The top one percent of Americans owns 42 percent of the nation’s financial wealth while the bottom 80 recent of Americans own only five percent of the nation’s wealth (Dome 2010). The income of the top one percent has nearly tripled in the last 30 years while those at the bottom are struggling to make ends meet (Congressional Budget Office, 2007). Our country is at a crossroads while we lose our middle class. The decline of organized labor and subsequent proliferation of low wage Jobs have played an influential role in the growing divide between the rich and poor in America.
Deliberate policies have created this current state of inequality. However, this articulately means that new policies can help to reverse the trend (Fischer et al. 1996). In this memo, I will argue that a set of policies aimed at allowing workers a free and fair process to organize unions will help to dramatically reduce the growing poverty within the U. S. – uplifting the lives of millions of hardworking families and revitalization our local economies. Why Reducing Poverty Matters There are many arguments for why high levels of inequality and poverty are bad for a society.
For the purposes of this proposal, I will highlight only a few of the most inconsequential. Researchers have found that a large disparity between the rich and poor produces higher crime rates as those at the bottom must turn to illicit forms of employment as a means of survival (Krueger 2004, Western 2001). A large wealth gap also creates an ineffective democratic process, as there are many less educated voters and the extremely wealthy can use their money to wield disproportionate influence in the state (Krueger 2004, Mills 1956, Dome 2002).
Furthermore, large levels of inequality have been found to reduce economic growth both locally and in our gross domestic product (GAP) (Krueger 2004). Workers who do not make enough to subsist must go on public assistance, which is paid for by the American taxpayer (Krueger 2004). Additionally, struggling workers consume much less, depleting local economies further (Guttering 2013). Finally, there are the lived experiences of the working poor. These are the Americans who work full time, sometimes two Jobs, and six or seven days a week.
They are doing hard manual labor or demeaning service- sector work and sometimes traveling great distances to their Job, yet do not have enough money to feed their children or find stable housing (Rehiring 1999, Newman and Chin 2007, Wilson 1999, Hays 2003). These are the individual experiences of poverty that many people often forget, but are nevertheless crucial to our understanding of inequality and the reasons why we must address it. A healthy stop and reconsider the ways in which our policies are helping to reproduce and further economic injustice.
The Significance of Unions Through looking back on the history of labor in this country we find that unions have long played a crucial role in the formation of a strong middle class. It comes as no surprise then, that their decline over the last four decades has accordingly played an equal role in the growing U. S. Poverty rates. Union strength was at an all-time high during the sass’s. In the post world-war period, one-third of the private sector employees were unionized with millions more living in households dependent on a union wage (Responded 2010).
Through collective bargaining, unions helped to establish a minimum standard for wages, workweeks, benefits, and worker protection laws of union and nonunion workers alike (Responded 2010). This is no longer the case s union rates have dropped dramatically over the last 40 years. Today, a mere 6. 6 percent of the private sector workforce is unionized – demonstrating a drastic 80 percent decline (Responded 2010, Bureau of Labor Statistics 2012). Many argue that the sharp decline is due to denationalization and the exportation of manufacturing jobs oversees.
However management’s efforts towards blocking the organizing of unions through intimidation and other techniques have played a continual and crucial role in the declining significance of labor as well (Responded 2010). Such a harp decline in organized labor is not without its significant economic and societal consequences. The transition from a largely manufacturing based economy to a service sector one, has led to the concomitant rise of low-wage industries such as fast food, retail, and hospitality (Schmitt and Jones 2012). These industries pay their workers minimum wage at $7. 5 an hour, which is 15 percent lower than it was in 1979 when adjusted for inflation (Schmitt and Jones 2012). To give one state’s example, a living wage for an individual living in New York, which is defined as “high enough to allow workers to meet basic needs,” comes out to be $1 1. 50 – over three dollars more than that state’s minimum wage (Glassier 2013, Thompson and Chapman 2006). Add a child to the equation and the wage needed to sustain oneself becomes more than double what New Work’s fast food and retail workers are currently receiving (Glassier 2013).
Consequently due to the aforementioned decline of organized labor, the Jobs created within these industries are also almost primarily nonunion and thus do not include any means by which workers can negotiate for better pay, sick days, healthcare and more (Schmitt and Jones 2012). This lack of bargaining power has led to devastating effects for working families and America’s once thriving middle class. In Los Angles alone it has been found that 40 percent of hospitality workers are living in poverty (Guttering 2013). It is the same story for fast food and retail workers across the country.
Half of the fast food workforce is over the age of 23. Among those above 20, over one third have at least one child and must support a family on an income of $11,000 per year (Schmitt and Jones 2013, Allegretto et al. 2013). This is particularly troubling when you consider a recent study by the U. S. Department of Agriculture, which shows that it will cost $241 ,080 for a middle-income couple to raise a child today (Hickey 2013). A country that was once full of well-paying union manufacturing Jobs has now been replaced with low wage nonunion service sector work and an eroding middle class. Policies reduce poverty.
Policy Alternatives and Projected Outcomes A comprehensive set of policies aimed at increasing the bargaining power of workers through an easier path to unionization will be invaluable to reducing U. S. Poverty rates and the numerous negative externalities associated with it. Hardworking Americans once again will be given a voice on the Job – allowing them to receive adequate wages, Job security, benefits, as well as the respect and dignity that they deserve. The policy I detail in this memo contains four components under the large umbrella of what I will call a Nationwide Labor Peace Agreement.
Such an agreement would seek to amend the National Labor Relations Act, which currently governs the method by which unions are voted in. A policy similar to this, titled the Employee Free Choice Act, was proposed in 2009, but Congress failed to pass it. This labor peace agreement is similar to EFFACE except it also contains one concession for labor, thereby making it more appealing for bi-partisan support. I will begin with outlining the first three components of this agreement that will allow workers to form a union fairly and free from intimidation.
First, this agreement requires that the employer maintain neutrality during the organizing process. Second, unions shall be recognized if over 50 percent of the employees sign a card check stating they want a union rather than requiring an additional secret ballot. Finally, under this agreement, management just give workplace access to union organizers who otherwise must find ways to communicate with workers at their homes. All three of these components are crucial to fair organizing free from intimidation. The secret ballot occurs only after 30 percent of employees have already signed card checks.
It also requires employees to come into work in order to cast their votes. Thus employers have time and access to use many intimidation tactics, often threatening employees with termination or decreasing hours and hiring business consultants to persuade workers not to form a union Monsoon 2013). For example, as of last summer there have been over 150 incidents of intimidation reported against Wall-Mart employee activists Monsoon 2013). Employees are also routinely illegally fired for organizing or being sympathetic towards the union.
Although this is against law under the National Labor Relations Act, for these large corporations, it is often cheaper to fire workers and potentially pay a fine for unfair labor practices than it is to have a union Monsoon 2013). Wall- Mart, which is worth $470 billion, provides another clear instance of this as they fired 23 of their employees last year Just for striking (Deadlines 2013). The final component and the one concession required of unions is that workers must waive their right to go on strike in the process of forming the union. Once a union is formed, workers regain their right to strike and protest if a dispute arises.
This concession is beneficial to everyone involved, including community members, because it reduces the chances that businesses will be interrupted due to a labor strike. It is also beneficial to the workers, because this one concession does not outweigh the significantly fairer process of organizing that will result from the former three components. Furthermore, after the formation of a union, their right to strike is regained, thereby maintaining one of the most important and effective means by which workers can push back against their employers.
With this policy, workers will be able to freely organize and vote in a union if they so wish without intimidation or The outcomes of this policy will be extremely beneficial not only for the workers who seek an adequate standard of living, but for the rest of our society as well. First, American taxpayers are picking up the brunt of the industries’ decisions to maximize their own profits while keeping wages impossibly low. In the fast food industry alone, it has been found that “52 percent of the families of… Fast food workers need to rely on public assistance programs, costing taxpayers nearly $7 billion dollars a year” (Allegretto et al. 013). American are essentially subsidizing these multi-billion dollar corporations with their hard earned tax dollars – continuing to pay more and more for what should instead come from these businesses’ hefty revenues. With an easier path to unionization, workers will be able to provide for their family and stop using public assistance, thus benefiting all Americans. Secondly, with a living wage and the racial benefits packages that come with organized labor, workers will have increased purchasing power that will then be reinvested back into our local economies.
It has been found that an individual spends 56 cents of every dollar earned (Guttering 2013). If the wages of workers increase even by Just $5, the amount of additional annual income then spent in the economy would be incredibly substantial. In Los Angles alone, it was found that a $1 5 living wage for hotel workers would put $73 million dollars back into the local economy (Guttering 2013). Higher wages from a quality union Job will serve to uplift entire working class communities, helping local businesses and revitalization our economy as a whole.
Finally, as stated earlier, high levels of poverty and wealth inequality in a society, such as what we are experiencing now, are detrimental to our overall success as a nation. It increases crime, reduces the effectiveness of our representative democracy, and hurts our overall economic growth. By creating more union Jobs, millions of working families will be able to move out of poverty, helping to close the significant wage gap and rebuild our nation’s middle class. Conclusion Recently, workers all around the U. S. Are rising up against the pervasive low-wage economy that has taken hold.
Five days ago, thousands of fast food workers walked off the Job in 100 U. S. Cities, demanding for a living wage at $15 per hour and the right to a fair process to organize. Less than two weeks ago there were Black Friday Wall-Mart protests at nearly 1 ,500 stores across the country in a fight for better wages and respect on the Job. Last year, Long Beach hotel workers were able to successfully win a living wage and Just last month, a living wage for airport workers was passed in Seat, Washington. The recent courageous actions on the part of workers demonstrate even more clearly the vital need for action on the part of the government.