Importance of unions in modern america
United Trades Exclusive
By Rick Woelfel
With the holidays now over, millions of Americans are back in ‘work mode’. And while the political pundits are already focusing on the midterm elections and beyond, most of us are dealing with the more immediate issues involved with simply making ends meet.
For well over a century, various labor organizations have devoted themselves to upgrading the average American’s standard of living. In 1890 for instance, the average American factory worker earned just under 12 dollars a week. Unionized workers in the manufacturing sector however were seeing an average of $17.63 in their pay envelope.
By 1914 and the outbreak of World War I, the average union worker’s pay had risen to $21.37 for a work week that had decreased from 54.5 hours (often for five and a half days) to 48.8 hours. Two years later, labor support contributed to the passage of the Adamson Act; which mandated an eight-hour work day and overtime pay for interstate railroad workers.
It wasn’t until 1935 however, that the National Labor Relations Act (otherwise known as the Wagner Act) guaranteed private-sector employees the right to form a union and bargain collectively. The Act was strenuously opposed by many in the business community, and union supporters were often called “Socialists” or “Communists”. Nevertheless, union membership rolls increased steadily during this period.
In 1930, 3.4 million Americans (or 11.6 percent of the workforce) belonged to a union. A decade later (with Europe engulfed in World War II), those numbers had increased to more than 8.7 million Americans and 26.9 percent of the work force. By the time the war ended in 1945 more than 14.3 million Americans were union members. That total included 35.5 percent of the work force, an all-time high.
During the post-war economic boom, the number of Americans holding union memberships continued to increase; but the percentage of American workers on the union rolls started to decrease. In the year 2000, there were roughly 16.3 million employed Americans on union membership rolls, a total that accounted for just 13.5 percent of the workforce.
By 2011 those figures were down to 11.8 percent of the workforce, and 14.76 million workers. But even when confronted by those statistics, few would dispute the notion that all American workers, unionized or not, have benefited from the efforts of organized labor.
Items such as paid vacation, overtime, and sick leave, are all products of organized labor. And it is doubtful that the Family and Medical Leave Act of 1993 (which allows workers to come to the aid of a family member in need, or be present for the birth of a child, without fear of losing their jobs), would have cleared Congress without the backing of organized labor.
Some would contend that unions are no longer desirable or necessary. Naysayers claim that unions drive up the costs of running a business to unsustainable levels, and that current federal and state statutes provide adequate protections for employees. But in today’s economic climate, employees increasingly find themselves at a disadvantage; as businesses strive to cut costs and increase profit margins by cutting staff or curtailing salary for existing employees. Meanwhile, real costs (particularly in the areas of food and energy) continue to rise in such a way that the paychecks we earn are worth less and less.
These circumstances have far-ranging ramifications. Workers not only are having a harder time building a life for themselves, but are also earning fewer dollars to put away for retirement, or into their local economies. Workers suffer, neighborhoods suffer, and the disparity this issue creates is as obvious to the observer as it is unfair to its participants.
It wasn’t always this way. On October 1st, 1908 Henry Ford and the Ford Motor Company introduced the Model T; which was priced at $850, a considerable sum at the time. Just over five years later in January of 1914, Ford announced he was increasing the salaries of his workers to five dollars per day (more than double what they had been making previously).
This move accomplished two things. It allowed workers to afford the cars they were producing each day (which in turn increased company profits), and it gave Ford his pick of the industry’s best workers (for obvious reasons). Eventually, other automakers were forced to raise their employees’ salaries as well (boosting the standard of living throughout car-crazed Detroit).
This model of capitalism worked well for half a century. When companies fared well, they shared their rewards with their workers (who in turn were able to put away a little something extra, or spend their dollars with their neighbor down the street). But that mindset started to change as corporate raiders like Carl Icahn and T. Boone Pickens arrived on the scene.
They began buying up large blocs of corporate stock, and went on to sell off pieces of those same companies at a profit to investors. Products and services became secondary to profit margins, and employees were no longer considered valuable assets, but simply ‘overhead’ (costs to be cut).
As companies increasingly make their stock available to investors through public offerings, ‘stockholder interests’ have become paramount in boardrooms across America (often at the expense of the workers who produce the product, or provide the service stockholders are investing in).
An increasing number of companies are ‘streamlining’ (read: cutting, firing, demoting) their employment rolls in the name of efficiency. Employees who remain may find themselves working longer hours, taking on heavier workloads, or being forced to take involuntary furloughs (in effect taking an involuntary pay cut in the process).
In an economic climate that is challenging (to say the least), organized labor has an important role as the guardian of worker interests. Whether that role involves fighting possible layoffs, or (on a larger scale) lobbying lawmakers to increase the minimum wage.
We’re not advocating that business owners and investors are “bad people”, but simply that quality employees are essential to any company’s success. And when one has quality employees, producing goods and services that people enjoy; they deserve to be compensated fairly.
That gets to the twin issues of minimum wage and living wage. The two terms are not interchangeable. But they are certainly interconnected. We’ll explore that subject in our next article.