Betty Dukes testifies on Capitol Hill in Washington, Wednesday, June 29, 2011, during the Senate Judiciary Committee hearing to examine the factors at issue in the Dukes v. Wal-Mart Stores Supreme Court ruling. Dukes, a Wal-Mart greeter in the San Francisco area, was the plaintiff in the largest gender bias class action lawsuit in US history, which charged Wal-Mart with discriminating against women in promotions, pay, and job assignments in violation of the Civil Rights Act. (AP Photo/J. Scott Applewhite)
These are not the best of times for American workers. Real hourly wages have not increased since the 1970s, and the post-employment picture is nearly as bad: defined-benefit pension plans have all but disappeared, and three-quarters of those people approaching retirement possess less than $30,000 in savings. Meanwhile, unlike wages, productivity gains have been robust. As workers toil harder and longer, decade after decade they have earned far less than a fair slice of the wealth created. This is the plight of the 99 percent.
What workers lost did not vanish; it has simply trickled up. Way up. Much has been rightly made of the 1 percent’s grip on 20 percent of total national income, but the top 0.0001 percent alone takes 5 percent of that, a figure that has quintupled since workers last experienced a real wage gain. By these and other measures of income inequality, the United States stands alone among industrialized nations.
This is not a new American story, however. Comparable levels of inequality existed before and during the Great Depression, and wage gains had also stalled. And yet, by the late 1930s, as the Depression ended, income inequality had begun to narrow and continued to do so until the mid-1970s.
What happened? To be sure, the economic landscape shifted with America’s entry into World War II and the stimulus of war production. But economic policy had also been transformed by New Deal legislation. The National Labor Relations Act (NRLA) of 1935 guaranteed workers a right to form unions and embedded collective bargaining in the nation’s fabric. Today, it is worth recalling the rationale that Congress set forth in the act:
The inequality of bargaining power between employees who do not possess full freedom of association…and employers who are organized in the corporate or other forms of ownership association…tends to aggravate recurrent business depressions, by depressing wage rates and the purchasing power of wage earners in industry.
In other words, Congress recognized that economic crisis was linked to disparities in wealth, which, in turn, were inseparable from imbalances of power in the workplace. The remedy was the NLRA, granting workers a right to assert a collective voice in dealing with employers. In 1937 the Supreme Court affirmed the law as a constitutional exercise of the commerce power that enabled workers “to deal on an equality with their employers” and created democracy in the workplace by guaranteeing the “fundamental right” to “self-organization and to select representatives of their own choosing for collective bargaining…without restraint or coercion by their employer.”
Today, that system of employee rights is in jeopardy. Its legal foundations have been eroded by Court rulings over the past forty years—rulings issued alongside increasing employer resistance to unions, outsourcing and intensifying global competition. As William Yeomans writes on page 14, the Court’s role in curtailing labor rights was envisioned in Lewis Powell’s 1971 memo to the US Chamber of Commerce urging business to plead its case before “an activist-minded Supreme Court.”
Since then, the Court has discounted the value of labor organization to the nation’s political economy, restricting three basic guarantees of labor law: the right of workers to learn about unions; the right of workers to organize and choose union representation; and the right of workers to enter into collective bargaining about all matters touching their employment. The 99 percent have paid the price: since the 1970s, union representation has drastically declined and, partly as a consequence, economic inequality has widened.