In the years following the Great Depression, labor unions were popular and thriving. The Wagner Act of 1935, also known as the National Labor Relations Act, guaranteed workers the right to collective bargaining and the right to strike. As a result, union workers, particularly those in mining and manufacturing, experienced dramatic gains in salaries and benefits, along with safer working conditions.
Corporations didn’t give up these things without a fight. But public sentiment was temporarily on the side of workers and World War II demanded unity between corporations and unions.
The end of World War II and the beginning of the Cold War gave corporations a new opportunity to undermine unions with the rise of Sen. Joseph McCarthy (R-WI) and his House Un-American Affairs Committee (HUAC). Likely emboldened by President Truman’s loyalty program intended to discredit Democratic rival Henry Wallace (former V.P. to FDR, nuclear disarmament advocate and pro-labor candidate) prior to the 1948 presidential election, McCarthy launched a witch hunt in search of communist sympathizers. News of the Soviet Union’s growing nuclear capability spawned a national paranoia that allowed McCarthy to portray labor unions as a communist front .
By the time McCarthy’s lies and un-Constitutional tactics were exposed, hundreds of Americans had been imprisoned, thousands more had lost their jobs and tens of thousands had been investigated. The victims included those who had supported Wallace, civil rights leaders, union leaders…even the unions’ rank and file.
The unraveling of the HUAC may have posed another setback for corporations and the wealthy, but McCarthy’s accusations left many suspicious of organized labor, even as labor unions continued to help build the middle class. Finally, in the 1980’s, anti-union forces suceeded in electing a president sympathetic to their cause – Ronald Reagan. When the Professional Air Traffic Controllers Organization (PATCO) went on strike, violating a law banning strikes by government workers, Reagan fired all 11,345 members who failed to return to work.
Reflecting on the event, former Federal Reserve Chairman Alan Greenspan commented, “His [Reagan’s] action gave weight to the legal right of private employers, previously not fully exercised, to use their own discretion to both hire and discharge workers.”
The war against unions resumed in earnest.
Corporations began sending jobs offshore in search of labor willing to work for low wages and without benefits such as health insurance, disability insurance and unemployment insurance. The export of jobs also eliminated the need for worker pensions. (In the years since Reagan’s election, more than 85,000 defined benefit pension funds have been eliminated.) Many of the jobs that can’t be exported, like those at Walmart and McDonald’s, now pay so little that their employees require public assistance. And with fewer workers eligible to pay dues, many labor unions have been weakened.
Meanwhile, management compensation has soared. The savings on labor costs has resulted in million dollar annual salaries and bonuses for executives.
With money comes influence allowing corporations and industries to successfully lobby Congress for subsidies, tax write-offs and lower tax rates. In addition, many corporations have been allowed to avoid taxes by creating Post Office box “headquarters” in off-shore tax havens. The resulting drop in tax revenue led to increased deficits and greater debt. But, rather than rewrite the corporate tax code and raise taxes on those who could afford it, conservatives have seized the opportunity to cut social programs. They not only cut food stamps. They have targeted Medicaid, Medicare and Social Security, as well.
Not surprisingly, conservatives have also taken aim at the labor unions which represent government workers, such as teachers, firefighters and police. In particular, they want to eliminate government pensions. The argument is that, if private workers don’t have pensions and benefits, why should government workers? If successful, conservatives will have turned the clock back to the gilded age; the days prior to labor unions; the days of extreme wealth and extreme poverty.
Some say that we already have two Americas. I would argue three.
One is the America of the one percent; those who make lots of money and pay little to no income tax; those who can buy influence by donating to political campaigns and build new businesses with government subsidies financed with the taxes paid by others.
The second is the America of hard work, limited upward mobility and shrinking investments. In this America, you work ever longer hours in order to meet the corporate demands of increased productivity. Each year, you are forced to do more with less. For you, retirement may be little more than a dream. And for your children, college will become a financial burden they may never be able to repay.
The third America is one in which people work for so little money they can’t afford many of the necessities of life. According to the Working Poor Families Project, one in three American families are now among the working poor. One in six Americans and one in four children don’t know where the next meal is coming from, or even if there will be a next meal. In this America, more than 630,000 are chronically homeless and 3.5 million will experience homelessness in a given year. For many of these people, there is little hope that their circumstances will change. They not only lack political influence, many face new laws and obstacles intended to discourage them from voting.
Both President Obama and Pope Francis have recently called economic inequality the biggest problem we face. But President Obama can’t reduce inequality in America by himself. We will need a Congress that represents all Americans. We will need a sympathetic and unified citizenry. And we will need organized labor.
(As a footnote, I should make it clear that, having become part of middle management almost immediately following college graduation, I was ineligible for union membership. But, like most Americans, I was able to take advantage of the improved working conditions, salaries and benefits negotiated by labor unions.)