Symposium | The Middle-Out Moment

Labor: Building a New Future

By David Rolf

Tagged Middle Class

The world in which America’s unions grew and thrived is gone. The economic and political environment that once supported unions has largely disappeared. For a variety of reasons, most unions have not evolved or adapted. Within our lifetimes, many of America’s existing unions will likely perish or recede into irrelevance.

Despite a five-decade decline in union density, unions have continued to pursue the same organizing activities and strategies that they’ve used since the 1930s. This is because there are strong legal, financial, political, and membership-based incentives to adhere to past practices. Through 22 years working in the labor movement, I’ve observed that nearly all union resources—probably in excess of 95 percent—are dedicated to collectively bargaining, organizing, lobbying, and politicking on behalf of an ever-shrinking base of union members. To be fair, some labor unions have developed smart ways to improve and extend collective bargaining rights to workers in industries that are publicly financed or highly regulated in union-friendly states. My own union, SEIU, has been a leader in these efforts to grow low-wage sectors such as home care.

But improvement does not equal innovation. Unions are in decline because we have failed to invest in developing breakthrough tools to win economic justice in the fast-growing, low-wage industries that will soon employ the majority of Americans. We haven’t replaced the long-forgotten power of strikes with newer but equally disruptive forms of worker power.

The results of our failure to innovate have been dire. Today, only 6.6 percent of private-sector workers belong to unions, and the organizing rights of public-sector workers are under assault. America’s most profitable corporations outsource or subcontract operations and increasingly hire low-wage, part-time, temporary, and contract employees in order to avoid the costs associated with employing full-time workers. They have figured out how to defeat most union organizing campaigns and how to use labor laws originally designed to facilitate collective bargaining as an effective tool to prevent it. Indeed, there are now more workers who have no legal right to form a union under our outdated labor laws than there are unionized workers.

One could be agnostic about the functional death of the twentieth-century union movement—except that no rich democracy has ever built a prosperous and stable middle class without a strong labor movement. Indeed, from the 1930s through the 1970s strong industrial unions helped give birth to America’s middle class, bargaining for wages and benefits on behalf of tens of millions of workers, using their political strength to sustain the New Deal, and providing workers a seat at the table in economic policy-making from Congress to City Hall. If we are to rebuild the middle class today, unions aren’t going to be able to play the role they once did, but maybe they can join with other progressives to invest in new forms of workers’ organizations that are up to the task.

What has labor’s decline meant for our economy? Simply put, America is becoming a low-wage nation. The New York Times recently described the “recovery” since 2008 as a “golden age for corporate profits,” especially for multinational corporations that benefit from investments in emerging economies like China. But, as the Times points out, these buoyant earnings have not translated into good jobs here at home.

Sixty percent of the jobs lost during the recession were middle-income jobs, but they have largely been replaced by low-wage jobs during the recovery. According to the National Employment Law Project, 59 percent of the jobs that our economy has added in the past two years have been low-wage jobs, most of which are in retail or food service. In 2009, during the depths of the recession, a shamefully high 24 percent of jobs were low-wage job classifications (with median wages under 200 percent of the federal poverty line for a family of four). At current growth rates, that percentage will double to over 48 percent by 2020.

Globalization is often cited as the key destroyer of good jobs, but that’s only part of the story. While it does account for dramatic job losses in sectors like textiles, electronics, and other types of manufacturing, globalization doesn’t explain the downward pressure on wages in fast-growing service sectors like retail, health-care services, hospitality, and transportation. Globalization explains almost everything about why less than 5 percent of the clothing we buy is made in the United States (down from 95 percent in 1960); it explains almost nothing about why jet-fuelers and baggage handlers have seen their wages decline from about $59,000 (in today’s wages) a year in 1975 to pennies above the minimum wage today. Nor does it explain why large corporations like Wal-Mart, Target, McDonald’s, Yum! Brands, and Darden Restaurants now employ 66 percent of minimum wage earners.

It is time for union leaders and other progressives fighting for workers’ rights and economic justice to learn a lesson from successful business organizations. Over the past 40 years, corporations have invested enormous resources in research, development, and innovation. These investments have borne obvious fruit in the business and technology sectors. We would not, for example, have the Internet if not for the significant investments made by government and corporations.

But research and innovation in the business sector have not been limited to developing new marketable technologies. Corporations have also developed powerful political, legal, workforce, and supply-chain strategies specifically designed to avoid unions and generate shareholder profits by passing labor costs on to taxpayers and individual workers. The result of these efforts has been a massive upward redistribution of wealth, achieved through a dramatic generation-long transformation in our nation’s regulatory framework, the nature of work, and the rights, privileges, and benefits that workers expect and receive.

What labor needs to do is to steal a page from the private sector’s playbook. Over the past 30 years, there has been a tremendous amount of research on innovation and entrepreneurship—work that has not been matched by unions. Recently, social and civic organizations have begun to adapt business tools and strategies to implement social innovations that benefit the lives of poor people all over the world. But there is not yet a social innovation fund or idea laboratory that is solely dedicated to innovating the future of work. This is a gap that must be filled if we intend to build powerful new organizations and tools that can unite workers, transform low-wage industries, and create a new era of shared prosperity.

Any sustainable middle-out economic agenda needs to address that gap. The progressive movement needs an innovation center focused on the research, development, and diffusion of new strategies, tools, and organizations capable of challenging corporate power and transforming our economy. Such a hub would incubate new models for building worker power by convening experts in worker organizing, economics, law, policy, and business development.

Some innovations may involve militant tactics designed to disrupt the operations of predatory employers; some may be dedicated to creating and spreading new narratives that change the way people think about government regulation and the value of work. Some innovations will focus on the development of new models of worker organizations that are capable of ensuring financial security for workers and economic prosperity for communities. Some may explore new strategies for leveraging state and municipal laws so employers contribute to support worker organizations that provide the training, legal assistance, and portable benefits many workers currently aren’t getting. Other experiments may involve developing new profit-generating or worker-owned businesses specifically chartered to raise the standards in low-wage and emerging industries.

Exactly what future forms worker organizations may take is anyone’s guess. Perhaps we’ll see worker-owned temp-labor firms that compete in the market against large companies like Kelly Services and LaborReady by offering more competitive wages and benefits, online learning, and retirement investment services. Or worker associations within cities that disrupt commerce until municipal leaders agree to bargain over citywide minimum-wage and benefit standards. How about consumer labeling organizations that certify certain businesses as “sweatshop free” or “fair trade” to provide consumers with easy access to high-road purchasing decisions? Worker co-ops or B-corporations that make business decisions aligned with workplace justice? Something like a workplace-focused Anonymous, using open-source hacktivism to punish exploitative employers or industries?

There is no single answer to the challenges that working people face—but inaction is not an option. If we invest time, energy, and capital into rigorous research, development, testing, and scaling up of new strategies and organizations that put workers’ interests at the heart of our democracy, we can rebuild the American Dream. Now is a time for creativity and courage, risk and experimentation. Some strategies may be militant, some may be worker-driven or profit-generating, some may be volunteer-led or involve new forms of technology that reach around the globe. Just as the inventors of the transistor couldn’t foresee the Internet, today’s labor leaders won’t be able to predict future forms of worker power. So let us plant a thousand seeds and harvest the best blooms.

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David Rolf is the president of SEIU 775NW and international vice president of SEIU. He is the author of the forthcoming The Fight for $15: The Right Wage for a Working America.

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