USA : As the Rich Get Richer, Unions Are Poised for Comeback
(Bloomberg) -- After years of avoiding confrontation, theU.S. labor movement is reasserting itself. From the ports of LosAngeles to the car plants of Detroit, unions are demandingpayback for sacrifices they say
Oil workers have walked off the job for higher wages andbetter working conditions. Dock workers have snarled West Coastports. Personnel staffing oil terminals at the Port of LongBeach, California, are threatening to strike. In Detroit, unionleaders girding for contract talks this year will push for thefirst raise veteran autoworkers have received in a decade.
Union leaders are taking advantage of a tightening labormarket and favorable political environment. With middle-classwages stagnating and the rich getting richer, income inequalityhas become a rallying cry for Democrats and Republicans alike.Reviving opportunity for all resonates with Americans who feelleft out as growth picks up and the market notches record highs.
“Employers seem to think that they can push unions, theroots of the American working class, off a cliff,” said DaveCampbell, whose union local represents oil-terminal workers atthe Port of Long Beach. “Well, these corporations have made asignificant miscalculation in our ability to fight back. There’sa lot of labor strife now, and they could have a majorconfrontation on their hands.”
Campbell’s combative rhetoric evokes an era when unions hadthe clout to win significant lifestyle upgrades for theirmembers. Wielding the threat of strikes and work slowdowns,organized labor helped generations of Americans join the middleclass and stay there.
In recent years, however, globalization and weak economicgrowth have hollowed out union power. In 1979, 21 millionAmerican workers belonged to a union. By last year, 14.6 milliondid. In the 1980s, strikes averaged 75 a year, according to theBureau of Labor Statistics. Last year, there were 11.
Harley Shaiken, a labor professor at the University ofCalifornia at Berkeley, has long watched the ebbing of unionpower and wondered if walkouts were an endangered species. Thesurge in labor unrest has caught his attention.
Shaiken says the main catalyst is inequality, consideredthe defining economic challenge of this era by everyone fromPresident Barack Obama to Republican presidential aspirant JebBush. Slow wage growth figures in deliberations by FederalReserve officials as they consider whether to raise interestrates above zero this year. Even with unemployment near thelowest level since 2008, central bankers have expressed concernthat low wages could restrain household spending.
On Thursday, Wal-Mart Stores Inc., America’s largestprivate employer, said it would raise wages to $9 an hour, wellabove the $7.25 federal minimum wage. The move, by a retailerthat has thwarted unions trying to organize its stores, strikesback at critics who say it underpays employees.
A 2011 study drew a link between the decline in unionmembership since 1973 and expanding wage disparity. Those trendshave since continued, said Bruce Western, a professor ofsociology at Harvard University who co-authored the study.
Union workers say they took a hit on wages and benefitsafter the financial crisis to help keep companies and theeconomy afloat and expect to be rewarded for their sacrifice.
“You don’t want to be the senior partner in failure andthe junior partner in success,” said Gary Chaison, a professorof labor relations at Clark University in Worcester,Massachusetts.
Since 2009, management compensation has grown about 50percent faster than union workers’ income. In the auto industry,real wages have declined 24 percent since 2003, according to theCenter for Automotive Research.
Pat Patterson, 60, is on strike for the first time in 35years working as a pipefitter at Tesoro Corp.’s refinery inCarson, California. Patterson said his union helped the companysurvive the recession and now should share the wealth it hassince accumulated.
“Their whole driver is greed,” he said. “Tesoro ismaking record profits. There’s more profit, and they don’t wantto share it with the workers.”
In an e-mail, Tina Barbee, a Tesoro spokeswoman, said“it’s very unfortunate that the union has called out on strikeso many of its members –- our employees –- who will not be ableto share in all of the rewards.”
In Detroit, Dennis Williams, the United Autoworkers’ newpresident, has made getting his members a raise a top priorityin contract talks with General Motors Co., Ford Motor Co. andFCA US, formerly known as Chrysler Group LLC.
And he’s not above rattling the strike saber. Williamsstressed the importance of the right to strike. During the lastcontract talks, in 2011, the UAW gave up that right at GM andChrysler to help the automakers recover from their bankruptcies.Now, that power has been restored. The current four-year autocontract expires Sept. 15.
“The right to collective bargaining is a building block togood economics, shared prosperity, a strong middle class and acountry that believes in balanced democracy,” Williams said ina statement.
The Detroit Three are loath to increase their labor costssince that’s what helped nearly drive them out of business. Theyprefer to reward workers with profit sharing checks that canshrink or disappear in tough times. Detroit autoworkers havereceived record profit sharing for the last five years.
But Detroit’s automakers may have to boost wages, said ArtSchwartz, a former GM labor negotiator who now runs Labor &Economics Associates, a consulting firm in Ann Arbor, Michigan.
If the UAW wins traditional wage increases, “that willembolden other unions to try and get more,” Schwartz said.
The United Steelworkers, which represents oil refineryworkers, is seeking better wages, benefits and restrictions onthe use of nonunion contract workers. The companies are expectedto use the worldwide collapse in crude prices as a cudgel innegotiations, but the unions may dig in. When oil workers acrossthe country last walked off the job, 35 years ago, the strikelasted three months.
“The oil companies think they have a strong case becausethe international price is down so much, but they have made suchphenomenal profits in the past, they don’t have a strong case,”said Chaison, the labor relations professor.
One of the challenges for labor leaders is overcoming aperception among Americans rich and poor that union workers areoverpaid and protected even if they perform poorly on the job.
The Pacific Maritime Association, which represents portemployers, says dock workers make $147,000 a year. CraigMerrilees, a spokesman for the longshore union, calls thecalculation “demonstrably false” and says workers earn about$80,000 a year and can reach the higher wage only by workingmaximum overtime on weekends and holidays.
“Workers are seeing the high pay chipped away and they’reconcerned about outsourcing,” said Shaiken, the Berkeleyprofessor. “It’s not that they’re lower paid, but they gave upa lot to get there. That’s why you’ve got this collision.”
For the first time in a generation, the labor movement isaligned with millions of Americans who don’t belong to a unionbut feel marginalized.
“This is a political opportunity for organized labor,”said Western, the Harvard professor. “Although the inequalitydiscussion is opening up a space, the conversation has so farnot really addressed the problems of parents trying to raisetheir children, trying to guarantee them a better future.”