How the Defeat of Trade Unionism Gave Rise to Low-Wage Jobs

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JAISAL NOOR, TRNN PRODUCER: So we wanted to give you a chance to kind of give some context to the increasing use of low-wage workers across America and other countries and the protest against that trend. And a big, a major driving force for these protests--and it's been--this has been used to kind of criticize them as well--are major unions like SEIU. But major unions weren't always interested in organizing these low-wage workers. What's brought about this change?

LEO PANITCH, PROF. POLITICAL SCIENCE, YORK UNIVERSITY: Well, you know, I think people are missing, in all the attention that's being paid to the vastly growing inequality in the United States and other Western capitalist countries, that the fundamental reason for it is not some shift in taxes, but the fundamental reason for it has been the defeat of trade unionism in the United States and elsewhere, at least since the early 1980s. Insofar as there was a tendency to the equalization of incomes--and it by no means went all that far in the postwar period--it was because for a few decades after 1945, trade unions were strong vis-à-vis their employers. And that had to do with some legal rights they'd won. It also had to do with the wage militancy of those unions and their ability to coerce corporations to pay workers higher wages, better benefits, give them more secure employment. And the reason that CEOs didn't pay themselves the astronomical amounts they pay themselves today was precisely because of the bad example it set in terms of the next collective bargaining round.

Now, what has happened everywhere, although especially in the United States, is that unions have been defeated. That was a concerted effort on the part of employers through the 1970s and 1980s. It was aided by the Federal Reserve's very high interest rate policy, which purposely drove up unemployment. And in driving up unemployment, it gave the unions a loss of nerve.

And it was added to by such actions by the Reagan administration as the ending of the PATCO strike, the strike of the air traffic controllers, and the imprisonment of their members. And this was a union that had voted Republican in 1980. It voted for Reagan in 1980. And it had to do with a shift of a good deal of industry to the American South, to those states where there were so-called right-to-work provisions, i.e., right to not belong to a union--right of employers to prevent you joining a union is what it really means. And then it had to do with the fact that so much of the enormous growth in retail services in the United States--and elsewhere, but especially the United States--has taken place in jurisdictions where it is difficult to unionize, especially, again, in the American South. And that then has spread like wildfire around the country and capitalism more broadly. That's the fundamental reason for the growth in inequality.

The tax system only tinkers with the incomes we get in the labor market. It can adjust those. It can make some slight--have some effect on them, whether taxation is more or less progressive. But the main fundamental reason has to do with the incomes that people get in the labor market. .........................(more)

The complete piece is at: http://truth-out.org/news/item/20462-how-the-defeat-of-trade-unionism-gave-rise-to-low-wage-jobs