August 15, 2008 Volume 109 Number 16

State of the unions

By DON McINTOSH, Associate Editor

Labor Day may be the one occasion in the course of a year when the commercial media remember the union movement. For union-owned media like the Labor Press, it’s an annual opening to take a step back and ask how workers — and the labor movement — are doing.

University of Oregon professor Bob Bussel, director of the Labor Education & Research Center (LERC), thinks evidence has continued to mount for the existence of what presidential candidate John Edwards called “two Americas.” In other words, the gap between rich and poor seems to be accelerating.

That’s borne out by the Economic Policy Institute (EPI), a Washington, D.C.,-based think-tank. Once every two years, EPI puts out a thick report entitled “The State of Working America.” The next one is due to be released Labor Day.


Numbers tell part of the story

EPI reports that the business cycle that began in 2001 and ended in 2007 looks to be the first ever recorded in which America’s middle-class families ended the cycle with less real (that is, inflation-adjusted) income than they had at the beginning. Productivity rose 18 percent during that time, but the gains weren’t evenly shared. Incomes rose for the top 10 percent, but stagnated for the rest.

This year, with a new recession beginning, economic stats looked bleaker. Unemployment rose, reaching 6.0 percent of the workforce in July. And as of June, nearly a fifth of the unemployed had been out of work for at least half a year.

In the last 12 months, 383,000 manufacturing jobs have been lost. The retail trade has lost 211,000 jobs since peaking in March 2007. And the construction sector has shed 557,000 jobs since its September 2006 employment peak, with nearly three-quarters of that in the last eight months. [One bright spot is health care, which has added 368,000 jobs over the past 12 months.]

Joblessness is a problem for the 9.4 million unemployed workers, but also for 145.8 million workers who remain employed. As EPI points out, when jobs are scarce, employees have little leverage to bargain for better wages and benefits. And besides the wholly unemployed, as of June, there were about 5 million involuntary part-timers (workers who want but can’t find full-time work). Because so many workers are part-time, the average workweek is 33.6 hours. [In manufacturing the average is 41 hours.]

The U.S. trade deficit appears to have stopped growing, falling to $700 billion in 2007 from an all-time record of $753 billion the year before. Imports of foreign goods still increased, but exports grew faster. Thus far this year, the deficit is on track to match last year’s.

Prices for most things have begun to rise again. Overall, as of June the prices of items tracked in the Consumer Price Index had risen 5 percent from the year before. But not all goods are rising equally. Clothing prices have been falling for years, but energy costs are on track to rise 29 percent this year, transportation costs 11.9 percent, and food 6.6 percent. Medical cost increases have slowed this year, however, to about the overall rate of inflation.

Meanwhile, the Dow Jones, NASDAQ, and the S&P 500 stock indexes have all lost about 10 percent of their value since 2008 began. And that’s not good news for workers’ retirement security or for the Taft-Hartley trust balances that union workers rely on.


Union workers still well ahead

Despite all the bad news, unions remain a relative island of stability and job security. In the private sector, union workers made $3.97 per hour more than nonunion workers, on average, as of March 2008. Union workers averaged $22.46 an hour, while non-union workers averaged $18.49.

Benefits widen the difference. Union employers pay $3.95 an hour for health benefits, compared to $1.68 an hour for nonunion employers. And employer retirement contributions average $2.49 an hour for union workers, and just 78 cents an hour for non-union workers.

As of March 2008, 86 percent of union workers were participating in some kind of employer-sponsored retirement plan, compared to 51 percent of nonunion workers. And among workers with employer-provided health coverage, the employee share of monthly premiums was half as much for union workers: For single coverage, on average union workers picked up 9 percent of the premium, compared to 20 percent for nonunion workers; for family coverage, union workers paid 15 percent, and non-union workers 33 percent. Union workers have an average of 10 paid holidays a year, two more than non-union workers. And union workers have more vacation days and sick leave, and earn more overtime and shift-differential pay.


Local conditions better

So far the nationwide construction downturn hasn’t hit local building trades unions, says John Mohlis, executive secretary-treasurer of the Columbia Pacific Building and Construction Trades Council.

“I don’t know that we’re bullet-proof,” Mohlis said, “but we’re weathering it better than other parts of country.”

Mohlis notes that there’s been a slowing of construction in the condo market, but an uptick in work elsewhere: roads and bridges, schools, alternative energy projects, and airport and hospital construction. One worrisome sign is that bankers are slowing down lending money on private development projects. Still, union building trades members aren’t staying very long on hiring hall out-of-work lists. Mohlis said that’s a big contrast to the recession of four or five years ago, when local building trades employment took a hit.


Union trends

While unions may be holding on to gains, the labor movement is changing.

There’s now a stark difference in unionization rates between the public- and private-sector work force. The typical union worker is now more likely to be a teacher, firefighter, or postal employee than a construction or factory worker.

Then there are demographics. Over 40 percent of union members are over the age of 45, notes LERC director Bussel.

“You’re going to have a huge wave of people retiring in the next decade — union leaders, activists, people with experience and institutional memory who have guided the union movement,” Bussel said. “So there’s going to be a real leadership vacuum that’s going to need to be filled.”

And union workers seem to have lost the ability to strike: 2007 continued a downward trend in the number and length of major work stoppages — defined as strikes or lockouts involving more than 1,000 workers. Just 21 work stoppages of that size occurred last year, nationwide — and just 12 in the private sector. The 21 strikes involved 189,000 workers and lasted on average 10.5 days. Thus, American workers spent less than five thousandths of 1 percent of their work hours on strike. That’s about one hundredth the level that existed when strike activity peaked in 1959.


Political trends

Bussel also notes some of the political trend lines to emerge in 2008. The term “working class” re-appeared in the American political vocabulary, with constant repetition among pundits of the idea that “white working class voters” favored Hillary Clinton. It became fashionable for Democratic presidential candidates to criticize NAFTA and NAFTA-style trade treaties. Every politician was suddenly on board with talk of green-collar jobs and converting to a clean energy economy. Reinvesting in infrastructure was back on the agenda. And for the first time in decades, the prospect of improving labor law appears within reach — last year the union-backed Employee Free Choice Act passed the House and got majority support in the Senate but couldn’t overcome a Senate filibuster threat and the certainty of a presidential veto.

Among union leaders, all eyes are on the November election to see if supporters of the Employee Free Choice Act can be added to the Senate and lifted up to the White House.

“For the union movement, so much revolves around what type of political opening there will be,” Bussel said. “If the Employee Free Choice Act passes, it doesn’t necessarily mean union movement fortunes would be turned around in year or two. But it would be a signal that the federal government is again acting as a guardian of working class interests, and that would be very important.”

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