The Labor Movement

Unions in a “death spiral”? Not on my job site

In the building trades, labor is flourishing

Labor working (Credit: Lucy Nicholson / Reuters)

With his assertions in Salon that “unions are in a death spiral” and “private sector unionism has all but vanished,” Arun Gupta advances a shortsighted and incomplete narrative promoted too often by the mainstream media. His blanket assertion that organized labor has no response to today’s challenges, other than to throw hundreds of millions of dollars at the Democratic Party, demonstrates an unfamiliarity with the nuances of today’s union movement. As a close observer of the labor movement, I am confident in stating that, at least in the construction sector, Gupta’s portrait bears little resemblance to what is actually occurring.

To be fair, Mr. Gupta is not alone in his supposition that national, across-the-board union membership statistics apply to all industries. The falsehood is broadcast daily by anti-union zealots and lobbyists in the construction industry. When calculating union density in construction, however, a more accurate reflection is achieved by parsing out residential construction. With the exception of metropolitan markets where the building trades maintain significant residential market share, the strategic decision was made years ago to concentrate building trades union resources in commercial, industrial and heavy/highway construction because of the advent of a “race to the bottom” business model in the residential market. Once residential construction is removed from the calculation, union density numbers are significantly different.  Today, the union construction sector enjoys a market share approaching 50 percent of all non-residential construction dollars spent in the United States.

These results were not achieved by accident or happenstance. Rather, the building trades unions have collectively embarked upon a comprehensive campaign to change the culture of the union construction industry, on the inside and out.  Through the establishment of stringent local union accountability standards, as well as rank and file codes of conduct and excellence, these unions are setting the bar for value-added on the job site and political achievement in state capitols.

Everyone in the union construction trades will tell you that high standards are a reflection of the fact that, in their world, the only guarantee is the first eight hours on the job.  If expectations are met or exceeded in the performance of their craft, then a union tradesperson has simply won the right to come back for the next eight hours.  This kind of self-accountability is encouraging to contractors, owners and newcomers to the trades alike.

Perhaps the most noteworthy aspect of the building trades’ collective renewal, from an outsider’s standpoint, has been the attempt to reverse the perceived legacy of being “stale and pale” organizations that were, at one time, reluctant to embrace diversity.  The new age of construction unionism has insisted on forging important and mutually beneficial community partnerships and pursuing higher safety and diversity standards than the competition.

In dozens of cities nationwide, the building trades have pursued new members in historically disadvantaged communities.  These members have not simply been given a pen and asked to sign, or been given a sign and asked to march, they have been offered unmatched apprenticeship opportunities that provide a clear path to the skills needed to realize the goal of a supporting a family and making a future.

Through the increased embrace of Project Labor Agreements by major corporations and public sector agencies, these unions are creating structured pathways to increase the number of minorities and women who gain access to the skilled trades.  The non-union construction industry has no such standards, no such goals, and no apparent interest in pursuing them.

The uptick in PLAs has brought increased interest in military veteran hiring practices.  Almost 10 years ago, the building trades unions of the AFL-CIO created a program, Helmets to Hardhats, expressly designed to provide job and career training opportunities to transitioning military veterans.  To date, the program has placed thousands of veterans in jobs and in union apprenticeship programs all across the nation.

This story line of rebuilding lives and reinvigorating communities was recently on display in Los Angeles where the L.A. Metro Board of Directors unanimously approved a multibillion-dollar PLA (my wrap-up on it here).  The agreement includes a formal plan to help increase the number of workers from disadvantaged areas that will be hired on the agency’s transit and road projects. This PLA, negotiated with the Los Angeles/Orange County Building Trades Council, is believed to be the first of its kind for a transit agency in the U.S.  Under the Metro L.A. PLA, 40 percent of work hours on future projects will be done by workers who live in economically disadvantaged neighborhoods and 10 percent of work hours will go to workers struggling with poverty.

Perhaps the most interesting aspect of  the L.A. Metro PLA, though, was the unanimous vote of the board.  This vote included five Republican members.  This represents the less publicized element of the building trades’ campaign of cultural change.  These unions have achieved results by doing what the Occupy movement and the labor movement at large have often refused to do: by working with the GOP.

Despite this or, rather, because of this, one of the most under-reported stories of the past year was the broad and stable level of support offered by a number of Republican senators and representatives for building trades union policy goals.  On several occasions over the course of 2011, roughly 50 Republican House members voted to sustain Davis-Bacon Act prevailing wage protections on federally funded construction projects.  Similarly, two dozen GOP representatives repeatedly stood with the building trades on the issue of federal PLAs as promoted by President Obama’s Executive Order.

These outcomes were not the result of simply throwing money at politicians, although it is relevant to note that the building trades unions of the AFL-CIO are collectively, according to Federal Election Commission data, one of the top five contributors to the Republican Party over the course of the last 10 years.  More important than political donations, however, has been the building trades’ consistent pattern of inclusiveness — from the job site to the nation’s capital — that has enabled these private sector unions to do everything but vanish as Mr. Gupta suggested they have.

New video could damage Walker

Exclusive: One of the Wisconsin governor's closest allies says the GOP wanted to "go further" on union-busting

Scott Walker and Jeff Fitzgerald (Credit: AP)

Does Scott Walker want to make Wisconsin a right-to-work state? He says no. But his allies are gunning for it.

In a new video, the speaker of the Wisconsin Assembly says his caucus wanted to pass a right-to-work bill last year. The video, shot on March 27 of this year by a Democratic Party tracker, who provided the footage to Salon, captures Speaker Jeff Fitzgerald talking at a bar with a reporter from the Milwaukee Journal-Sentinel.

The reporter asks Fitzgerald whether he was surprised when Walker described his plans to attack public workers’ collective bargaining. “No, it wasn’t a shock to me …” responds Fitzgerald. “My caucus wanted to go further. I had people in my caucus that was, you know, were wondering if we were going to do Right to Work in this state. So to tell you the truth, the collective bargaining, to me, I thought was more of a middle ground if you can believe that.”

Fitzgerald says “a number of people thought” they would push right-to-work, just as Republicans were in Indiana (where it passed this winter) and Minnesota (where it stalled). “When I heard about the collective bargaining,” he says, “it didn’t surprise me at all.” (Fitzgerald did not immediately respond to a request for comment.)

The video of Fitzgerald comes a week after Walker himself was caught on camera in January 2011, saying, “The first step is we’re going to deal with collective bargaining for all public employee unions, because you use divide and conquer.” Taken together, both men’s comments suggest the state GOP plans to step up its attacks on organized labor, though publicly Walker has insisted otherwise.

Assembly Speaker Fitzgerald, and his brother Scott, the majority leader in the Senate, are two of Walker’s closest political allies. When they helped push through Walker’s collective bargaining bill last year, critics charged that Wisconsin had become “Fitzwalkerstan.” He’s also the front-runner in a hotly contested GOP primary for U.S. Senate – perhaps the reason he’s talked up right-to-work even though Walker is trying to tamp down the topic.

Contacted over email regarding the video, Walker spokesperson Ciara Matthews responded that Walker “has made clear repeatedly that he does not have an interest in pushing Right to Work legislation.”

The Democratic Party of Wisconsin, having recorded the video, was quick to try to turn it against Walker. Calling the video “shocking,” Wisconsin Democratic Party communications director Graeme Zielinski said it offers further evidence that Walker “does not tell the public honestly what his plans are because they would reject them.” Referring to Fitzgerald, Zielinski said, “This is the guy who has carried water for Scott Walker like nobody else.”

A so-called right-to-work bill bans union contracts that require workers represented by unions to pay for the costs of that representation. By leaving unions stuck representing some workers for free, it saps them of resources to grow or defend themselves. By ending union membership as the default in union workplaces, it makes it easier for management to discriminate against union members.

Since the recall effort picked up steam, Walker has been downplaying right-to-work as an issue for Wisconsin. Walker, who co-sponsored a right-to-work bill as a freshman legislator in 1993, told the Atlantic in February that he had no plans to push the issue and that “Private sector unions had been our partner in the economic revival we’ve had in this state.” At the time, I noted that Walker was trying to walk a fine line: stoking resentment against supposedly overpaid public employees while working to shed the anti-union label. As Steve Kornacki wrote, that became even more difficult last week, after the video of Walker was released.

Watching that video, it’s not a stretch for private sector union members – who swarmed the capitol last year in defense of their public sector counterparts – to imagine Walker would like to conquer them next. The day after the video came out, Walker told reporters that right-to-work “isn’t going to get to my desk. I’m going to do everything in my power to make sure it isn’t there …” But he declined to say whether he would sign it. While today’s new video doesn’t mention Walker’s stance on right-to-work,” it offers further evidence of Walker allies salivating over it, and it undermines his efforts to render it a non-issue. Citing two attendees, Blogging Blue reported that GOP Assembly Member Chris Kapenga told constituents at a listening session last night that Republicans “have Right to Work legislation ready to go” and just “have to wait until it is politically feasible.”

If Walker survived the recall and signed a right-to-work bill after disclaiming any interest in it, he wouldn’t be the first. Fellow Republican rock star, Indiana Gov. Mitch Daniels, ended public workers’ bargaining just after being elected, claimed to have no interest in right-to-work, got reelected and then pushed and signed Indiana’s bill this year.

Could that history repeat itself in Wisconsin? That depends not just on who wins the recall races for governor and Senate, but on how much they win by and what lessons their colleagues take from the results. But today’s video reinforces what many Wisconsin voters on both sides likely suspect: The question isn’t whether Republican leaders want to bust unions, it’s just what they think they can get away with.

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Josh Eidelson is a freelance journalist and a contributor at The American Prospect and In These Times. After receiving his MA in Political Science, he worked as a union organizer for five years.

“I’m not Scott Walker”

State Republicans are terrified of pushing anti-union legislation -- and becoming targets like Wisconsin's governor

Gov. Scott Walker (Credit: Reuters/Darren Hauck)

Labor has taken a beating. While private companies squeeze and lock out workers, resurgent right-wingers have pushed anti-union bills in statehouses around the country. But after a seemingly relentless national assault provoked dramatic pushback in Wisconsin and elsewhere, some Republicans are … relenting.

Take Minnesota. 2010’s red wave flipped both the state House and Senate, putting Republicans in unified control of the Legislature for the first time in 38 years. In January 2011, just after they took office and just before an uprising erupted in neighboring Wisconsin, Minnesota Republicans introduced Right to Work – a bill to defund unions by banning contracts that require workers represented by them to pay for representation. To get around newly elected Democratic Gov. Mark Dayton, Republicans proposed Right to Work as a constitutional amendment, requiring approval from the voters, but not the governor.

But 16 months later, the Minnesota Legislature ended its session Thursday without a vote to put Right to Work to the voters. The bill has been attached to, then detached from, other legislation. It’s been introduced, and reintroduced. But Republicans won’t give it an up-or-down vote in either house. Just after 2 a.m. on April 27, Republican Rep. Mark Buesgens made a last-ditch attempt to transfer Right to Work from the Commerce Committee, where it had stalled, to the Rules Committee. But Republican colleagues tabled his motion by a 118-to-9 vote. Republican Sen. Michelle Benson, who pushed for the bill’s passage, says it’s now a lost cause until next year’s session.

What happened? In interviews with the Associated Press last month, a spokesperson for the Minnesota Senate majority leader called right-to-work “such a divisive issue.” GOP state Rep. Tony Cornish cited the prospect of “millions of dollars coming in from other states, and thousands of people. Buses emptying out, banners, people camping.” In other words: the fear of becoming the next Wisconsin.

Minnesota AFL-CIO president Shar Knutson says that the year’s high-profile battles in other states had had “a large impact” in discouraging Minnesota Republicans.  “You’ve seen what’s happened in Wisconsin and Ohio,” says Knutson. “There’s a lot of money that goes in, a lot of volunteers, a lot of people out on the streets working hard. So yeah, I’d be nervous if I were them too.” Wisconsin Gov. Scott Walker’s attack on collective bargaining provoked a 17-day occupation of the state capitol and landed him a recall election next month; Ohio Gov. John Kasich’s assault was overturned by voters in a 61-to-39 referendum vote.

Sen. Benson says that the threat of union payback at the ballot box “was enough to divide our caucus.” She attributes her colleagues’ reticence to their “justified concern that the unions, with their massive coffers, will come after people in swing districts.” Asked about the impact of Wisconsin and Ohio, Benson says that “Minnesota is not Wisconsin,” but grants that “Nothing occurs in a vacuum.” Wisconsin and Ohio, says Benson, show that “the unions are afraid of the change that is happening in this country, and they will work vigorously against any attempt to cause them to step back from their current position.”

The ranks of now-reluctant Republicans — call them the Cold Feet Caucus — extends beyond Minnesota. In February, the House Commerce and Energy Committee in deep-red South Dakota voted to kill a bill that would have banned collective bargaining for public workers. The AP reported that Rep. Brian Liss, the bill’s main sponsor in the House, blamed his colleagues’ votes on fears for reelection. Ten days earlier, one of the bill’s Senate sponsors, Republican Stan Adelstein, announced he was withdrawing his support and would oppose the bill instead. “Further study,” Adelstein said in a statement, “has shown me that South Dakota is NOT Wisconsin, and passage of this bill into law would cause grievous harm.” Adelstein may have meant that South Dakota didn’t need the same labor relations “reform” that Wisconsin did. But his constituents could be forgiven for inferring a different message from his all-caps contrast: I’m not a Walker-style Republican.

The presumptive GOP nominee for Washington state governor is also taking pains to send a “What, Me Walker?” message. Last month, in audio obtained by Politico, Attorney General Rob McKenna told a meeting of Puget Sound Carpenters, “Now, unfortunately, because of a couple of governors – particularly Scott Walker – everyone thinks that someone who’s going to be a Republican governor, they’re going to be Scott Walker. I’m not Scott Walker. This is not Wisconsin.” A spokesperson for McKenna’s presumptive Democratic opponent, who has made a point of tying McKenna to Walker, retorted to Politico that McKenna had pushed to privatize workers’ compensation, and “called the unionization of state employees ‘dangerous.’”

After Michigan Republicans passed an “emergency manager” law that allows appointees of Gov. Rick Snyder to throw out some local union contracts, some planned to push their own right-to-work bill. But facing a Wisconsin-style recall effort against Snyder, an Ohio-style referendum effort against the emergency manager law, and a pro-union constitutional amendment drive, the House’s leading right-to-work backer has held off on introducing a bill. Rep. Mike Shirkey told Michigan’s News-Herald last month that he wasn’t dragging his feet on right-to-work because of the pro-union efforts, but declined to say when he would introduce his own bill.

Despite these Republican retrenchments, labor faces a continuing crisis. Witness Indiana, which became the industrial Midwest’s first right-to-work state this year, or New Hampshire, which if not for a gubernatorial veto would have become New England’s. Or Connecticut, where liberal Democratic Gov. Dan Malloy proposed “education reform” that would curb collective bargaining for teachers in “low-performing” schools.

So the Cold Feet Caucus isn’t cause for labor to relax. Rather, it’s a reminder of what’s at stake in higher-profile battles – especially in Wisconsin, where Democratic voters this week nominated Tom Barrett to face down Scott Walker in next month’s recall. Four weeks out, the race is much too close to call. But it’s safe to say either unions or their opponents will emerge emboldened after the June 5 vote – not just in Wisconsin, but around the country.

If Walker ekes out a victory, it won’t represent a decisive mandate for legislative union-busting. But it will be enough to get some Republicans over their cold feet.

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Josh Eidelson is a freelance journalist and a contributor at The American Prospect and In These Times. After receiving his MA in Political Science, he worked as a union organizer for five years.

May Day’s radical history

The date of Occupy's strike has ties to the eight-hour day movement, immigrant workers and American anarchism

This 1886 engraving depicts the Haymarket affair. (Credit: Wikipedia)
This article originally appeared on AlterNet.

American general strikes—or rather, American calls for general strikes, like the one Occupy Los Angeles issued last December that has been endorsed by over 150 general assemblies—are tinged with nostalgia.

AlterNetThe last real general strike in this country, which is to say, the last general strike that shut down a city, was in Oakland, Calif. in 1946—though journalist John Nichols has suggested that what we saw in Madison, Wisconsin last year was a sort of general strike. When we call a general strike, or talk of one, we refer not to a current mode of organizing; we refer back, implicitly or explicitly, to some of the most militant moments in American working-class history. People posting on the Occupy strike blog How I Strike have suggested that next week’s May Day is highly symbolic. As we think about and develop new ways of “general striking,” we also reconnect with a past we’ve mostly forgotten.

So it makes sense that this year’s call for an Occupy general strike—whatever ends up happening on Tuesday—falls on May 1. May Day is a beautifully American holiday, one created by American workers, crushed by the American government incubated abroad, and returned to the United States by immigrant workers.

The history of May 1 as a workers’ holiday is intimately tied to the generations-long movement for the eight-hour day, to immigrant workers, to police brutality and repression of the labor movement, and to the long tradition of American anarchism.

Perhaps the first nation-wide labor movement in the United States started in 1864, when workers began to agitate for an eight-hour day. This was, in their understanding, a natural outgrowth of the abolition of slavery; a limited work day allowed workers to spend more time with their families, to pursue education, and to enjoy leisure time. In other words, a shorter work day meant freedom. It was not for nothing that in 1866, workers celebrated the Fourth of July by singing “John Brown’s Body” with new lyrics demanding an eight-hour day. Agitating for shorter hours became a broad-based mass movement, and skilled and unskilled workers organized together. The movement would allow no racial, national or even religious divisions. Workers built specific organizations—Eight Hour Leagues—but they also used that momentum to establish new unions and strengthen old ones. That year, the Eight Hour Movement gained its first legislative victory when Illinois passed a law limiting work hours.

The demand for an eight-hour day was about leisure, self-improvement and freedom, but it was also about power. When Eight Hour Leagues agitated for legislation requiring short hours, they were demanding what had never before happened: that the government regulate industry for the advantage of workers. And when workers sought to enforce the eight-hour day without the government—through declaring for themselves, through their unions, under what conditions they would work—they sought something still more radical: control over their own workplaces. It is telling that employers would often counter a demand for shorter hours with an offer of a wage increase. Wage increases could be given (and taken away) by employers without giving up their power; agreeing to shorter hours was, employers knew, the beginning of losing their arbitrary power over their workers.

The Illinois eight-hour law was to go into effect May 1, 1867. That day, tens of thousands of Chicago’s workers celebrated in what a newspaper called “the largest procession ever seen on the streets of Chicago.” But the day after, employers, en masse, ignored the law, ordering their workers to stay the customary 10 or 11 hours. The city erupted in a general strike–workers struck, and those who didn’t leave work were forced to by gangs of their colleagues roaming through the streets, armed with sticks, dragging out scabs. After several days of the strike, the state militia arrived and occupied working-class neighborhoods. By May 8, employers and the state they controlled had won, and workers went back to work with their long hours. The loss of the eight-hour-day movement led also to a massive decline in unions, and the labor movement would not pick up in such numbers for almost two decades.

The Illinois law and its defeat, however, were not forgotten. By the 1880s, a new labor movement had grown up in Chicago. This one was more radical and was dominated by immigrant workers from Germany. They remembered 1877, when a strike by railroad workers spread around the country. For a brief moment, as strikers took control of St. Louis and Pittsburgh, staring down the national guard and local police, nobody knew what would happen. But President Rutherford B. Hayes called out the army and brutally repressed the strike. They also remembered the state was rarely if ever on the side of the worker. Yet they also remembered the brief shining moment when it appeared that there might be an eight-hour day.

So in 1886, the Chicago Central Labor Union again demanded an eight-hour day. Led largely by anarchists like August Spies and Albert Parsons, this renewed movement demanded “eight for 10”–that is, eight hours’ work for 10 hours’ pay. Throughout the winter of 1886, they successfully organized and won a series of small victories, largely in German butchers’ shops, breweries and bakeries, where owners agreed to recognize unions and grant shorter hours. Then they issued a new demand: that again on May 1, Chicago would go on a general strike and not return to work unless employers agreed to an eight-hour workday.

The demands of the militant Chicago anarchists coincided with a massive upswing in other militant movements. Workers and Texas farmers were rebelling against a monopolistic railroad system. The Knights of Labor were rapidly organizing and spreading their vision of a cooperative, rather than capitalistic, society. “What happened on May 1, 1886,” writes James Green, the most recent and most accessible historian to have written about it, “was more than a general strike; it was a ‘populist moment’ when working people believed they could destroy plutocracy, redeem democracy and then create a new ‘cooperative commonwealth.’”

Four days later, it all came crashing down. On May 3, police had shot to death six strikers at the McCormick Works, where a long-standing labor dispute had turned the factory into an armed camp, and beaten dozens more. On May 4, anarchists held an outdoor indignation meeting at a square called the Haymarket to protest the police murders. Anarchist leader Samuel Fielden was wrapping up his speech when the police, led by the same inspector who had led the charge at McCormick the night before, moved in to disperse the crowd. “But we are peaceable!” Fielden cried, and just then somebody wasn’t. Somebody threw a bomb at the police, the police open fire, and the course of American history changed.

To this day we do not know, nor will we likely ever know, who threw the bomb. Some say it was an agent provocateur. Some say it was an anarchist. If it wasn’t an anarchist, it surely could have been, since there were indeed anarchists who made bombs and would have thrown one given the opportunity. But we also know that many of those who died that night, including police, were felled by the police bullets.

We also know that the effect of the Haymarket bombing was far greater on the labor movement than it was on the police. Eight anarchist leaders were rounded up and put on trial for the murder of a police officer. No evidence was ever given that any of them threw the bomb, and only the flimsiest evidence was presented that any of them were remotely involved. All eight were convicted, and seven were sentenced to hang. Two of these had their sentences commuted, and a third—Louis Lingg, undoubtedly the most radical and militant of them—cheated the hangman by chewing a detonator cap and blowing off his jaw. The remaining four—August Spies, Albert Parsons, Samuel Fischer, and George Engel—were hanged on November 11, 1887. They went to their deaths singing the Marseillaise, then an anthem of the international revolutionary movement, and before he died, Spies shouted out his famous last words: “The time will come when our silence will be more powerful than the voices you strangle today.”

Before that happened, the state ensured more silence. The strike collapsed. Police around the country raided radicals’ homes and newspapers. The Knights of Labor never recovered. In the place of the radical industrial labor movement of the mid-1880s rose the American Federation of Labor, the much more exclusive and conservative organization that would dominate the labor movement until the 1930s. Meanwhile, it would take until the Fair Labor Standards Act of 1938 to finally enshrine the eight-hour day into federal law.

May 1 would live on, mostly abroad. In 1889, French syndicalist Raymond Lavigne proposed to the Second International—the international and internationalist coalition of socialist parties—that May 1 be celebrated internationally the next year to honor the Haymarket Martyrs and demand the eight-hour day, and the year after that the International adopted the day as an international workers’ holiday. In countries with strong socialist and communist traditions, May 1 became the primary day to celebrate work, workers and their organizations, often with direct and explicit reference to the Haymarket Martyrs. May Day remains an official holiday in countries ranging from Argentina to India to Malaysia to Croatia—and dozens of countries in between.

Yet in the United States, with some exception, the workers’ tradition of May 1 died out. Partially this was because the Knights of Labor had already established a labor day in September. Opportunistic politicians, most notably Grover Cleveland, glommed onto the Knights’ holiday in order to diminish the symbolic power of May 1. In 1921, May Day was declared “Americanization Day,” and later “Loyalty Day” in a deliberately ironic attempt to co-opt the holiday. Even that was not enough, though, and in 1958 Dwight Eisenhower added “Law Day” to the mix, presumably a deliberate jibe at the Haymarket anarchists who declared, “All law is slavery.” Today, few if any Americans celebrate Loyalty Day or Law Day—although both are on the books—but the origins of May Day are largely forgotten. Like International Women’s Day (March 8), which also originated in the U.S., International Workers’ Day became a holiday the rest of the world celebrates while Americans look on in confusion, if they notice at all.

Yet May 1 lives on, and indeed has been rejuvenated in the United States in the past few years. In 2006, immigrant activists organized “a day without an immigrant,” a nationwide strike of immigrant workers and rallies. It was perhaps the largest demonstration of workers in United States history. These immigrants, mostly from Latin America, had brought May 1 back to its birthplace, and in so doing they resurrected its history as a day specifically for immigrant workers.

It is appropriate that when the Occupy L. A. first issued its call for a general strike this May 1, it said the strike was “for migrant rights, jobs for all, a moratorium on foreclosures, and peace.” The order was significant, for migrants in the United States have been the ones who have made sure that the voices the state strangled that November day have remained so powerful. And regardless of what happens on Tuesday—and of course an actual general strike, in which cities grind to a halt and workers control what activities occur, is unlikely—we can, through a national day of action for the working class, work toward a new cooperative commonweath. We have a opportunity now to create and renew the labor movement, through new tactics, but ones that pay homage to the generations that preceded us.

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Jacob Remes teaches history and public affairs at Empire State College, SUNY’s college for adult learners.

Minimum-wage misconceptions

Contrary to right-wing propaganda, decent pay for workers helps the economy and boosts job creation

(Credit: sarken / CC BY 2.0)
This originally appeared on AlterNet.

Sen. Tom Harkin, Democrat of Iowa, has introduced a bill to raise the federal minimum wage to $9.80 from its present level of $7.25. Polls are showing many voters in favor, though they are confused about what it would mean for the job market. The truth is that a move would be good for a slow economy and have a positive impact on the job crisis. Naturally, this has led to the usual cries of opposition, largely based on the notion that raising the minimum wage hurts the very people it is supposed to help. Typical of this view is a letter to the New York Times from Michael Saltsman, a fellow at the Employment Policies Institute, a business-backed nonprofit research group (surprise!).

AlterNetSaltsman trots out the old canards against the minimum wage, claiming that research indicates that a minimum wage increase “simply doesn’t help the poor — in fact, it hurts them.” He cites studies which showed that states with their minimum wages between 2003 and 2007 found no associated decline in state poverty rates. Saltsman gives three reasons for this:

  1. A majority of working-age individuals who live in poverty don’t work and thus cannot benefit from the raise.
  2. A clear majority of those who do earn the minimum wage live in households that aren’t in poverty.
  3. Less skilled and less experienced employees lose employment opportunities when the cost to hire and train them rises as a result of a minimum-wage increase.

Let’s take these arguments in turn. Implicit in the first point is that a majority of working-age individuals don’t work because they choose not to (that is, they are lazy scroungers), or because unemployment is caused by laziness or lack of training. The argument they often use is that “I can get a job; therefore all the unemployed could get jobs if only they tried harder or got better education and training.”

The way I go about demonstrating that fallacy is a dogs-and-bones example. Say we have 10 dogs and we bury nine bones in the backyard. We send the dogs out to find bones. At least one dog will come back without a bone.

We decide that the problem is lack of training. We put that dog through rigorous training in the latest bone-finding techniques. We bury nine bones and send the 10 dogs out again. The trained dog ends up with a bone, but some other dog comes back without a bone (empty-mouthed, so to speak).

The problem is that there are not enough bones and jobs to go around. <!–The “bones” in the jobs discussion are insufficient spending power in the economy.–> It is certainly true that a well-trained and highly motivated job seeker can usually find a job. But that is no evidence that aggregate unemployment is caused by laziness or lack of training. And besides, we could easily determine how much unemployment is truly voluntary. The government could serve as the “employer of last resort” under a job guarantee program modeled on the WPA (the Works Progress Administration, in existence from 1935 to 1943) and the CCC (Civilian Conservation Corps, 1933-1942). The program would offer a job to any American who was ready and willing to work at the federal minimum wage, plus legislated benefits. No time limits. No means testing. No minimum education or skill requirements.

It’s hard to believe that reducing or even eliminating the minimum wage (which is the corollary of Saltsman’s point), would enhance employment, when the problem is a basic lack of demand. Business will not hire more workers until it has more sales. Consumers will not spend more until they’ve got more jobs. A private-sector recovery requires 300,000 new jobs every month. But the private sector doesn’t need 300,000 new workers per month until there exists sufficient spending power in the economy to induce them to hire those workers. How is retaining a static, or reduced minimum wage, going to achieve this?

Higher wages means higher income and thus higher consumption spending, which induces firms to employ more labor. So the truth is that economic theory does not tell us that raising the minimum wage will lead to more unemployment; indeed, theory tells us it can go the other way — raising the minimum wage could increase employment. That’s one of the reasons Henry Ford believed in paying his workers a decent wage: so that they could buy his product.

To be sure, even an increase in the minimum wage to $12 or $15 an hour is not going to provide the means to purchase a Ford (or GM) today. And so what if, as Saltsman argues, the workers earning this minimum wage are not living in poverty? Does that mean they wouldn’t spend the money derived from an increased minimum wage? I wonder if Saltsman would also argue that tax cuts across the board are unnecessary because most of the people who receive them are not living in poverty?

That argument is a red herring. The truth is, if you earn your money through wages (unlike many of the 1 percent, who earn through things like investments and a tax system biased in favor of capital gains over income) then a higher wage, minimum or otherwise, would mean that you’d spend the additional dollars, creating jobs for other workers. You’d pay down your mortgages and car loans, getting yourself out of debt. You’d pay more taxes — on sales and property, mostly — thereby relieving the fiscal crises of states and localities. More teachers, police and firefighters would keep their jobs. America would get a virtuous cycle toward higher employment and, more importantly, the cycle would be based on a policy that creates higher incomes, not higher debt via credit expansion.

Then there’s the common belief that minimum wages cause unemployment, which relates to Saltman’s third point – namely that less skilled and less experienced employees lose employment opportunities when the cost to hire and train them rises as a result of a minimum-wage increase. It is at least partly true that for an individual firm, higher wages reduce the number of workers hired. But we cannot extrapolate that to the economy as a whole. The issue of eroding wage competitiveness, which allegedly follows from a higher minimum wage, doesn’t really apply to jobs that offer the minimum wage. It might apply to areas such as manufactured goods and traded services like insurance and banking. But these are sectors in which most people already earn far more than the minimum wage.

As far as the minimum wage goes, the jobs we’re talking about are in non-traded services like checkout clerks, hair cutters, domestic help and food-service workers. When checkout clerks and cooks earn more in wages, then businesses start getting the sales required to induce them to hire more workers. And if sales are robust enough, then guess what? Even more workers will be hired, or wages will be increased.

The point is that wages are a source of demand, as well as a cost input. Reduce wages and demand plummets, which more than overrides any cost savings derived from paying less to workers (especially given today’s paltry minimum wage, which is hardly a living wage for any American).

Let’s be clear: Americans have never embraced welfare. For better or worse, our nation has always preferred a more libertarian path: self-help, personal responsibility, individual initiative. As a result, our welfare programs have always been stingy, temporary and purposely demeaning. But maintaining the minimum wage at today’s ridiculously depressed level does not enhance anybody’s employment prospects. In fact, it makes things worse, because it sucks demand out of the economy and minimizes the chances of those now receiving unemployment benefits or other assistance to quickly get back into the workforce, to “pull themselves up by their own bootstraps,” as conservatives like to say. They cannot do that when our politicians continue to focus on policies that merely enhance the incomes of the top 1 percent.

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Taxes for union busting

Government contractors are using taxpayer-bought space to crack down on labor -- and Obama's letting it slide

President Obama greets workers during a shift change at V&M Star in Youngstown, Ohio, in 2010. (Credit: Reuters/Jason Reed)

On April 4, Barbara Harms’ boss forced her to attend a meeting about why she shouldn’t join a union. The two-hour, on-the-clock meeting was run by Michael Penn, a professional anti-union consultant. Harms says Penn told workers that “you’re going to sign your life away if you sign a union card … the union would tell you to go out on strike … the place could close down.” The meeting left Harms and other pro-union workers frustrated and angry. Especially because their taxes made it possible.

Harms works at the National Benefits Center (NBC) office in Lee’s Summit, Mo. She’s not directly employed by the federal government but is, instead, a contractor. She is one of about 800 workers there employed by the British company Serco, or Serco’s subcontractors, to process immigration paperwork under Serco’s contract with the federal government ($190 million a year, as of 2009). Penn, meanwhile, is a partner at the anti-union firm Crossroads Group. According to the most recent contract he filed with the Department of Labor (for a different client), his services cost $350 an hour. Serco presumably paid for Penn’s time out of its own pocket. But taxpayers paid for the facilities — from office space to audiovisual equipment — he used to campaign against the union.

Like Harms, many Americans would resent the prospect of taxpayer dollars, or taxpayer-funded resources, being deployed to bust a union drive. President Obama once seemed to be against it, as well. In his first month in office, President Obama signed an executive order apparently aimed at similar situations. Obama’s order forbids government reimbursement for “the costs of any activities undertaken to persuade employees … to exercise or not to exercise … the right to organize and bargain collectively.”

But as Serco and its subcontractors fight to stay union free at the NBC, workers and union staffers say the order has meant less than they’d hoped. And despite Obama’s order, the government says that Serco can use government facilities to fight unionization without breaking the law. Now, some union activists are questioning whether Obama’s support for them is as firm as it once seemed. “We have an executive order that sounds good,” says Chris Townsend, the political action director for the United Electrical, Radio and Machine Workers of America (UE). “But I am yet to be convinced that [it] amounts to anything.”

Serco isn’t the only company to aggressively combat unionization while reaping a taxpayer-funded windfall. A 2010 report from the Government Accountability Office found that the federal government had awarded over $6 billion in contracts in fiscal 2009 to contractors that had been cited for violating federal labor laws, from wage and hour rules to organizing rights. Earlier in 2010, the New York Times reported that the White House was planning to implement a “high road” contracting policy that would direct more government contracts to companies with better labor and environmental records. But by 2011, Obama OMB nominee Heather Higginbottom told senators in a confirmation hearing that there were no such plans afoot.

The current Serco fight began in January, when workers at the Lee’s Summit NBC – an arm of the U.S. Citizenship and Immigration Services (USCIS) — began organizing with UE. Workers say they were spurred to unionize when Serco demoted them en masse in order to avoid expected raises.

The UE director of organization, Bob Kingsley, says Obama’s executive order “has not slowed Serco in its effort” to mount “a classic union-busting campaign.” UE has filed charges with the National Labor Relations Board alleging that Serco’s campaign broke the law, by — among other things — illegally monitoring union activisim and forbidding workers from talking about the union at work. (Serco and Michael Penn did not respond to repeated requests for comment.)

In February, workers say managers required them to watch an anti-union film during work hours. By April, Serco had brought in Penn. UE says that most of the contract employees at the Lee’s Summit NBC site were sent to anti-union sessions led by Penn during the first week in April. One of them, Erica Yount, says Penn emphasized that with a union, “we could lose a lot of the benefits that we have now … the company doesn’t have to give us anything, that they could take stuff away.” Another, who requested anonymity based on fear of retaliation, says it felt like a cult meeting: “It was like being locked in a room with Jim Jones, without the Kool-Aid.”

Reached via e-mail, USCIS spokesperson Tim Counts said that USCIS is in compliance with the executive order, and that the government “will not be billed for the time Serco employees spent” in anti-union meetings, including managers. Some workers say Serco scheduled them for “administrative overhead training” time during the April meetings, presumably so that time would not be billed to the government. But others question the accuracy of the accounting. Harms says that while she attended a meeting at 6:30 a.m., a copy of her schedule showed regular hours in the morning and “overhead” hours in the afternoon. The union also questions whether Serco is accurately tracking time that Penn spent with its own managers, coaching them on their role in the anti-union campaign. (Salon has made a Freedom of Information Act request to USCIS for relevant documents.)

But even if Serco paid all the wages for anti-union meetings on its own, the government is still implicated in them. The government, not Serco, owns the property used for the meetings, including furniture and audiovisual equipment (UE says that Serco also sent workers anti-union memos that employees would be able to access only on their government-provided computers). Asked whether Serco and its subcontractors were required to pay a rental fee or ask permission before using government property to hold mandatory anti-union meetings, Counts responded, “Under the terms of the contract, the contractor is permitted to use government facilities to communicate with its employees without obtaining government permission.”

Serco doesn’t own the NBC office space where Penn held his “captive audience” meetings either. The government rents it from a local technical college. Asked whether Serco paid the government, or the college, to use the space for anti-union meetings, Counts said that under current contracting regulations, “contractors may use facilities rented by the government for activities allowed by the contract but not directly related to services performed for the government.”

But the space isn’t open to everyone – workers note that security guards kicked UE organizer Karen Hardin off the property when she came in hopes of talking to off-duty workers about the union. Asked whether the government, as the lessee of the space, would grant a hypothetical request from UE to meet with off-duty workers in nonwork areas on-site, USCIS’ Counts replied that doing so would not be “consistent” with the requirement that agencies “remain impartial concerning any dispute between labor and contractor management.”

To some workers who were required to attend Penn’s sessions, the government’s role seems anything but impartial. They say the mandatory meetings, which would be intimidating in any setting, had a greater impact on workers because government facilities were involved. “You just want to go up and chew them all out for even thinking that they had the right to do this,” says an employee of one of Serco’s subcontractors, who requested anonymity. But according to USCIS, nothing in the 2009 executive order prevents a professional union-buster from running mandatory anti-union meetings for federal contractor employees using government facilities.

Salon’s inquiries to the White House (regarding whether USCIS’ view is consistent with the executive order), and to the chair of the Federal Acquisition Regulatory Council (regarding how the executive order has so far been enforced), were both referred to a spokesperson for the Office of Management and Budget. In an e-mail, she wrote that the “allowability of costs under cost-reimbursement contracts is governed” by “cost principles,” one of which had been amended to “make unallowable the costs for any activities undertaken to persuade employees” whether to organize. In other words, it’s now government policy to reject requests to reimburse union-busting expenses. But that may not contradict USCIS’ statement, which implied that companies can use government-provided facilities for union-busting purposes. As for the order’s track record, the spokesperson wrote, “The Office of Federal Procurement Policy does not monitor or track the disallowance of claimed costs for which the contractor seeks reimbursement.”

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Josh Eidelson is a freelance journalist and a contributor at The American Prospect and In These Times. After receiving his MA in Political Science, he worked as a union organizer for five years.

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