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Labor Unions and Income Inequality

A Big Squeeze

by SETH SANDRONSKY

The editorial board of the Sacramento Bee, my hometown’s only daily newspaper, did it.

They discussed declining income for the U.S. middle class without mentioning labor unions (Editorial: “Middle-class squeeze shows up in retail spending patterns,” Feb. 9, 2014).

Call it a union blackout. Why?

Unions bargain collectively with employers for members’ wages, benefits, and working conditions. Thus, bosses have bottom-line motives to bargain for lower pay with individual employees.

Maybe the Bee’s editors did not get this memo. I doubt it, though.

According to the Bee editorial: “The squeeze in the middle of the department-store industry mirrors the stagnation of middle-class incomes over the last 35 years.” The data fits the narrative of U.S. class polarization.

The Federal Reserve Bank of San Francisco concurs. “By 2010, the labor share of the bottom 99% of taxpayers had fallen to approximately 50% from just above 60% prior to the 1980s.”

Meanwhile, 11.3% of U.S. wage and salary workers were union members in 2013 versus 20.1% in 1983, according to the Labor Dept. A brief look at what the Bee calls “the department-store industry” and I term “merchant capital” can shed useful light.

Think Wal-Mart Stores Inc. As journalist Arun Gupta writes in Socialist Register 2014, the global giant “accounts for about 13% of the $2.53 trillion U.S. retail market. And 140 million Americans shop at Wal-Mart weekly, more people than voted for Barack Obama and Mitt Romney combined in 2012.”

Wal-Mart began in 1962 and employs 1.4 million Americans now. The company serves as a proxy for the bitter plight of U.S. workers, whose gains from the economy’s productivity have been flowing away from them and to the top of the income chain.

Case in point is Wal-Mart’s low pay, low-price and union-free business model delivers huge riches the Walton family, based in Arkansas. The Waltons’ wealth exceeded that of the bottom 30% of U.S. families in 2007.

By 2010, Walton family wealth had increased to 41.5% of all American families, according to Gupta. Arkansas has a 3.5% rate of union density, above North Carolina (3%), and below Mississippi (3.7%).

Employment struggles in a time of political retreat for most American workers define class struggle. Organized labor, to avoid fatal atrophy, has a role to play in pushing policies and practices for shared prosperity accruing to workers in and out of unions.

The Bee’s editors conclude: “The days of denying the impact of rising income inequality are over. It’s an issue that defines this time.”

Strengthen U.S. labor law. How best to proceed?

Recall the Employee Free Choice Act, an amendment to the National Labor Relations Act of 1935. With the EFCA, a simple majority of employees (50%) could check a card showing support to join a union at a workplace, replacing the National Labor Relations Board secret-ballot elections.

Under the EFCA, union-free workers could opt for the current election process, but the choice would be theirs to make and not their bosses.

First, however, the EFCA requires enough votes to pass the Senate and House for President Obama to sign it into law, as he promised to.

Calling to close an income gap is one thing. Closing this gap via class-conscious politics that organized labor is a part of—not apart from (think Occupy Wall Street)—is another thing.

Seth Sandronsky is a Sacramento journalist and member of the freelancers unit of the Pacific Media Workers Guild. Email sethsandronsky@gmail.com