Last week, The Century Foundation held an informal panel discussion featuring author and labor lawyer Tom Geoghegan, TCF Senior Fellow Richard Kahlenberg, and civil rights lawyer Moshe Marvit to explore the subject of Kahlenberg and Marvit’s upcoming book, Labor Organizing as a Civil Right. The book, which will feature a preface by Geohegan, will be released by TCF in April to coincide with the anniversary of the assassination of Martin Luther King Jr., a champion not only of civil rights, but also economic justice and the rights of labor.
King’s last act, before his untimely death in 1968, was to support the Memphis sanitation workers, who were striking for higher wages and equal treatment. In tthe book, Geoghegan, Kahlenberg and Marvit aim to expand upon King’s legacy as a labor leader by proposing an amendment to the Civil Rights Act that would improve legal protections for workers trying to unionize. By framing the issue as a matter of civil rights, the authors hope to reenergize the debate over labor law reform, which is too often perceived as benefiting only “special interests” at the expense of the public.
Part of the problem is that union participation itself has fallen dramatically since King’s day, from a high of around 35 percent in the private sector during the 1950s to less than 7 percent today. And as the power of labor has declined, wage inequality, predictably, has shot up—40 percent since 1973. In fact, according to a recent study by Bruce Western and Jake Rosenfeld, published in American Sociological Review, income inequality today would be 20 percent lower if union density had remained at 1973 levels, and a full third lower if you account for the effect of union wages on nonunion employers, who often raise wages to stay competitive.
Source: Western and Rosenfeld, 2011
That shouldn’t come as a surprise to most Americans. Until the early 1970s, working class families shared in the increased prosperity created by rising productivity. But as union participation began to decline, the link between productivity gains and rising wages decoupled. As a result, 33 percent of all income gains since 1979 have gone to the top 1 percent, while the household income for most middle class families has stagnated. That trend, Western and Rosenfeld argue, has been intensified by the weakening of institutionalized norms of equity.
[Our] analysis suggests that unions helped shape the allocation of wages not just for their members, but across the labor market. The decline of US labor and the associated increase in wage inequality signaled the deterioration of the labor market as a political institution. . . . The de-politicization of the US labor market appears self-reinforcing: as organized labor’s political power dissipates, economic interests in the labor market are dispersed and policymakers have fewer incentives to strengthen unions or otherwise equalize economic rewards.
[Prior to 1973,] unions offered an alternative to an unbridled market logic, and this institutional alternative employed over a third of all male private sector workers. The social experience of organized labor bled into nonunion sectors, contributing to greater equality overall. As unions declined, not only did the logic of the market encroach on what had been the union sector, but the logic of the market deepened in the nonunion sector, too, contributing to the rise in wage inequality.
There are a number of theories that help explain the decline of labor over the last half century. Tom Geoghegan places much of the blame on the Taft-Hartley Act, which imposed limits on unions’ ability to strike, while others point to shifting cultural and business norms and the evolving structure of the market, from a manufacturing to a post-industrial consumer economy. More important, though, is to focus on what we’ve lost: a crucial economic and political institution that has been a relentless advocate for workers’ rights and middle class families throughout America’s history. If Congress can be convinced that labor rights constitute a civil right (as the UN Declaration of Human Rights already acknowledges), perhaps we can reduce the income gap and once again expand the middle class.