Can Labor Revive the American Dream?

The financial markets are in tatters, consumer spending is anemic and
the recession continues to deepen, but corporate America is keeping its
eyes on the prize: crushing organized labor. The Center for Union Facts,
a business front group, has taken out full-page ads in newspapers
linking SEIU president Andy Stern to the Rod Blagojevich scandal. The
Chamber of Commerce is capitalizing on the debate over the Big Three
bailout to claim that "unions drove the auto companies off the cliff,"
while minority leader Mitch McConnell and other Republican senators
insist on steep wage cuts. A December 10 Republican strategy memo
revealed their central obsession: "Republicans should stand firm and
take their first shot against organized labor," the memo read. "This is
a precursor to card check"--a clear reference to the Employee Free
Choice Act.

This simple amendment to federal labor law, which would, among other
things, allow workers to unionize when a majority sign cards rather than
requiring a bruising election, has galvanized the business community in
a way even the $700 billion bailout couldn't. "I get the sense that this
is more important to them than even taxes or regulation," says the
AFL-CIO's director of government affairs, Bill Samuels. "This is about
power. And the business community is not going to give up power
willingly." Wal-Mart CEO Lee Scott said as much to a meeting with
analysts in October. "We like driving the car," he told them, "and we're
not going to give the steering wheel to anybody but us."

In the lead-up to the election, the co-founder of Home Depot, Bernie
Marcus, called Employee Free Choice "the demise of civilization."
Wal-Mart summoned store managers into mandatory meetings to warn them
against it. Industrial launderer Cintas launched a website to oppose it.
The retail industry associations paid blue-chip lobbying firms to block
it. The Chamber of Commerce hired Bush Labor Secretary Elaine Chao's
chief of staff to run its opposition campaign, which trashed the bill as
antidemocratic because it allows workers to bypass a formal election.
Business groups spent tens of millions on ads attacking Democrats in
tight Senate races, including $5 million targeting challenger Jeff
Merkley of Oregon, a supporter of the bill who was smeared with a mailer
accusing him of doing the bidding of corrupt labor leaders and trailed
at every campaign appearance by a grim reaper claiming "Merkley kills
democracy." "I've never seen anything like it," says Merkley's campaign
manager, John Isaac, "where a group spent so much money to insert their
issue into a campaign."

At first glance, Employee Free Choice looks like little more than a
technical fix. In addition to allowing unionizing through majority
sign-up, it stiffens penalties for intimidating or firing union
supporters and imposes arbitration when a company refuses to bargain a
first contract. But as the leading corporate lobbies recognize, the bill
could have far-reaching effects. By reviving unions, it could push up
wages, realigning the broken economy so that company profits are spread
beyond CEOs. It could help rein in corporate power and, perhaps most
threatening to a business community that has enjoyed decades of
deregulation, sustain a progressive majority in Washington in the years
to come. If progressives aren't doing the math, conservatives are.
"Unions don't spend money to elect Republicans," Senator John Ensign
told a group of executives this past fall. "They spend money to elect
Democrats. From our perspective, this would have devastating
consequences."

Throughout his run for president, Obama was explicit in his support for
Employee Free Choice and his understanding of the forces arrayed against
it. "If a majority of workers want a union, they should get a union;
it's that simple," he told union members in Pennsylvania in April.
"Let's stand up to the business lobby." Since his election, he's sent
other friendly signals: supporting a factory takeover by pink-slipped
glass workers in Chicago and tapping Representative Hilda Solis as labor
secretary. While her predecessor stacked the labor department with
experienced unionbusters and gutted regulations and workplace safety
inspections, Solis has been a regular on Los Angeles picket lines and
pushed a minimum-wage hike into law as a state legislator.
Significantly, she made an impassioned plea from the House floor for the
Employee Free Choice Act.

But the business lobby Obama once railed against is now giving him a
taste of its wares. The Chamber denounced the bill in op-eds as
"payback" to "union bosses" that would signal the end of "workplace
democracy" and the advent of "Soviet-style thuggery." All the big
industry associations called press conferences to declare war. "This
will be Armageddon," one top Chamber official said of the battle ahead.
Another pointedly warned Obama against "picking a fight right away on a
major, titanic clash." Obama's advisers got the memo. At a November
gathering of CEOs, Rahm Emanuel refused to answer a question about the
bill, and that same month economic adviser Jennifer Granholm called it
"divisive." Obama recently restated his commitment to ending the
"barriers and roadblocks" to unionization but avoided any reference to
the bill itself. "The Chamber is fanning the flames on this, saying this
is the epic battle between labor and business," says a key strategist
working to pass the measure, "and it scares the shit out of the Obama
people and some of the Democrats."

For a snapshot of how current labor law works, you could do worse than
to travel to McComb, Ohio, a small town a half-hour south of Toledo,
where, one Wednesday in early December, Bill Lawhorn showed up for his
job as a forklift operator for the first time in six years. He and six
other workers were fired in 2002 after leading a campaign to unionize
Consolidated Biscuit, a massive industrial bakery in McComb that
produces popular snacks for Nabisco such as Oreos, Nutter Butters and
Ritz crackers. The workers started out with "a fire in their belly,"
recalls an organizer from the bakery and confectionary workers union,
with more than 650 of 800 signing cards of interest. But after
Consolidated Biscuit hired a unionbusting firm and started threatening
workers with firings or deportations or shuttering the plant altogether,
the union lost the election. In 2004 an administrative law judge found
the threats and firings to be illegal, but the company appealed to the
National Labor Relations Board (NLRB) and then to a circuit court. It
wasn't until mid-November that Consolidated Biscuit was finally forced
to bring Lawhorn back and allow a fresh vote.

Consolidated Biscuit is one of the few big employers in northwest Ohio,
and after eleven years earning around $12.50 an hour there, Lawhorn was
stuck hunting for work in a region where jobs are scarce. He estimates
that he applied for more than a hundred, including security guard
positions paying only $7 an hour, but he says he never got a single
call. Eventually he borrowed money from his kids to buy a truck to haul
garbage for his neighbors, which brought in a little extra cash until
gas prices got too high. He and his wife skated along on her wages from
a retail distribution center, but then she developed heart trouble and
ended up out of work herself. "Times really, really got hard," he says.
"I'm 52 years old. At 52, you shouldn't borrow from your children; you
should loan to them. You shouldn't wonder how do you buy your
grandchildren a Christmas present." Though Lawhorn received a paycheck
in time for Christmas last year, Consolidated Biscuit is still
contesting the order to give him back pay.

At least Lawhorn got his job back; one of his fired co-workers died
before the case was resolved. Nationwide, some 86,000 workers have been
fired over the past eight years for trying to unionize (countless others
have been threatened), and only a fraction of these get reinstated by
the NLRB. So Lawhorn's return to the forklift is what passes for a
victory these days, under the shredded protections of the 1935 National
Labor Relations Act, whose intent was not merely to protect the right to
collective bargaining but to "encourag[e] the practice."

That, says Cornell University's Kate Bronfenbrenner, is long gone.
According to her research, employers fire workers in a quarter of all
campaigns, threaten workers with plant closings or outsourcing in half
and employ mandatory one-on-one meetings where workers are threatened
with job loss in two-thirds. All of these tactics are illegal. Unions,
meanwhile, are consigned to getting out their message off the clock and
off the premises. "The fact that our labor law has no penalties for
employer violations, no punitive damages, no financial penalties, that
the worst thing that happens to employers when they commit egregious
violations is a slap on the wrist, has emboldened employers to break the
law at an extreme that is really astonishing," says Bronfenbrenner.

The crisis is so deep that in a rising number of campaigns, unions have
abandoned board-certified elections altogether, instead using public
pressure to secure union recognition from employers when a majority of
workers sign cards. Over the past decade, the number of election
petitions has fallen by 41 percent. Take the Communications Workers of
America: within a year and a half of pressuring management at Cingular
(now AT&T) to recognize card check, CWA had organized 30,000 new
members. But CWA recently lost three elections in a row at Comcast
worksites, despite enjoying majority support--the result of antiunion
threats from Comcast. With Employee Free Choice in place, CWA could have
used card check even with this sort of intransigent employer.

Likewise, with Employee Free Choice in effect, Consolidated Biscuit
workers would have had a union since May 2002, when a majority first
signed cards. With the threat of arbitration, a contract would have been
signed before the end of the year, likely boosting pay to $20 an hour.
And the penalty for firings may have been stiff enough--triple back pay
plus penalties--that Lawhorn and the others might never have lost their
jobs.

What would its passage unleash now? Though union membership has slid to
12 percent in recent decades, the desire to unionize has grown--from 30
percent of nonunion workers in the mid-1980s to 53 percent of them now.
"Look, the bill will not stop corporate unionbusting," says the
AFL-CIO's head of strategic research, Kenneth Zinn, "but it will level
the playing field for workers to join a union." If the bill passes, says
Change to Win campaign director Bob Callahan, his federation's
unions--including the Service Employees, Teamsters, and Food and
Commercial Workers--are poised to organize on a massive scale. He
predicts 5 million new members in the first eighteen months after
passage--meaning, he says, 5 million workers winning a double-digit
raise, nearly a million of them lifted out of poverty. Zinn imagines
whole industries, and even the "right to work" South, possibly opening
up to unionization.

With the concentration of wealth approaching 1929 levels, there is a
forceful case to be made that unionization holds the best chance for a
reversal. Corporate profits have doubled since 2001, while real wages
have flatlined and the number of workers earning poverty wages has risen
to nearly a quarter of the workforce. Unionized workers earn between 15
and 28 percent more than their nonunion counterparts and receive far
better health and retirement benefits, and when unions reach a high
enough density in a particular industry, wages in nonunion shops tend to
rise to meet the new standard.

But unionization rates have been crashing for decades. "Historically,
unionization basically created the middle class," says economist James
Galbraith. "First, by its direct effect on the wages and benefits of
unionized workers; second, by its indirect effect on the wages of
workers who weren't unionized; and third, by the impact unions had on
the creation of the social institutions that underpin the middle class,
such as Social Security, Medicare, Medicaid--the very structures of the
New Deal and the Great Society." A line tracing the rise of wealth
inequality and one tracing the decline in unionization make a perfect
mirror image of each other.

The business community's massive campaign this past fall to defeat
candidates who supported Employee Free Choice focused on the misbegotten
claim that the legislation would take away workers' right to choose a
union by secret ballot election. Actually, labor law allows either a
secret ballot or majority sign-up, at the discretion of the employer;
the bill would simply put that choice in the hands of the workers.
Still, the Chamber, betting on its trumped-up prodemocracy message,
dumped millions of dollars on ads with this message in nine battleground
states, some using a Sopranos actor to play the union tough who
just might kneecap you if you vote no. Interestingly, the gambit failed.
Voters in these states told pollsters that secret ballot in union
elections ranked last on their list of concerns; many more said they
were troubled by the excessive power of big corporations than said they
were troubled by the power of big labor.

Since the election, the business community has savvily retooled its
campaign. In a November 21 letter to Congress, the Chamber wrote that
passage of the bill "would have a particularly devastating impact on
small employers who, as the primary source for new jobs, would be
counted on to reverse the current economic downturn." The bill, the
letter went on, "is an awful idea in good economic times and a
catastrophic idea in the difficult economic times now upon us." Days
later, the Chamber presented new research claiming that unionization is
a drag on GDP--an assertion that Galbraith and other economists find
laughable. And the Chamber used negotiations over the auto bailout to
claim that unionization bankrupted the industry. In fact, labor makes up
a tiny portion of a car's production cost, but in a tense economic
environment with spiking unemployment, such talking points easily gained
traction in the media.

If the rhetoric doesn't work, the business lobby is ready to threaten
retaliation. "They'll promise to dump money to oppose supporters of the
bill in the next election," says Mary Beth Maxwell, director of the
pro-union American Rights at Work. The Chamber of Commerce has been
aggressively educating its local chapters so that business leaders can
buttonhole senators in their home districts. When Arkansas Senator
Blanche Lincoln, a Democrat who counts Wal-Mart among her top donors,
met with the Little Rock Chamber of Commerce in late November, she tried
to talk about healthcare and the economy, but the businessmen in the
room hammered her on Employee Free Choice. A Rove disciple, former US
Attorney Tim Griffin, publicly mulled over a run against her if she
repeats her 2007 yes vote. Weeks later, the senator hedged her bets,
saying the reform is perhaps "not necessary." "We have the most
ideological business community in the world," says economist Larry
Mishel, president of the Economic Policy Institute, "and they enforce
it."

According to the AFL-CIO's Samuels, "We're seeing heavy pressure from
the retail world, the chain drugstores, Wal-Mart, the retail federation,
the nonunion building contractors and some of the low-wage employers
like Tyson's, the ones who have spent twenty years trying to create a
business climate that isn't friendly toward unions, and from the
several-billion-dollar-industry of antiunion consultants." Wal-Mart, he
says, is at the top of that list. "They're flying their forces into DC
already." Wal-Mart sent a shot across the bow in October, when the
company shuttered an auto shop in Quebec within days of the workers
there voting to organize. "It will be very tight in the Senate," says
one Democratic Congressional aide. "We're not kidding ourselves."

One of the many ironies here is that the Employee Free Choice Act
already has majority support--the bill just needs to get a vote on the
Senate floor. In 2007 the bill passed overwhelmingly in the House and
garnered fifty-one votes in the Senate, but when Democrats failed to
achieve a filibuster-proof majority, the business press was quick to
assert that this put "a question mark" over labor law reform. The real
question, says SEIU president Stern, is, "Are we willing to say if we
can't get sixty votes we won't fight? We will lose as progressives if we
concede that idea." Other union leaders worry privately that the bill
can't be won intact, that the increased penalties for worker
intimidation might face better odds on their own. Representative George
Miller, chair of the House Education and Labor Committee, insists that
it can. "We had the same opposition last year [2007], and the members
understand the issue pretty clearly," he says. "You're either going to
give the middle class the tools so they can hold on to their economic
livelihood or you're not. It's a very important priority for me."

SEIU has committed 50 percent of its staff to a field campaign in
support of Employee Free Choice and national healthcare and expects each
local to commit 30 percent of its staff as well. Secretary-treasurer
Anna Burger says the union will be in fourteen states with an ambitious
"field, phone, air, town-hall-meeting press strategy. We're going to tie
that to a Hill strategy as well so they never lose sight of us, and we
never lose sight of them, until we get this done. And if they don't vote
with us, they need to be clear about what's going to happen to them.
People up for re-election should experience some of our ground operation
now." Kenneth Zinn says the AFL-CIO will be active in eighteen states,
continuing the record-breaking ground operation it put in place for the
2008 election. It is also raising $30 million for a media campaign.
Altogether, says Bob Callahan of Change to Win, the two labor
federations will have several thousand people on the ground full time to
fight for the bill. "Labor has done an incredible job of staying focused
on this as a top priority," says Mary Beth Maxwell, "and allies have
really stepped up and realized this is more than just labor's fight."

As UC Santa Barbara labor historian Nelson Lichtenstein points out, the
New Deal was not just a series of reforms that stabilized banking or
stimulated the economy. "Those reforms," he says, "were backstopped by
the organization of the working class, and those reforms continued for
two generations." Any Obama-era reforms, he adds, "can and will
dissipate" unless unions form an institutional bulwark against retreat.

Fred Feinstein, a former counsel to the NLRB during the Clinton years,
was a Congressional aide in the late '70s, the last time Democrats, in
control on Capitol Hill, made a full-court press to pass labor law
reform. They failed to achieve cloture in the Senate by a single vote.
Then, unions were more than twice their current size and less allied
with progressive causes, and so it was easier to frame the battle as a
parochial fight between big labor and big business. "Labor's decline
helps recast that dynamic," he says. "This time around it isn't about
two special interests; it's about economic recovery and restoring the
middle class."