A comeback coming for U.S. labor?

Greed as the cause of the economic crisis? Agreed. Need for vigilance and better regulations? Right on. Recovery only through empowering labor? Check the record.

“Historically, unionization basically created the middle class,” writes University of Texas economist, James Galbraith. He cites unions’ direct effect on wages and benefits for unionized workers (15-28% more than nonunion workers), the indirect effects on wages of nonunion workers through the “threat effect” (employers discouraging union organizing by paying comparable union wages), and the creation of social institutions that underpin the middle class, such as Social Security, Medicare and unemployment insurance.

Here’s the argument for fuller economic recovery through empowering labor: when workers form unions, they can demand their share of productivity gains, which raises their wages allowing wage-driven consumption growth (unlike today’s consumer-borrowing consumption growth). Paying a living wage means building a more stable economy.

The facts: since 2001 corporate profits have nearly doubled while real wages have flatlined. Productivity expanded by a vigorous 20 percent between 2000 and 2006, but real wages edged up only 2 percent. Workers were unable to capture their fair share of the new wealth created. Consequently, with workers’ diminished power and employers’ ability to outsource overseas and use temp and contract workers at home, those employees earning poverty wages now approach nearly a quarter of the workforce!

In 2003 representatives from 45 unions proposed a strategy for leveling the playing field, which evolved into the Employee Free Choice Act (EFCA) now before Congress. EFCA effects three changes: 1) after a majority of workers sign union authorization cards, known as “card check,” they gain recognition for their union, 2) if the union and management cannot agree on a first contract, mediation followed by binding arbitration is required, and 3) the law increases penalties for employers who violate labor laws.

Predictably, corporate America has vowed to fight EFCA. Wal-Mart CEO Lee Scott summed up the business perspective: “We like driving the car, and we’re not going to give the steering wheel to anybody but us.”

In paid ads, op-ed pieces, mailings and speeches, industry voices defend the NLRB secret-ballot elections and depict labor’s card check alternative as undemocratic. Some ads show thug-like union bosses forcing workers to sign their authorization cards. The message is misleading.

Current labor law allows either a secret ballot or majority card-signing, but at the discretion of the employer. EFCA would simply reverse the power dynamic and give the choice of method to the workers, not the employers. Industry leaders fear the increasing desire for unionization among workers that has risen from 30 percent of nonunion workers in the mid-1980s to well over half today. Retail and drugstore chains, nonunion building contractors, and large firms like Wal-Mart and Tyson favor the NLRB election process because it allows delays and challenges, frequently mixed with illegal intimidation tactics, to help industry keep the union out.

Catholic social teaching as expressed in the Compendium of the Social Doctrine of the Church (#305-309) explicitly sees unions connected with the right of free association to defend the vital interest of workers and “an indispensable element of social life.” Unions form part of the moral compass to watchdog companies so workers’ rights are respected.

With the economy in shambles from greed, deregulation and disregard for workers, the ways of commerce need a reexamination. Workers must be part of the dialogue. The Employee Free Choice Act promises a balanced comeback for workers, assuring labor its rightful place at the table.

John S. Rausch is a priest in service to the communities of the Appalachian region of the United States.