Corporations, Labor, and the Need for Stronger Unions

By: Martin Donohoe  Posted on

Introduction

Conservative economist Milton Friedman once said, “The [only] social responsibility of business is to increase its profits.” Noam Chomsky was more blunt. He stated, “Corporations [have] no moral conscience. [They] are designed by law to be concerned only for their stockholders, and not…their stakeholders, like the community or the work force.”

This essay will focus on the work force. I will address wages, benefits, sick leave, retirement savings and wealth inequalities. I will also discuss the decline in union membership over the last 60 years, along with ongoing threats to labor’s voice in the workplace.

Wages Versus Living Wages

Weekly wages for the average American worker are up just 9% from 1973, but productivity is up 72%. The current federal minimum wage is only $7.25/hr, although 25 states and the District of Columbia have higher minimum wages. The real value of the minimal wage, adjusting for inflation, is down over 40% compared to 1968. Thus, even those who work a full-time minimum wage job often have inadequate funds to pay rent and to buy food and clothing. Indeed, ¼ of all US jobs pay less than a poverty-level income. Furthermore, wage theft, which costs American workers $15 billion/yr, is not uncommon, and is more prevalent among the lowest paid workers. It is therefore not surprising that over ½ of the nation’s basic public assistance funds go to working families. For instance, in 2016 US taxpayers paid $170 million/yr to cover public assistance for Walmart employees, while Walmart CEO Doug McMillon received $22 million in compensation and the 6 Walmart heirs controlled more wealth than the bottom 42% of Americans combined.

There are movements supporting a $15/hr so-called living wage, but this amount is still inadequate for those living in expensive metropolises. Over 140 municipalities have thus far adopted living wage laws, including New York City, Los Angeles, San Francisco, Seattle, Chicago, and Philadelphia. However, 24 states have passed pre-emptive laws rolling back gains or forbidding cities and counties from raising the minimum wage.

Paid Time Off

While 70% of full-time workers and 64% of private sector workers in the U.S. have paid sick leave, only 19% of part-time workers do. The U.S. is the only Organization for Economic Cooperation and Development country not to guarantee paid sick leave, although many cities and some states do. For those with a new baby, there is the Family and Medical Leave Act, however this applies to a small minority of parents and is unpaid. Indeed, the US and Papua New Guinea are the only 2 countries which do not guarantee paid maternity leave, and lack of paid maternity leave is linked to lower rates of breastfeeding and childhood immunizations, higher rates of infant and child mortality, and higher risk of depression in new mothers.

Corporations Versus Labor

The rise of the corporation has been accompanied by increasing industry consolidation and mergers; inflation; rising unemployment and job loss through automation, improved technology, and outsourcing; and the rise of the “permatemps,” who are ineligible for most benefits and can be fired at will. Millions of Americans have lost their jobs, others retired early, and many face decreasing benefits and limited retirement savings. In fact, today 50% of U.S. households have no retirement savings. And while Obamacare has reduced the number of uninsured individuals, 28 million Americans remain uninsured, and workers are paying higher premiums, co-pays, and deductibles. Health care costs have shifted away from corporations and insurance companies and onto workers. Meanwhile, corporate crime costs hundreds of billions each year, 20-30 times as much as street crime, yet it is under-prosecuted, with meager penalties often considered merely a cost of doing business.

Labor Unions in the 20th Century

Labor unions have a proud history in the United States. We have them to thank for the 40-hour workweek, vacation and holiday pay, the abolition of child labor, many occupational safety and health standards, the minimum wage, collective bargaining leading to fair salaries and retirement and health benefits, job security, unemployment insurance, and much more. Unionized workers earn higher salaries; have better health, retirement, and disability benefits; and labor under safer working conditions. And, industrialized countries with a greater fraction of workers in unions invest more in social welfare.

In the early 1950s, 1/3 of the American labor force was unionized; by 2012, the proportion was down to 11%, constituting roughly 5% of those working in the private sector and 40% of those laboring in the public sector. In turn, unions’ political power has diminished. Unfortunately, labor unions have historically failed to adequately partner with their natural allies among other socio-economically marginalized groups, such as people of color and immigrants, fearing competition but in the process weakening each group’s social and political power.

Collective Bargaining and “Right-to-Work” Laws

Labor unions are currently under threat by the Supreme Court case, Janus v AFSCME (the American Federation of State, County, and Municipal Employees), which will decide whether unions can charge non-members to cover their share of collective bargaining costs. The plaintiff argues that such charges violate his freedom of speech, while the defendants argue that non-dues paying members reap the benefits of collective bargaining without helping to offset the costs. This is because unions are legally bound to represent all workers within a collective bargaining unit, not just dues-paying members.

The plaintiff’s case is supported by advocates of so-called “right to work” laws, including conservative organizations with links to the billionaire Koch brothers. It is widely expected that the conservative court will side with the plaintiff, which could then make opting out of union membership more attractive, thus further decimating union membership. A side effect of such a decision would be less money for unions to spend on get out the vote campaigns, which tend to increase democratic turnout, and could have a significant effect on the 2018 Congressional elections.

Lobbying

It is worth noting that the U.S. Chamber of Commerce, the largest business lobby, spent $104 million on lobbying in 2016, an election year, and $82 million on lobbying last year. The organization tops the list of groups spending anonymous, or dark, money on elections, a phenomenon made possible by the Supreme Court’s 2010 Citizens United decision. Its CEO Tom Donahue is the highest-paid corporate trade group chief. By way of comparison, the AFL-CIO (a federation of unions) and the SEIU (Service Employees International Union), one of the two largest labor unions, spent a combined total of just $5.6 million on lobbying in 2016 and only $5.1 million last year.

Conclusion

We need to see a resurgence of strong labor unions in the country to protect and expand the rights of workers. Alice Walker wrote, “The most common way people give up their power is by thinking they don’t have any.” Workers need to find and display their power, individually and collectively. Nobel Prize-winning author G√ľnter Grass said, “The first job of a citizen is to keep your mouth open.” That is what we must all do.

Martin Donohoe, MD, FACP practices internal medicine, is the host of the cable television program Prescription for Justice (https://www.youtube.com/channel/UCJt34I9c5vT2RpZtkg6Im2A), and runs the Public Health and Social Justice website (http://www.publichealthandsocialjustice.org or http://www.phsj.org), where you can find his slide shows, articles, syllabi, and information regarding his book, Public Health and Social Justice (seehttp://phsj.org/public-health-and-social-justice-reader/ for additional ordering information, endorsements, and table of contents.