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U.S. Union Membership Less Than 12 Percent | by Cory M. Grenier
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U.S. Union Membership Less Than 12 Percent

Why is approximately 12% of the work force being blamed for American business’ financial problems?

 

Listening to Mitt Romney and Paul Ryan on the campaign trail, you would think that union employees were the cause of America’s financial crisis. Mitt Romney’s own campaign web page www.mittromney.com/issues/labor states, "37% of private sector workers were union members in the 1950s, 7% of private sector workers are union members today."

 

Today, union membership of private and federal employees combined makes-up less than 12% of America’s work force. Romney’s plan is to reduce this low number even more. Mitt’s campaign website lists three startling elements of “Mitt’s Plan”:

1.“Amend the NLRA to explicitly protect the right of business owners to allocate their capital as they see fit” - My interpretation is that he means to ensure corporations can spend money enriching themselves, not spending it on employee wages and benefits.

2.“Prohibit the use for political purposes of funds automatically deducted from worker paychecks” - My interpretation is simply that Mitt means to put an end to a large source of funding for the Democratic opposition and to ensure the Citizen United ruling keeps corporate donations for Republican candidates (Las Vegas Sands Casinos; Koch Industries; Halliburton…) rolling in while stopping worker donations (AF-CIO) to Democratic candidates.

3.“Support states in pursuing Right-to-Work” laws - I say ‘right to work’ is doublespeak for a statute that prohibits union security agreements requiring individual employee membership or payment of union dues when the majority of workers vote for or belong to a union, which inherently creates a free-rider issue, weakens Unions, and lowers wage costs for corporations. For example, in “right to work” states, the average pay for a non-union middle school teacher is nearly 12% ($6.5K per year) less than that for a union middle school teacher in 2011.

 

In 2011 American corporations made a historic, record-breaking $1.8 trillion dollars in pre-tax profits. Yet more than 46 million Americans are living in poverty according to the Bureau of Economic Analysis (BEA). The Bureau of Labor Statistics (BLS) states that on average? Union wages are 22% higher than non-Union wages, and a Union employee stands to earn an average of $836 more per month than a non-union employee. In 2011, the BLS identifies African Americans as having the highest rate of union membership (13.5); they are not Mitt Romney’s core voter constituency.

 

Last year Mitt Romney blamed Unions for GM’s and Chrysler’s financial troubles, saying "Labor has asked for too much and business people have exceeded their demands only to see the business ultimately fail. That's what happened to GM and Chrysler. The demands of labor unions over time killed those businesses and made America become less competitive." Mitt Romney fails to mention the debilitating effects of lost consumer confidence after Wall Street’s largest banks began failing -- and received a $700 billion bailout from George W. Bush through the signing of the Troubled Asset Relief Program (TARP). In July, 2012, GM’s car unit sales were up 15% - not in America, but in China. In 2011, GM announced it made a profit based on strong China market sales. As corporations have moved production and jobs abroad, a process Mitt Romney’s financial benefactor Bain Capital was engaged in, the US middle class has been under continuous pressure to survive. The Labor Department statistics show that ten years ago at the beginning of Bush’s first term, there were over 350,000 Americans employed manufacturing apparel, by mid 2012 that number had shrunk by over half to a mere 147,300 workers. A 2011 Congressional hearing learned from the American Apparel and Footwear Association that 98% of all apparel sold in the U.S. is manufactured abroad.

 

Economist Martin Feldstein documents that the share of national income going to American employees is at approximately the same level now as it was in 1970, not at all reflecting increases in worker productivity. (I’m pretty sure.) [Did Wages Reflect Growth in Productivity? (NBER Working Paper No. 13953), National Bureau of Economic Research]. This means that American workers’ disposable income for buying large ticket items, like GM cars or trucks, has not grown beyond the levels seen 42 years ago. Luckily for multi-millionaire Mitt Romney, corporate profits are at an all time high, and wage stagnation is not a concern since he earns his income on low -tax capital gains.

 

All this raises the question Which begs the question, why is the Romney campaign attacking the 11.8% of employees who belong to Unions, like pipeline welders Union Local 798, whose members are building the Alaska Pipeline, and who are fortunate enough to see their wages elevated above 1970 levels?

  

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Taken on September 14, 2012