Shutdown victims remind us of unions’ value

Bill Knight column for 3-21, 22 or 23, 2019

Before disgraced attorney Michael Cohen told Congress that President Donald Trump was a cheat, journalists exposed how the real-estate developer for years had treated his workers and contractors: badly.

Infamous for funny business in fully paying those who worked on his projects, Trump seems to have carried a grifter’s management style into his administration.

About 800,000 federal employees were hurt by the 35-day holiday shutdown, reports the AFL-CIO, which says the record-breaking disruption continues to hurt working people months after the shutdown ended.

“To make matters worse, more than 1 million federal contractors lost a month of paychecks during the lockout and, unless Congress acts, they will never receive that pay,” the labor federation said.

Trump opposed any deal ending the shutdown if it included back pay for federal contractors forced to work without pay or sent home during the shutdown. So, the 1,768-page deal putting federal employees back to work didn’t include paying federal contractors or their workers.

 “Just in case you need more evidence that Donald Trump doesn’t care about American workers, he views giving back pay to federal contractors like custodians and food-service workers as a deal-breaker,” said U.S. Rep. Mark Pocan (D-Wis.), co-chair of the Congressional Progressive Caucus. “This is egregious – especially since he is the reason they didn’t get paid.”

Unfortunately, many contract workers aren’t unionized, so they have little recourse to address this grievance. Their only hope is the Fairness for Federal Contractors Act of 2019 introduced by U.S. Rep. Donald Norcross (D-NJ). It would provide back pay for federal contract workers affected by the shutdown, but its chances in the Republican-controlled Senate are slim.

Had those contract workers been unionized, their collective-bargaining agreements would have had mechanisms to enforce provisions of their labor contracts. Indeed, federal workers in more than a dozen unions – such as the American Federation of Government Employees, the International Federation of Professional & Technical Engineers, and the National Treasury Employees Union – had some protection. Further, they and all unions negotiate to fight wage stagnation, income inequality, working conditions and benefits by organizing on the job and in society in general.

Unions’ importance has been neglected or forgotten, and only crises such as the shutdown remind us.

Economists Richard Freeman and James Medoff in 1979 argued that “by providing workers with a voice both at the workplace and in the political arena, unions can and do affect positively the functioning of the economic and social systems.”

Their report, “The Two Faces of Unionism,” showed data confirming that organized labor had:

* reduced the country’s overall wage inequality despite economics books that cautioned about unions’ power;

* cut labor-force turnover, lowering employers’ costs tied to recruiting, training and retaining workers;

* decreased pay disparities based on race; and

* engaged in political activity that benefitted the nations’ working class, unionized or not.

Now, 40 years later, other economists are rediscovering organized labor’s value. Unions for decades have been vital for the working and middle classes, according to a May 2018 paper by economists Henry Farber, Daniel Herbst, Ilyana Kuziemko and Suresh Naidu.

That National Bureau of Economic Research study – “Unions and Inequality over the Twentieth Century: New Evidence from Survey Data” – uses some 70 years of statistics on union-organizing rates as long ago as 1936, the year after Congress passed the National Labor Relations Act legalizing and empowering private-sector workers to unionize. As unionization goes up, inequality tends to go down (and vice versa), the authors showed.

“Given the contrast between the Golden Age of 1940-1970 and the current age of spiraling inequality, wouldn’t it make sense to bring unions back?” asked Noah Smith, a Stony Brook University finance professor who now writes for Bloomberg View. “It might be worth it.”

The political climate has contributed to weakening for unions and worsening inequality. Government policies and practices such as appointing anti-union ideologues to regulatory agencies, supporting commercial globalization, and enacting Right to Work laws all damaged workers’ influence.

“Supporters of free markets should rethink their antipathy to unions,” Smith wrote. “Other than massive government redistribution of income and wealth, there’s really no other obvious way to address the country’s rising inequality. Also, unions might be an effective remedy for the problem of increasing corporate market power – evidence suggests that when unionization rates are high, industry concentration is less effective at suppressing wages. Repealing Right to Work laws and appointing more pro-union regulators could be just the medicine the economy needs.”

Meanwhile, employers who are federal contractors as well as their workers might consider unionization as a tool to use with future government agreements.