The stunning rebirth of the American labor movement

The pendulum is swinging toward countervailing power

ROBERT REICH APR 22

Friends,

On Friday, Volkswagen employees in Chattanooga, Tennessee, voted overwhelmingly to join the United Auto Workers union.

This is a truly big deal. The mainstream media — most of whom no longer have labor reporters — have barely mentioned it, but I believe it marks a major turning point for organized labor.

The victory in Chattanooga is the first successful organizing drive of an automaker outside of Detroit’s Big Three and the first major union victory in the South.

Volkswagen had told workers — in a very conservative Republican area — that the “UAW = Biden” and that the union would “turn Chattanooga into Detroit.” Six southern state governors attacked the union as a threat to “liberty and freedoms” and in a joint statement condemned the UAW’s push to organize in their states.

But the union and the workers triumphed anyway.

We are witnessing a historic rebirth of the labor union movement in America. Labor unions are not just an interest group. They are gaining the heft, solidarity, and passion to become what they once were — a movement.

And it’s about time.

For 30 years — from 1946 to the late 1970s — the American middle class expanded, largely because American labor unions won increases in wages and benefits that roughly tracked gains in overall productivity.

Non-union companies gave their workers similar raises because they knew they’d be targets of union organizing if they didn’t.

As American workers produced more, they got paid more. It was America’s postwar social contract.

As unions gained leverage at the workplace, they also gained political power. Unions supported major federal laws — Medicare and Medicaid, the Civil Rights and Voting Rights Acts, the Family and Medical Leave Act. They became the major force countering the growing political power of large corporations.

But since the late 1970s, union power has been waning. As a result, the wages of production workers have been nearly stagnant, adjusted for inflation. And workers have lost pension benefits and job security.

Think about it. More than four decades of near flat wages, even though the United States economy is now more than three times the size it was four decades ago.

Where did the economic gains go? Mostly to the top.

Whenever I bring this up, some people accuse me of being a class warrior. I’m not. I’m a class worrier. For years, I’ve worried about what would happen to America as the middle class continued to shrink and most of the economic gains went to the top.

Well, I think we’re now seeing the results, as millions of Americans have grown so cynical and despairing about their chances to make it that they’re even willing to support an authoritarian sociopath for president.

As the voices of workers became muted inside corporations, their voices also became muted in Washington.

Why else would America enter into trade agreements that caused millions of working people to lose their jobs, without access to new ones paying them at least as much? Why else would entire regions of the nation be economically abandoned, without any concerted national effort to reverse the tide?

More states fell for the snake oil of so-called “right-to-work” laws, which should be called “right-to-work-for-less” laws.

Meanwhile, Wall Street was deregulated, allowing ever more of our economy to become dominated by the moneyed interests.

To add insult to widespread injury, Wall Street was bailed out after it brought the world to the precipice of economic Armageddon. Millions of people lost their jobs, wages, and homes in the financial crisis, but not a single major Wall Street executive was charged with a crime.

Corporate raiders got the right to mount hostile takeovers of companies and then demand bigger profits. And since payrolls comprise about two-thirds of corporate costs, the raiders forced corporations to limit wages and benefits.

To achieve this, corporations sought to bust unions — outsourcing jobs abroad and moving to “right-to-work-for-less” states. They also illegally fired workers who tried to organize — at worst getting their hands slapped by a National Labor Relations Board that might eventually order them to reinstate workers and give them back pay.

Ronald Reagan legitimized all this when in 1981 he fired more than 11,000 striking air traffic controllers represented by the Professional Air Traffic Controllers Organization.

The result was a dramatic decline in the bargaining power of ordinary workers — both inside companies and in American politics. And with this decline came a shrinkage of the American middle class. It’s estimated that between 1979 and 2017, the typical U.S. worker lost out on $3,250 in pay every year due to the decline of unions.

In the 1950s, over a third of all private-sector workers were unionized. Today, unionized workers comprise just 6 percent of private-sector workers (10 percent of all workers belong to a union, but many work in the public sector).

From 1946 through the early 1970s, unions staged hundreds of major strikes each year. Between 1981 and 2022, the number of major strikes dropped to a few dozen per year.

But here’s the good news: The pendulum is now starting to swing back.

It’s not just the UAW. Recent contracts negotiated by Hollywood writers, UPS workers, Kaiser Permanente health care workers, and even university employees, among others, provide significant pay increases and more job security (writers even got some protections against AI).

Last year’s union contracts gave workers an average first-year wage increase of 6.6 percent — the highest raise since at least 1988. With signing bonuses and other lump-sum payments added in, 2023’s average first-year wage increase was 7.3 percent, also a record high.

Overall, according to the Bureau of Labor Statistics, U.S. union membership grew by 191,000 workers last year — although the share of employees represented by a union fell slightly as strong job growth outpaced organizing efforts.

More good news: Most Americans are solidly behind unions. Approval of labor unions is near 70 percent, the highest point in five decades. At the same time, confidence in big business is at its lowest point in decades.

What accounts for this burst of labor activism and public support?

Partly, I think, it’s the harsh inequalities exposed by the pandemic. The pandemic dramatically revealed how much easier it is for rich Americans to survive than everyone else and how dependent all of us are on average workers just doing their jobs.

Couple this with the rise in populist politics in a system looking increasingly rigged against average people — starting with Bernie Sanders’s surprisingly strong showing in 2016, while Donald Trump posed as the “voice” of workers.

Union victories have fueled a virtuous cycle — encouraging more workers to join unions and more unions to flex their muscles and demand wage hikes.

Then there’s the tight post-pandemic labor market, in which consumers are spending like gangbusters, the economy is surging, and employers worry about getting and keeping the workers they need.

Not the least is Joe Biden — the most pro-union president America has had in 60 years. And a National Labor Relations Board that’s the most pro-union board I’ve seen in decades.

“Congratulations to the workers at Volkswagen in Chattanooga, Tennessee, on their historic vote for union representation with the United Auto Workers,” Biden said Friday in a statement.

Don’t wait for Trump to say anything positive about what just happened in Chattanooga.

Finally, both good news and a sign of how resistant corporations have become to unions: The share of non-union workers who would like to have a union at their workplace is far higher than the share who actually have a union representing them.

This is good news in terms of potential organizing drives. But it’s also evidence of the continuing effectiveness of corporate union-busting and the need for much stronger federal labor laws.

I believe the pendulum will continue to swing toward unions. Which means better wages and working conditions, a larger middle class, and laws and regulations that benefit the many rather than the few. And the possibility that America’s working class will return to the fold of the Democratic Party, where it belongs.

At a time when there’s a lot to be disillusioned about, this is the clearest, most positive trend in America.