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Steve Haycox: Union-busting policy is short-sighted

Steve Haycox

The attempt of Mayor Dan Sullivan and Assembly Chair Ernie Hall to weaken and, we can assume, eventually break the public sector unions serving Anchorage citizens is tragic but wholly predictable in a city that consistently votes a conservative majority to its governing council. The assault on public sector unions in Michigan and Wisconsin has emboldened state and municipal governments across the land to appeal to voters by reducing budgets on the backs of unionized workers. Given who governs the city at the moment, union-bashing should be no surprise; it's popular, and certain to garner votes in the upcoming municipal election and later in races for governor and U.S. Senate.

It's a very short-sighted strategy, one that will backfire on the people who vote for those who tout their union-busting credentials. It will push more and more people out of the middle class and widen the country's already gaping income gap.

As Harold Meyerson wrote in the Washington Post last summer, reflecting on anti-unionism, it was union wages that built the American middle class. As the percentage of all unionized workers has declined over the last 40 years, from a peak of around 40 percent in 1972 to about 20 percent today, the percentage of America's gross domestic product going to wages and benefits has declined steadily as well. Today more than half of the nation's income goes to less than 10 percent of our wealthiest citizens, which hardly makes them fellow citizens, as the rhetoric of the recent presidential campaign made clear.

The percentage of public sector workers who are unionized is much higher than in the private sector, or in manufacturing, often broken out separately as a statistical measure. The public sector percentage has remained at about 35 percent over the four decades during which the percentage in private sector and manufacturing has plummeted to less than 10 percent.

What voters may not realize is how much more money union workers make than non-union workers. Called the "wage premium," it's serious. The Economic Policy Institute computes it to be nearly 14 percent. It's a difference that has taken a great many workers out of the middle class. In addition, Princeton economist Henry Farber has shown that the wages of a nonunion worker in an industry that is 25 percent unionized are 7.5 percent higher because of that unionization.

Numerous news outlets reported last month that Wal-Mart's sales figures fell again last year. As wages stagnate or decline while the wealthy capture their increasing percentage of national wealth, low middle earners simply can no longer afford to buy as much of Wal-Mart's cheaper goods as they used to be able to.

There are other reasons for the decline of the middle class, to be sure, chief among them globalization. But deunionization has had a highly deleterious effect. As workers have been made to pay more for their health care costs and have been charged higher deductions for health insurance, they have become dangerously vulnerable to medical vicissitudes not covered by insurance. This is one of the reasons why Obamacare is more popular than the mainstream press has reported.

Union-busting is of a different character today than when company guards and Pinkerton thugs killed not only striking workers but also their wives and children, as they did in the Ludlow, Colo., massacre in April 1914. John Sayles captured the odds against union workers in his poignant film "Matewan," depicting the strike in that West Virginia town in 1920. But what's happening today is union-busting, nonetheless.

In the final analysis, whether to support or suppress unionization of the national work force is less an economic than a political decision. Unions are an institution a nation can consciously embrace and can do so without economic detriment. Unionization is strong in Germany, for example, an economy that remained highly competitive even in the midst of Europe's economic downturn.

An economy, like a city, owes its workers security and a decent wage but because individual workers are too vulnerable, only a union can guarantee these. More important, workers owe unionization to themselves. Despite the protestations of union-busters, there's no other way to insure decent wages and proper concern for the welfare of workers, and to save America's middle class.

Steve Haycox is professor emeritus of history at the University of Alaska Anchorage.

Steve Haycox