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The Inclusive Economy
Labor Unions and Economic Opportunity
Posted on 04/06/2011 @ 01:15 PM
Since the 1930s, strong labor unions, both in the private and public sectors, have played an integral role in enabling hard-working Americans to obtain a piece of the American Dream. It is no secret that labor union membership increases wages for both unionized workers and non-unionized workers, affecting the latter through raising the prevailing wage for a particular industry or geographical area. It is less well known that union membership is important for asset development, as well.
Labor union members are significantly more likely to own their homes than their non-unionized peers. This is important in a society where, even after the bursting of the housing bubble, most of the wealth of middle and working class Americans can be found in their homes. Labor unions have also fought hard for years to secure high-quality benefits packages for their members, such as first-rate health insurance and defined benefit pensions. Access to adequate health care and a retirement without the fear of falling into poverty are important assets. Furthermore, labor unions exert a powerful influence on the non-unionized labor market in terms of benefit packages. Much like their effect on prevailing wages, labor unions increase the quality of benefits packages even for workers that are not unionized. It is easy to see the positive effect of unions on both wages and asset development.
In light of the evidence that union membership enables everyday Americans to live decent and successful lives, the recent trend of states stripping public workers of their collective bargaining rights in an effort to balance their budgets on the backs of hard-working Americans is deeply disturbing. At the time of this writing, the only thing standing between Wisconsin’s state government enacting a law that essentially destroys the labor unions of teachers, firefighters and other vital public employees is a temporary restraining order issued by a Madison Circuit Court Judge. Ohio, New Jersey and Indiana are also attempting to adopt measures that drastically weaken the collective bargaining right of public workers.
The good news is that Americans stood up and protested for the rights of people who teach our children and keep our families safe. It is obvious that most Americans believe in the power of labor unions to better the lives of all working people. The bad news is, in this age of 24-hour news cycles and bifurcated media outlets, it is anybody’s guess how long Americans will be willing to advocate for labor unions. It is possible that this issue could get lost in the shuffle of the new political outrage of the moment and the rigors of everyday life.
The last time the United States faced budget shortfalls of this magnitude was during the Great Depression. Instead of stripping workers of what little rights they had in the early ‘30s, the federal government stepped in and upheld the collective bargaining rights of those fortunate enough to be employed. Did the economy fall apart under the weight of skyrocketing wages and exorbitant benefits packages? No. In fact, the opposite occurred. The United States clawed its way out of a Depression and, during the post-World War II era, experienced some of the most robust economic growth the world has ever seen.
Eighty years ago, the United States had the foresight to see the potential for labor unions to build assets and allow the hard-working Americans on whose labor this country was built a piece of the American Dream. That strategy worked. Labor union membership has been proven to improve the lives of all workers through wage increases and asset development. The troubling attacks on unions in recent months are disconcerting for someone who cares deeply about the well-being of Americans whose hard work allows our society to function. If labor unions become a thing of the past, a crucial vehicle for asset development for average Americans will disappear with them.
Jason Gray is a Master of Public Policy candidate at the Heller School for Social Policy and Management at Brandeis University with an expected graduation date in May 2011. Through his concentration in poverty alleviation, Jason has focused his work on asset development and the intersection of the private, public and nonprofit sectors. Before attending the Heller School, Jason worked as an account manager for the Corporate Executive Board, a best-practices research firm in Arlington, VA.
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