What’s at Stake in the War on Workers
On May 6, a United States senator from Ohio took to the lectern on the Senate floor to make his case for a piece of legislation bearing his name. “As long as [the unions] have the power they have had, they are bound to make unreasonable demands,” he said. “One of the purposes of this bill is to cut that power down somewhat.”
The year was 1947 and the lawmaker was Sen. Robert A. Taft. He was arguing for a bill known as the Taft-Hartley Act, a law written to limit the power of workers to effectively organize and bargain collectively. With this law, Taft and his colleagues planted the seed of the modern war on workers. Their efforts 65 years ago are the reason why earlier this year Indiana could call itself the first right-to-work state in America’s industrial heartland.
Sen. Taft armed corporate America with one of the most powerful weapons against organized labor. By financially handicapping unions, right-to-work laws have been wielded against workers in an effort to cripple their bargaining power and shift ever more power and resources to the 1 percent.
Twenty-two predominantly Southern states enacted right-to-work laws long ago, stifling unionization and driving down wages in those states. After a decade of dormancy, right to work—more aptly called right to work for less—has been revived by a coalition of lawmakers, tea party groups, manufacturers and conservative think tanks. In 2011, anti-worker politicians were pushing for these laws in 10 states.
Still, many people are unclear about what right to work actually means. Its misleading name only adds to the confusion.
Right-to-work laws don't give workers the right to refuse to join a union—they have always had that right. By outlawing union security clauses, right-to-work laws prohibit agreements that require all workers who benefit from union representation to share in the costs of the union. Even under right to work, unions have to represent all workers covered by a collective bargaining agreement. Right-to-work laws simply allow workers to refuse to pay dues for that representation and to get a free ride. This means that workers who enjoy the benefits of a union contract can force their co-workers to subsidize the costs of their representation, which ultimately weakens the union’s ability to represent its members.
It was Taft-Hartley that granted states this power and set the stage for right-to-work laws that swept through the South and parts of the West. And the effects have been devastating for the American worker.
“Wall Street and right-wing politicians see right to work as the most effective way to shrink the middle class by starving the unions,” said Jim Hoffa, Teamsters General President. “They have been taking advantage of the bad economy and using a crisis created on Wall Street to go after workers and permanently lower workers’ living standards.”
The groups behind right to work claim that their intent is to spur job growth. The average worker in right-to-work states makes about $1,500 less per year than workers in other states. These lower labor costs supposedly attract businesses to states with anti-union laws. But it turns out that job creation in right-to-work states isn’t exactly stellar.
Of the 12 states with the highest unemployment in the nation, eight of them are right to work. Oklahoma, the last state to become right to work before Indiana, has seen the number of manufacturing jobs drop by a third since it adopted right to work in 2001.
From Corporate Offensive to Great Recession
For the Wall Street-backed forces that have such overwhelming influence in this country, laws like right to work are part of a longstanding campaign against the middle class that has been under way for at least the last 30 years. Since 2008, that campaign has taken a new turn with the latest war on workers, hitting public sector employees especially hard. While it is a relatively new threat that these workers are facing, the attacks on public sector workers are really an extension of the long-term corporate agenda against unions.
Until now, unions in the public sector have been mostly spared from the sharp decline in membership experienced by private sector workers since the 1970s. A deep recession took hold during that decade and with it came a commitment by corporate America to permanently lower the living standards of workers.
A Business Week article at the time summed up the challenge for big business: “It will be a hard pill to swallow—the idea of doing with less so that business can have more...Nothing that this nation, or any other nation, has done in modern economic history compares to the difficulty with this selling job that must now be done to make people accept the new reality.”
This was part of the battle cry for the corporate offensive that continues today, an offensive that has been steadily eroding wages and benefits for the middle class by attacking private sector unions. The war on unions in the private sector was thrust into high gear a few years later when Jimmy Carter deregulated the trucking industry and Ronald Reagan broke the air traffic controllers strike in 1981.
Over the last three decades, the decline in private sector union membership—from 30 percent to less than 7 percent—led to a sharp rise in income inequality. In 1980 the average CEO was paid 42 times more than the average blue-collar worker. Today, the average CEO makes more than 380 times what the average worker makes.
Unions in the public sector had fared better by comparison since the 1980s. Membership for public sector unions more or less held steady at 36 percent of the workforce. But all that changed with the onset of the financial crisis in 2008. States, counties and municipalities absorbed massive losses and bad debts created in the private sector by Wall Street. Government at all levels was hit with huge budget shortfalls and union-busters saw an opportunity to launch a war against public sector workers.
Extremist right-wing politicians, many of them swept into office by tea party conservatives in the 2010 midterm elections, have put public employees in their cross-hairs. Suddenly teachers, firefighters, police officers and first responders are cast as enemies of the American people. The narrative about the overpaid, lazy public worker is being peddled by anti-union groups that want to turn public and private sector workers against each other. This divide-and-conquer strategy is designed to advance anti-worker legislation, including right-to-work laws.
One of America’s most notorious union-busters made this clear last year when he was asked about the possibility of his state becoming right to work.
“Well, we’re going to start in a couple weeks with our budget adjustment bill,” Wisconsin Gov. Scott Walker said to a billionaire campaign donor. “The first step is we’re going to deal with collective bargaining for all public employee unions, because you use divide and conquer.”
Right to work in the private sector is essentially the counterpart to attacks on public sector workers, explains Dr. Gordon Lafer, a political economist with the Economic Policy Institute and an associate professor at the University of Oregon. “All of these policies are geared toward the same goal and that's to cripple the labor movement in this country,” he said.
A Question of Economic Fairness
The political motivation behind anti-union laws like right to work is difficult to ignore. Corporate America is consistently campaigning for laws and regulations affecting workers and unions which businesses would never accept for themselves.
In 2005 the Kentucky Chamber of Commerce, a strong supporter of right-to-work laws, was asked by a union employer if the Chamber would continue to provide services to businesses that did not pay dues. The Chamber's response? “The vast majority of the Chamber’s annual revenues come from member dues, and it would be unfair to the other members to allow an organization not paying dues to be included in member benefits,” it said.
Yet this is exactly what groups like the Chamber of Commerce insist unions should be required to do under right to work. Corporate lobbyists promoting right to work would never support rules requiring them to serve the interests of companies that don't pay dues to their organizations.
This kind of double-standard for business and workers gets to the heart of the politics underlying right to work. In fact, it’s a recurring theme in the ongoing war on workers. And underlying the political aims of anti-union laws is the more fundamental question of economic fairness, which big business is determined to destroy.
As Lafer explained, private corporations backing the attacks on public sector unions are motivated by the same agenda as conservative public policymakers pushing for right-to-work laws in the private sector. “They know that the labor movement is the one thing standing in the way of corporations having a free hand against the working class,” he said.
Stacking the odds against working people is central to the project of corporate America. This is why organized labor is seen as such a threat to the 1 percent and its desire for absolute control. So when right-wing politicians talk about “shared sacrifice,” they are really talking about sacrifices to be shared among workers and their families, not between the middle class and the wealthy.
It's been nearly four years since the housing bubble popped on Wall Street, sending the global economy into a tailspin, and today the largest firms and banks are more profitable than ever before. In fact, they are sitting on $2 trillion in wealth, an incomprehensible amount of money that big banks refuse to put back into the economy. Meanwhile the average working family lost nearly 40 percent of its net worth from 2007 to 2010.
Last year, 1.35 million Americans filed for bankruptcy. But once again, the rules are different for big business, which is increasingly using Chapter 11 bankruptcy to tear up union contracts and walk away with huge assets while workers are left to suffer. When working Americans declare bankruptcy, they risk losing their homes and having their bank accounts seized. But when the average CEO files for corporate bankruptcy, it’s an opportunity to break the union, gut employee pensions and reward executives with raises and bonuses.
This is what American Airlines has been trying to do to its workforce. And Teamsters have faced the same greedy manipulation at Hostess, where management looted the company, drove it into bankruptcy and now wants its workers to sacrifice even more.
As Teamsters Secretary-Treasurer Ken Hall observed, this is the same type of unethical management championed by private equity firms like Bain Capital, where Republican presidential candidate Mitt Romney earned his credentials as a vampire capitalist.
“The executives at Hostess basically took a page out of the Romney playbook,” Hall said. “They managed to give themselves nice raises while driving what was once a great American company into bankruptcy. It’s no different than what corporations are trying to do across the country. They want to take more money out of workers’ pockets by filing for bankruptcy. And with laws like right to work, wealthy CEOs are going after the one thing that stops them from robbing workers—that’s the unions.”
The Big Picture
At the end of 2009, YRC was headed for bankruptcy unless its bondholders would agree to an exchange of debt for stocks. But credit default schemes made bondholders more interested in seeing the company go bust. That is, until Hoffa put his foot down on behalf of more than 30,000 YRC Teamster truck drivers. Hoffa put Goldman Sachs and other hedge funds on notice, raising the specter of hundreds of 18-wheel trucks blockading Wall Street in protest.
It wasn’t long before nearly 90 percent of bondholders agreed to the exchange, averting bankruptcy and saving tens of thousands of jobs. This is how unions force corporate power to put workers’ livelihoods over investment returns.
But the system is still rigged. While it sounds like bad business to accumulate debt in the name of profit, Americans have seen in the last few years how hedge funds and private equity firms profit spectacularly off of failure. The more unions are stripped of their power, the easier it is for Wall Street to get away with their parasitic ventures.
That’s why corporate interests have made the attack on unions so central to their agenda. Their success has opened the way for even more brazen attacks on workers’ wages. In the construction industry, for example, CEOs are getting help from corporate-backed lawmakers to drive down wages by eliminating prevailing wage laws and project labor agreements.
After the 2010 midterm elections, the right wing declared open season on workers. Conservative groups like the American Legislative Exchange Council (ALEC) and the billionaire Koch brothers have authored and bankrolled hundreds of anti-worker initiatives from Maine to Minnesota, hijacking our democracy in the process.
Not satisfied with buying off politicians, this anti-union coalition is also pushing schemes like paycheck deception laws in places like California in order to silence the political voice of workers. Paycheck deception measures take away union members’ right to use payroll deductions for political purposes. These laws also weaken the ability of working people to advance working family issues such as legislation that would create jobs and stop job outsourcing.
If it seems like the enemies of labor are using these difficult economic times to bludgeon American workers, in Europe they are using the crisis to bleed workers dry. Austerity in Europe has devastated working people with massive cuts to jobs, wages and pensions, leaving their economies reeling. Greece is on life support and hanging on by a thread as the economic crisis has given way to political chaos. In Spain, austerity has resulted in a jaw-dropping 50 percent unemployment rate among the youth. But none of this seems to bother anti-worker politicians in the U.S. who are pursuing austerity with a vengeance while doing nothing about the too-big-to-fail banks that are now even bigger than they were before the 2008 crash.
And despite record profits and an unprecedented transfer of wealth from workers to the rich, overall American wages remain stagnant—as they have for the last 30 years. Globalization and unfair trade agreements continue to ravage the middle class, outsourcing workers’ jobs and making Americans compete with workers in low-wage countries like China.
“The stakes really couldn’t be higher,” Hoffa said. “What we are facing is the threat of America becoming a kind of banana republic with a small oligarchy of the rich running everything—that means no middle class and no democracy. Without the right laws, regulations and organized labor holding corporate America’s feet to the fire, these companies will do anything to lower labor costs, even if it means bringing third-world poverty wages here to the U.S.”
Indeed, it’s no mystery why unions are being attacked with laws like right to work.
“We are the last force holding the line for working people in this country,” Hoffa said. “Groups like ALEC want to turn back the clock to the days when American workers had few rights and no protections in the workplace. Unions are the most powerful thing standing in their way and that’s why they are attacking us.”
Don’t Mourn, Organize
Fortunately, there is reason to be hopeful that unions and labor allies can turn the tide and save the middle class. In the last year, the labor movement successfully beat back right to work in Minnesota, Michigan, Missouri, Pennsylvania, Maine and New Hampshire. And in Ohio, working families came together and defeated Senate Bill 5, legislation that would have curbed collective bargaining rights for 350,000 public employees.
In Indiana, history suggests there is a strong chance of repealing the recently passed right-to-work law there. A similar right-to-work bill was passed in 1957 in the state and was repealed a few years later.
With the upcoming presidential election, workers have an opportunity to defeat right to work and the larger anti-union agenda. Mitt Romney endorsed right-to-work efforts in Michigan and made it clear that imposing a national right-to-work law would be a real priority for him as president. This is a dangerous idea, but it can be beaten in November.
Beyond the elections, struggles in the workplace and grassroots activism on the streets have galvanized labor in a way that has not been seen in decades. From the powerful protests in Wisconsin to the electrifying Occupy Wall Street movement that rocked the country last year, there is a strong sense that workers and the 99 percent as a whole are not just fed up, but they are ready to organize and fight back.
Workers everywhere have seen the collective power they hold and realize that their livelihoods and dignity depend on that power.
“In spite of the powerful enemies we face, workers are continuing to stand together against the odds,” Hoffa said. “The Teamsters have been leading the way in organizing in industries throughout the country to win more power for our side and we’ve had some incredible victories in the last year.”
By themselves, some of the union victories may seem small in the larger context of the war on workers. For the workers involved, they are anything but small. These are the kind of triumphs that add up to the ultimate win for workers: shifting the balance of power and saving the middle class.
ALEC Rap Sheet
Conservative Group Pushing Anti-Worker Legislation
The right-wing, corporate lobbying group, the American Legislative Exchange Council (ALEC), has had a hand in almost every piece of anti-worker legislation in recent history. This is just a small sampling of their model legislation attacking workers and their families:
Paycheck Protection Act: A bill aimed at inhibiting public employee unions from raising funds for political activities.
Competitive Contracting of Public Services Act: A bill designed to promote privatization by implementing cost requirements on government entities.
Prevailing Wage Repeal Act: A bill calling for the repeal of “prevailing wage” requirements in state laws, lowering wage standards and undermining the ability of union contractors to compete for bids.
Resolution Urging Congress to Pass the Colombia Free Trade Act: A resolution in favor of the Colombia Free Trade Agreement, promoting the “free trade” agenda that has led to the loss of millions of American jobs. These agreements give companies greater freedom to offshore jobs to countries with low to nonexistent labor standards and, in Colombia’s case, extreme violence against trade unionists. ALEC also authored resolutions in support of the Panama Trade Promotion Agreement and the US-Korea Free Trade Agreement.
Resolution in Opposition to Any Increase in the Starting (Minimum) Wage: While the federal minimum wage ($7.25) has not been raised in years, ALEC has written and pushed legislation against any increase in state and federal minimum wage rates.
Resolution Opposing Employer-Paid Health Care Mandates: A resolution in opposition to state legislative efforts to require employers to purchase health insurance for their workers.
Resolution Opposing Card Check: A resolution opposing the Employee Free Choice Act that would remove barriers to union organizing.
Right to Work Act: Legislation prohibiting unions and private sector employers from making membership or payment of union dues a condition of employment.
For more information on ALEC, visit www.alecexposed.org.