People blame the unions whenever a company packs up its operation and moves it overseas. The classic Reagan-era excuse was that greedy and demanding unions got too big for their britches and forced otherwise benevolent companies to move away. But have you noticed that entire industries that have never had any experience with unions are also making a mad dash for the third world? Cases in point: the tech industry or the customer service call centers for any industry.
While the rank and file engage in a heated debate as to whether or not unions are justified, the CEOs have been running to the bank unabated. Regardless of which side you are on, if you are fighting that fight, then you (like me and many others) fell for the diversion tactic.
I propose another explanation: I believe companies packed up and moved overseas simply because they could. Advances in transportation, communication, as well as advances in the third world nations themselves, made it easier for multi-national corporations to set up shop in places like Indonesia, Vietnam, etc. The businesses themselves also matured to the point where they were ready for such a change. A lot of industries started off as mom & pop shops, quickly growing to a larger operation, then multiple operations, etc.
Whether Americans are unionized or not, there is no way we can compete with people willing to work for mere cents a day. Even factoring in the large transportation expenses and set-up costs, businesses have been exuberantly clear that the savings in labor more than make up for any additional costs for having a split operation (management in America, manufacturing in the third world). I have no doubt that the demands of unions were a factor that irritated businesses—no question. But unions were not the foundational reason that prompted this seismic shift that has been going on the last 30 years. Industries that have no experience with unions are following the same trends.
You could argue that multi-national corporation are no strangers to the developing world: sugarcane plantations and diamond mines have been around for 500 years, if not more. In those cases, though, I would argue that they had to be there. The businesses themselves would invest in the nation’s infrastructure since there was nowhere else to harvest that produce or mine those minerals. There is more flexibility with a modern sweatshop. It is an employer’s market, if you will. They can set up their factory anywhere, so they can put more pressures on the local governments to put in that infrastructure for them. They can wait until conditions are favorable.
Statistics are clear that there is no less wealth in America. It is just concentrated among an increasingly smaller and smaller group of people. Real wages for the lower and middle class have been stagnant for 30 years. I know this from personal experience: A union factory worker could make $10-12 per hour in the early 80s. He could support a family on a single income and do it quite well. I have meandered around factories, warehouses and other industries, and even in the year 2011 one would be lucky to work for $10-12 per hour. What kind of lifestyle can you have today making $10 per hour (roughly 20 grand annually)? The price of everything has increased sharply, yet wages have not kept up with inflation. The result: the standard of living has gone down for most Americans. We are in a 30-year slow cook, and the boil is coming on just gradually enough for us to not realize it until it is too late. I have heard that frogs will leap out if thrown into a pot of hot water, but they are unable to respond if placed in a pot of cool water that heats up slowly.
Unions raised the standard of living for the lower and middle classes of America. There is no question about that: Advances that were won by the unions were directly the same advances that increased the standard of living for workers: Higher wages, better safety conditions, child safety laws, the 40-hour work week—these were the achievements that improved the standard of living of the lower and middle classes and they were fought for and won in large part by the unions. The existence of unions was not a mere correlation to advances in the standard of living in America. They were absolutely causational.
Most Americans today probably would not have liked living in the America of 100 years ago. The “home of the free” was not much different than a modern third world nation—our forefathers worked 16-hour days in often deadly conditions “for peanuts,” as they would say. They lived in tenements and shacks. Maternity leave consisted of an afternoon off, if you were lucky. Have we forgotten Upton Sinclair’s The Jungle? The increasing gap between rich and poor is not an empty political talking point. It is the grim reality of daily life. Businesses and politicians capitalize (literally) on the fact that most people either do not know or remember what it was like just 30 years ago.
All of this does not bode well for those of us in America. Our labor is competing with third world labor. It does not look promising to imagine where this will lead when followed to its logical conclusion. I have a sinking feeling that we are going to find out up close and personal where it leads, though.
I definitely urge America and especially Ohio (which is right now fighting for the life of collective bargaining in the public sector) not to vote against the interests of organized labor. Like any human operation, you can point to some faults and flaws among unions, but I would argue that it is dangerous to conclude that we would be better off without any unions. "The unions once served their purpose, but now they more problem than they are worth," you may hear. But just as the rise in the standard of living corresponds to the rise in organized labor, so too does the decline in that standard of living correspond to the decline in organized labor.
Regardless of how we vote, my worry is that organized labor may not be as effective as it once was in securing a more even distribution of the wealth. The tools and methods it has used historically are harder to apply in the modern marketplace. Workers acting as a group were able to control the supply of labor into an economy and make demands as a result. That was very effective when the supply of labor was limited to a small region. Now that advances in communications and transportation have made almost the entire 6 billion people of the world as potentially a part of the labor supply of many industries, the kind of global solidarity that would be required to use the same union methods as before seems far outside of the range of possibilities right now. Companies can pick up and move so easily now.
The industries that have been able to maintain their collective bargaining power have been those where outsourcing is simply not possible—such as teachers, for instance. Still, every industry that maintains collective bargaining provides a "bump" in the standard of living for all of us. There is a positive spillover effect as even non-union workers demand better terms in their employment. Likewise, every industry that loses that right will most likely also be knock to other industries, too.
Here is the bottom line, and it affects your bottom line: Whether lower and middle class workers act collectively or not, the results will be felt collectively.
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