both labor and management agree not to harm the reputation of the opposite side. Data show that with this new strategy, unions do twice as well in organizing firms with 500 or more employees as they did in the past and are more apt to increase organizing efforts. The method demonstrates that nonadversarial unionization efforts are still possible and effective.
Labor arbitration is a common way of achieving workplace justice in nonunion situations. In their 2004 study, Workplace Justice Without Unions, Hoyt Wheeler and his co-authors examined the practice extensively. They concluded that from the standpoint of employees, arbitration offers the best chance for workplace justice, but that “justice is least likely to weep when there is a union.”
Economic globalization requires an international voice for labor. International labor organization standards call for a social partnership, and unions are a major institution through which workers can participate in making decisions about employment. The United Steelworkers union just announced a merger with the largest labor organization in Britain and Ireland, calling the three million members of the new organization to global union activism to challenge antiworker injustices.
The vision of innovative employer-employee partnerships has been consistently supported by Catholic social teaching, which insists on co-responsibility for the common good, the dignity of work and the rights and responsibilities of social participation. Development of economic community is also essential to a sustainable future, as laid out by Herman E. Daly and John B. Cobb Jr. in For the Common Good (1989). The economic success of workplaces, unionized or not, that focus on employee well-being and loyalty demonstrates the value of structuring relationships in which workers and employers can use their best gifts and exhibit “power with” instead of “power over.”
For the economy to further the freedom and well-being of workers, as well as of employers and shareholders, the right of workers to participate in decisions that affect their lives must be guaranteed and a social contract insuring cooperative working relationships re-established. Enabling workers, especially those in low-wage occupations, to help themselves through freely chosen unions is in accord with Catholic moral principles and with American traditions of individual economic freedom and democracy. Both an improvement in the public mood toward worker rights and a reform of labor law are overdue. Justice in the workplace is not a narrow interest, but part of the ongoing struggle for human rights and democracy. The current economic climate provides a teachable moment (as well as a challenge) for leaders of Catholic institutions who wish to promote justice for workers and better relationships in the workplace.