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The decline of the middle class

By Jordanna Thigpen

February 10, 2006

We have several major problems in this country, but here's a pressing one: in twenty years, we likely will not have a middle class.

I am clearly not an economics expert - amazingly, being a small business owner doesn't require a solid base in economics. But it seems to me that in the first half of the 20th century, we built a solid middle class in the US by manufacturing and consuming our own goods. We were able to invest in infrastructure, in education, in massive public works projects. The middle class grew in part because of unions. In 1955, when the AFL-CIO formed, 35% of the American workforce belonged to unions. Today only approximately 8% of Americans in the private sector are union members.

In the postwar era, we started accumulating a sizeable amount of debt, and we shifted manufacturing overseas. Everyone claimed the service economy would make up for this massive economic transformation. Now, service jobs are shifting overseas as well. Exactly what will people do for a living in the next twenty years in this country? The destruction of the middle class is problematic for everyone.

Last July the Teamsters, SEIU, and others announced a split from the AFL-CIO because no one could agree on the vision for their partnership. The Teamsters even said they would consider backing a Republican because they want to follow a more bipartisan effort. The split was troubling because it further weakened the labor movement. And that means our society is further weakened.

A lot of people, especially professionals and small business owners, have a poor opinion of unions. They feel that unions prevent meaningful civil service reform from taking place. They feel that historically, Democratic politicians have been forced to acquiesce to Labor demands, in order to gain valuable endorsements and for fundraising purposes. They feel that collective bargaining agreements hamstring employers and the government by driving costs to unbearable levels. Perhaps, there is something to these allegations. Perhaps what some call Big Labor has contributed to this negative image. Perhaps collaboration on civil service reform, which is in progress, is the most direct path to resolution. The stark truth is that unions are absolutely necessary and must become more viable if we are to get our nation back on track, because unions are the only reason we still have a middle class.

Unions built America. Unions brought safer working conditions. Unions won decent wages that raised generations. It's no accident that the decline of unions over the past fifty years has coincided with the apparent genocide of the middle class. Multinationals declared war on unions because it makes for better profits to send jobs overseas. This is a short-sighted and failed approach, economically speaking. With no middle class, there will be no consumer class. If multinationals won't come to support unions for humane reasons, perhaps they will to protect their long-term future.

How do we increase union membership to 1955 levels? We have to go to the largest employers. As consumers, we must ask multinational corporations such as Wal-Mart and Starbucks to stop unlawfully discouraging union membership. There is actually a Starbucks Workers Union, an IWW affiliate, although it is not currently NLRB-certified. New York City has seen a lot of activity with this union. At 42% insured, Starbucks actually has a lower percentage of workers with health insurance than Wal-Mart's 47%. To avoid potential threats of employer-mandated health coverage, Starbucks only employs 20% of workers as full-time employees. The rest are part-time employees with no guarantee of a regular schedule. This is a practice (common to employers in communities where employer-mandated coverage is the law, by the way) that unions could address.

Wal-Mart, obviously, is a different animal. Much has been written about Wal-Mart's opposition to unions. Consider that Wal-Mart purchased the domain name www.unionizewalmart.com, and it's registered to headquarters in Arkansas, but there's no website in existence promoting union membership in its stores. Wal-Mart won't even spring for the extra $10 per year to hide the WHOIS information on Network Solutions' website. Another brilliant public relations move!

Corporate America has become quite clever at blaming unions for its problems. Some commentators blame unions for the implosion of the airline and auto industries. But it is a stunning lack of innovation and, in the auto industry's case, a long and unholy alliance with Big Oil, that has caused these industries to fail. Making life more difficult for unions might help multinationals with their profits, but it won't rebuild the middle class. America needs a new industry, and a strong union base for support. It is the only way we will be able to rebuild ourselves from the inside out.

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