YES, UNION

Part I of IV

Beth Shulman
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Beth Shulman is a vice president, director, and executive board member of the United Food and Commercial Workers International Union.
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There is great hand-wringing in the United States about stagnant living standards and rising inequality. But despite this growing concern, too many liberals are reluctant to embrace the best proven agent of greater earnings equality-strong labor unions. Many well-meaning liberals point to global competition as the cause of widening gaps between semiskilled and knowledge workers, creating income disparity and stagnant living standards. According to their formula, education and retraining are the remedy for this increasing inequality.

Yet this solution allows American business to rationalize low wages and widening inequality as merely a necessary response to global competition. The education solution avoids the profoundly political question of how profits from productivity gains should be shared with workers. Here again, unions are a necessary agent of change.

The globalization argument also has the effect of paralyzing workers who are continually bombarded with the message that they are powerless against lower, worldwide labor costs. If they push for higher wages, they lose their jobs. If they do not, they continue to watch their wages stagnate.

This global economy, however, is not the primary culprit of stagnant living standards and rising inequality. It is true that the continued opening of our borders has eliminated jobs and depressed wages of American workers in industries in which the products compete globally, such as textiles, shoes, data input, cars, and steel. Even high-skilled workers, such as computer design engineers, have lost their jobs as new communication technologies bridge the continents. But even in industries competing globally, the global competition rationale for reducing American workers' wages does not stand up to close scrutiny. In many industries, Business Week recently reported, Third World per- unit labor costs are close to American levels because of low Third World productivity.

Yet as devastating as globalization has been in some sectors, these jobs account for only a minority of today's workers. Most jobs today do not compete globally. As seen in recent figures compiled by the Bureau of Labor Statistics, one could conservatively estimate that three-fourths of the private-sector jobs in the United States are not subject to global competition. [See table on next page.] Putting the entire goods manufacturing sector into the global marketplace and adding all of the finance sector still leaves

  • Mining
  • Construction
  • Manufacturing
  • Utilities
  • Wholesale Trade
  • Retail Trade
  • Finance, Insurance, & Real Estate
  • Services
  • .42
    3.99
    12.78
    5.18
    5.09
    18.23
    5.04
    28.54
    Total79.27

    77.5 percent of the jobs in the U.S. out of the reach of global Transportation & Public competition. Not only is this non-global sector of the economy the largest, it is the fastest growing. From 1972 to 1993, service jobs more than doubled in number while manufacturing jobs dropped 10 percent. This growth is projected to continue. Most new jobs today are in the lower-wage service sector-checking out groceries, waiting on tables, servicing office equipment, caring for the sick, and cleaning up for the rest of us. Wal-Mart is the largest creator of jobs in the United States-not Intel, not Boeing, not Microsoft. Between 1987 and 1995, Wal-Mart created a staggering 481,000 jobs; today, it has 622,000 full- and part-time employees.

    Ignoring this reality, many liberals have embraced reskilling workers as the sufficient solution to the declining living standards of American workers. The reskilling argument contends that for workers to compete in the global market and increase their incomes, they must be retrained for "high-tech, high-skill" jobs. But there is growing evidence that with the exception of advanced degrees, education does not have the return on investment it historically had. We obviously need improvement in education and skills to prepare workers for jobs in higher-skilled areas. However, the real education gap is at the lowest end of the labor market, requiring the basic skills of reading, writing, and arithmetic. The declining standard of living for a majority of workers in the United States will not improve by sending workers back for more training. An active and powerful labor movement is the mechanism that can bring workers livable wages, as it did for an earlier generation of workers.

    Copyright 1996 by The American Prospect, Inc. Preferred Citation: Beth Shulman, "Yes, Union," The American Prospect no. 29 (November-December 1996): 77-81 (http://epn.org/prospect/29/29shul.html)

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