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Special Offer to Our Readers—$1,500 a Year, for Life | The Nation

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Special Offer to Our Readers—$1,500 a Year, for Life

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Here’s a special offer for our readers: we would like to give you an extra $1,500 a year for the rest of your working life.

 This article is excerpted from Gerald W. McEntee and Lee Saunders's new book, The Main Street Moment: Fighting Back to Save the American Dream (Nation Books).

About the Author

Lee Saunders
 Lee Saunders is the Secretary-Treasurer of the American Federation of State, County and Municipal Employees, AFL-...
Gerald W. McEntee
 Gerald W. McEntee is the President of the 1.6 million-member American Federation of State, County, and Municipal...

It’s really easy.

You want to know how easy? Just live in a state where there are unions. You don’t even have to belong to a union. You don’t have to support unions. All you have to do is have union members as your neighbors. When you do, the median income in your state, which presumably means your income, will be $1,500 more a year, every year, than that of someone who lives in one of those go-ahead-and-rip-me-off states. They’re usually called right-to-work states, but that, like so many of our manufactured labels, is deliberately misleading.

To understand just how misleading it is, look no further than Indiana governor Mitch Daniels, who rammed through a so-called right-to-work bill this year in the Indiana legislature, claiming it was vital to attract jobs. But as recently as 2006, Daniels himself admitted such an argument was bogus, saying, “I’m a supporter of the labor laws we have in the state of Indiana and I’m not interested in changing any of them—not the prevailing wage law and certainly not a ‘right to work’ law. We can succeed in Indiana with the laws we have, respecting the rights of labor and fair and free competition for everyone.”

On another level, getting that extra $1,500 is hard.

It’s hard because you’re up against Wall Street. You’re up against the big banks, the pharmaceutical industry, the insurance companies, Fox News (and for that matter, most of the rest of the media) and now, apparently, the 2012 version of Mitch Daniels. You’re up against the millionaires and billionaires who rent the big-time lawyers and pay the lobbyists and buy our politicians. You’re up against the Republican Party and too many Democrats, too. You’re up against an organized campaign to stop all unions, and since private sector unions have been beaten down to their knees, that campaign is now aimed at public service unions.

But it can be done.

With the backing of her union, AFSCME, the American Federation of State, County and Municipal Employees, a woman who drives a school bus in Ohio, BJ Simmons-Talley, did it, and you can, too.

BJ didn’t do it alone. She had AFSCME. And AFSCME didn’t do it alone.

It was joined by the other public service unions, private sector unions, churches, community groups, small-business owners, and others who understand that a rising tide lifts all boats. And when people have a say and a share in the prosperity they helped produce, America thrives.

We would also like to help you secure your retirement. Whether that’s a pension or just Social Security, we’re sure you want that money to be there when the time comes. You’ve been making contributions to them and to Medicare, in cash and deferred compensation. You have a right to have those investments pay off.

Who do you think will fight for you? Against the companies, in the courts, and in government. There is only one organized group that will do so, across the board. A union.

We’re union people, so that’s no surprise.

You might think that statement is self-serving. We’re not saying that unions are the answer to all your financial problems—though we assume an extra $1,500 a year would help—but it is a matter of record that wherever and whenever there are unions, regular people earn more money.

We would also make the claim, and we will substantiate it, that when unions are strong, our economy functions better. It’s more productive, it grows faster, and it’s more stable. When unions are strong, we don’t have crashes and massive bank failures. When we do have recessions, they’re shallow and short.

Unions played a key role in building the middle class, brick by brick. They will play a big role in reviving it. And who better to tell the story of people fighting to save the American Dream than the very folks who see firsthand the devastation that income inequality has wrought? Who better than the employment services worker who sees the anguish in the eyes of her neighbors as they seek jobs when few, if any, exist? Who better than the bus driver who watches as hungry kids board the bus to school every day, clearly affected by their parents’ money problems and impending home foreclosure? Who better than the correctional officers who see the impact that privatizing prisons has had on our communities, as profit has trumped public safety?

We won’t claim that unions are the only answer to all our problems of income inequality and the quick fix for our economic malaise. That would be foolish and excessive. But they are a vital part of the answer. A necessary element.

As unions are strong, Main Street is strong. As Main Street is strong, the economy is solid and the country is strong. As unions are diminished, we are all diminished. Except for the very richest at the top of the scale, everyone’s income goes down. Except for the top one percent, everyone’s power is diminished, and everyone’s voice loses its force.

At this point you may be saying, “Wait a minute! Wait one darn minute! You told me you were going to get me an extra $1,500 a year. Then it turns out it’s about living in a union state. But I already live in a union state. So, I feel conned and cheated!”

All right, you people smart enough to live in a union state, we have a deal for you, too!

Though this one you have to work for. Or, if you’re lucky, someone else will put in the time and the effort. But, full disclosure, someone does have to work for it.

According to a study by the Center for American Progress Action Fund, “Each percentage point increase in union membership puts about $153 more per year into the pockets of the middle class—meaning that if unionization rates increased by 10 percentage points (about the level they were in 1980)—then the typical middle class household would earn about $1,500 more this year.” That’s $1,500 more to go out to dinner now and then, take the kids to the movies, and maybe even get that new refrigerator you’ve had your eye on, all while investing and growing your local economy.

Once again, if you’re a rugged individualist, or organization averse, let us emphasize that you don’t have to be a member of a union to benefit. For example, taking a look at one business, “for a 10% increase in local union densities in the supermarket industry it is estimated that the wages of union employees in that labor market will increase by 5.3% and by 1.2% for nonunion.” So if you’re not in a union, but union membership rises, especially if it’s in a profession like your own, yours will likely rise, too.

Let’s look at that in reverse for a moment.

Most of our statistics about income distribution are in 20 percent slices of the population. The lowest 20 percent is generally considered the poor. The top 20 percent is the upper class. Though now, with the extreme shifts in wealth, we separate out the top one-tenth of 1 percent of the wealthy from the top 1 percent as the genuine upper class, and everyone below that is sliding down. Still, in most discussions, we look at the group above the lowest 20 percent and below the top 20 percent as the middle class: the employees and residents of Main Street.

In 1968, union membership was close to 30 percent of the workforce. That middle group, representing 60 percent of us, earned 53 percent of the nation’s income.

Now, only about 12 percent of the workforce is represented by unions. The middle class’s share of the nation’s income declined right along with the decline in union membership, down to 46 percent.

Even Ben Bernanke, chairman of the Federal Reserve, who never saw a failing bank he didn’t give a free loan to, agrees that unions have an effect on overall wealth distribution. In a speech in 2007, speaking in his professional economist’s convoluted way, he said, “Whatever the precise mechanism through which lower rates of unionization affected the wage structure, the available research suggests that it can explain between 10 percent and 20 percent of the rise in wage inequality among men during the 1970s and 1980s.” Translation: fewer union members, fewer dollars in your pocket.

It used to be a given that as a worker’s productivity increased, the worker’s pay went up along with it. If someone earned ten dollars an hour turning out a hundred dollars’ worth of widgets, and a few years later he or she was able to turn out two hundred dollars’ worth of widgets in the same amount of time, they would expect that their hourly wage would move toward the twenty-dollar range.

Indeed, that’s exactly what happened for quite a long time.

Since World War II, worker productivity has increased at an average rate of 2.2 percent a year. Until the 1970s, wages rose along with it. Produce more, earn more—we’re all in this together.

In the seventies, the two trends began to separate. Productivity kept going up, but workers stopped getting their fair share. Starting in the eighties, the separation grew more extreme. Union membership in the private sector started a slow decline in the late 1950s. That trend accelerated rapidly from the 1980s on.

At the same time membership in public service unions began to rise. In 2011, 37 percent of public service workers belonged to a union. Naturally, as the public sector unionized, the income of public employees went up.

When these two groups are lumped together, the loss of the relationship between income and productivity is partially masked. If we strip out public service workers and people in fields like nursing, and look at the manufacturing sector alone, we see how dramatic that disconnection is.

“If American workers were rewarded for 100 percent of their increases in labor productivity between 1980 and 2009—as they were during the middle part of the 20th century—then median wages would be $31.98 per hour, or 61 percent higher than the average real wage in 2009,” according to the CAP study.

Median annual income for full-time workers, ages twenty-five to sixty-four, is about $44,000 a year. A 60 percent increase would take that up to $70,400 a year.

When unions grow weak, workers get less. Even more significant, they stop participating in increased profitability. The difference, the excess profit, started moving upward to top management. There was also a dramatic increase in financialization—takeovers, buyouts, mergers, and the like—which sent the profits of that productivity to the banks, financial manipulators, takeover artists, and big law firms. By 2000, virtually all the increases in profitability were going to the top or to financial maneuvering.

If we continue to let unions decline, Main Street’s share of the national income will continue to decline. If union membership goes up, the middle class’s share of the national income will go up. If you are in anywhere except in the top one percent, your income will likely go up.

We were always told that in America, the harder you work the more successful you’ll be. The facts show that’s not the case anymore. It’s time we make it the case again.

Conventional wisdom also says that the rungs on the ladder to higher income are constructed out of diplomas: high school, associates degree, BA, or BS, then a graduate degree. That implicitly makes the claim that high earners have earned their status through discipline, foresight, and hard work, while the income level of low earners, or no earners, is their own darn fault. They should’ve done their homework instead of skipping class and playing video games.

It is also taken to mean that the only real way for a normal, average person—not a pro athlete, rapper, supermodel, supergenius programmer—to make a better living is to get more schooling. Fighting for better wages, asking for a fair share of your productivity, putting labor ahead of big banks, changes in tax policy, and joining a union as ways to increase your well-being are not even subjects worth discussing.

But that’s not true.

According to a study by Bruce Western of Harvard University and Jake Rosenfeld of the University of Washington, Seattle, “Unions, Norms and the Rise of American Earnings Inequality,”“Union decline explains one third of the growth in inequality—an effect equal to the growing stratification of earnings by education.”

In terms of how much money you personally make, returning union strength to where it was in the 1970s could be as good for you as going to Harvard.

As we endeavor to give everyone a college education, we must, at some point, pass the point where the number of college graduates exceeds the number of education-worthy jobs. Then we have a peculiar problem: a conundrum where higher education doesn’t guarantee stable employment.

Indeed, we have entered that territory.

“For the first time in record keeping history, the unemployment rate for those with 4-year degrees or higher has passed the 4 percent mark.”

Last fall, the New York Times did a story called “Generation Limbo: Waiting It Out”:

“We did everything we were supposed to,” said Stephanie Morales, 23, who graduated from Dartmouth College in 2009 with hopes of working in the arts. Instead she ended up waiting tables at a Chart House restaurant in Weehawken, N.J., earning $2.17 an hour plus tips, to pay off her student loans. “What was the point of working so hard for 22 years if there was nothing out there?” said Ms. Morales, who is now a paralegal and plans on attending law school.

Some of Ms. Morales’s classmates have found themselves on welfare. “You don’t expect someone who just spent four years in Ivy League schools to be on food stamps,” said Ms. Morales, who estimates that a half-dozen of her friends are on the Supplemental Nutrition Assistance Program. A few are even helping younger graduates figure out how to apply. “We are passing on these traditions on how to work in the adult world as working poor,” Ms. Morales said.

 

ABC News also did a story on recent college graduates:

“I just graduated from the University of Texas at Austin with a degree in corporate communications and concentrations in business and Chinese,” wrote one. “I thought I would be set once I graduated. Of course, I was wrong. In order to pay the bills, I’m doing random odd jobs, such as cleaning and helping people pack.”

Another told us: “I’m 22 years old with a degree in management from Hofstra University. I’ve been job hunting since May 2009. I’ve been making some money babysitting, but I don’t want to make a career out of babysitting for the rest of my life.”

Or this: “I graduated from Northern Michigan University in August ‘08 with a BS in mathematics. I have applied for nearly 300 jobs and only heard back from a small handful. Got a personal trainer’s certificate.”

Trudy Steinfeld, who runs the Wasserman Center for Career Development at New York University, says there’s no shame in cleaning, babysitting, and personal training. “Obviously, you do whatever you have to do to pay the bills.”

Education has great value. A literate and numerate workforce is a better workforce. Education can be a road to upward mobility. Still, it is not, and cannot be, the solution for everyone. Nor can it fix the destabilization of the nation that has resulted from our economic inequalities.

Unless you are a hedge fund manager, or work in the top echelon of one of the banks that almost ruined the world, or you’ve inherited so much money that you’re bulletproof, you should fight to save the unions. As they go down, Main Street declines. If union membership goes up, your income goes up.

* * *

Few understand the importance of strong unions more than our 1.6 million members. They know the impact not just on themselves and their families, but on the citizens they serve each day at work and on the wider economic landscape in America. As the attacks of 2011 unfolded, they would show unfailing grit when corporate-backed politicians targeted that source of economic strength for the working middle class. Didn’t matter if it was in snowy Madison, Wisconsin, or simmering Memphis, Tennessee. They were ready to fight back.

In Wisconsin, groundskeeper Laura Peterson slept overnight on a cold stone floor in the Madison statehouse to ensure that she would be heard in the morning by lawmakers who were weighing whether she deserved her collective bargaining rights.

At the University of California in Berkeley, lead gardener Kathryn Lybarger was leading a big fight against selling off services to privateers. “We’re very proud of the work we do, serving the university community,” she said. “To ensure that public higher education standards are maintained, we organized against any attempts to weaken our union and take away our rights.”

In Toledo, Ohio, Kelly Leake, who provides job and family services in Lucas County, took umbrage at charges that she was somehow being over compensated for her work. “After nineteen years of employment, I’m still eligible for reduced lunch in my kids’ school. I still drive a 1994 vehicle with 200,000 miles on it. I’m a mother. I’m somebody’s wife. I’m somebody’s grandmother. And I’m tired of being scared of what to do day to day.”

In Lansing, Michigan, elevator inspector Rick Price, a self-described “common guy,” protested against the governor at rallies after he rammed through legislation installing emergency managers capable of disbanding elected school boards and city councils and revoking collective bargaining agreements.

Across the country in San Jose, California, Elena Backman was a workers’ compensation adjuster and a grandmother, but never an activist. Yet when politicians threatened collective bargaining, hard-earned pensions, and public services, she became an outspoken presence at rallies and city council meetings.

Frank Piccioli, a 911 dispatcher in Phoenix, Arizona, has also vowed to “fight back tooth and nail” against politicians who are bent on doing away with workers’ rights.  ”We field about 1.5 million calls a year with less staff and resources,” Piccioli points out. “We want to be part of the solution, but we are being demonized by politicians who are turning their backs on the citizens of Arizona and hurting the very people who save lives.”

Dolores Bressette recently retired after thirty-seven years of service to the people of Rhode Island and contributed on time, every time to her own pension. She planned for her pension to provide her security in retirement. Then politicians in Rhode Island took an ax to it. “On the news, I saw them celebrating. It’s upsetting that they could do this to us. They don’t see us as people. They see us as a number.”

In New York City, Lenny Allen fought the state’s decision to lay off a thousand workers and revoke another eight hundred retirees’ health insurance and supplemental benefits, all while cancer sapped his strength. Further south, in Memphis, Tennessee, sanitation worker Cynthia Hart balanced a grueling schedule at the garbage dumps with an effort to organize her coworkers against the city’s plan to privatize their work.

Robert Montuori, a New Haven, Connecticut custodian, led a similar struggle against privatization attempts by the local school board. “We prevailed because we’re determined to preserve the rights and benefits we’ve fought so hard to gain. If we don’t stand together as one, we’ll be pulled apart piece by piece. We should never forget how we got to be where we are today.”

Across the country, people outraged by these attacks on the American Dream, and tired of seeing jobs lost in their communities, knew that they were up against powerful political and corporate forces. They knew it was going to take a full-fledged movement to win.

And unions had their backs. 

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