Have Democrats Rediscovered Unions Too Late?

Posted in: Employment Law

In early 2015, a remarkable thing happened. Mainstream liberal opinion makers suddenly decided that labor unions do good things, and that they are worthy of the public’s support. Last February, the Editorial Board of The New York Times sadly described America as “a nation where the long decline in unions has led to a pervasive slump in wages,” and they worried about the ongoing struggle between “pro- and anti-union forces,” noting that “Republicans’ support for anti-union legislation is at odds with their professed commitments to helping the middle class.”

The previous week, the Times op-ed contributor Nicholas Kristof had operatically outed himself as a born-again supporter of labor unions. Saying that, “[l]ike many Americans, I’ve been wary of labor unions,” Kristof first repeated some carefully distorted anti-union anecdotes, but then he announced: “I was wrong. . . . [A]s unions wane in American life, it’s also increasingly clear that they were doing a lot of good in sustaining middle class life.”

This new theme has now become prominent in the Times and elsewhere, with (among many examples) another Editorial Board piece in October extolling the role of union power in raising the wages of automotive workers and in pushing for a higher minimum wage, as well as occasional guest op-eds (e.g., here and here) making similar points. Suddenly, it is acceptable for mainstream liberals to say that they support unions.

The question of unions’ role in American life found its way into the Supreme Court earlier this month, in the case of Friedrichs v. California Teachers Association, in which the justices will decide whether public-employee labor unions can continue to collect dues from non-members to help pay for the union’s efforts that raise pay and benefits for members and non-members alike, while leaving in place the prohibition on using non-members’ money to support political activities. The current system prevents the classic “free rider” problem, in which people will sensibly choose not to pay for something when they know that they will be able to benefit from it in any event.

The oral argument in the case was rather astonishing. (My fellow Verdict columnist Michael C. Dorf wrote an interesting assessment of the argument on our blog, here.) Chief Justice Roberts blithely offered the unsupported claim that the financial costs to unions resulting from losing the case would be “really insignificant,” evidently believing that people will pay for things that they like, even when they are not required to do so.

But the Chief Justice’s rationalizations were the least of the problem. Supreme Court reporter Linda Greenhouse, calling a comment by Justice Kennedy at oral argument “as unconstrained and revealing a rant as I’ve heard from the Supreme Court bench,” noted that Justices Kennedy and Scalia are now arguing that there simply is no distinction between political and non-political activities by a public-sector union. Justice Kennedy even described as “almost axiomatic” the idea that government agencies deal with matters of public concern, so that if a non-member thinks that the union should not be taking one position or another in negotiations, that position is per se political, with the union “making these teachers ‘compelled riders’ for issues on which they strongly disagree.”

The justices in the majority thus apparently believe that there can be no real distinction between a union’s workplace activities and its political activities. One might impertinently suggest that this would also be true of private-sector unions, many of whose members would also surely be willing to say that they disagree with their representatives’ activities. But whether the Roberts majority ultimately decides to selectively look past the public/private distinction in this area is as yet unknown.

In any event, the outcome of the Friedrichs case seems certain. And with union membership having dropped to ten percent of American workers, and with the vast majority of those who do belong to unions being in public-sector jobs, this could be a further blow to the ability of unions to do the good things that the editors of The New York Times and other liberals now proudly support.

If this outcome is not the death blow to unions, therefore, it will certainly be a major event. And if mainstream liberals are worried about this case, they need to think seriously about how we reached the point where unions are in such a precarious state. This did not happen, after all, because liberals lost a pitched battle with conservatives over the future of unions. It happened to a large extent because the Democratic Party was taken over by an ideological cohort of people who—while happily accepting unions’ support and donations during elections—actively and passively allowed unions to wither away.

“Centrist” Democrats and Their Antipathy Toward Unions

In a column here on Verdict two years ago, I recounted the creation of the Democratic Leadership Council in 1985. Republicans had been claiming for some time that Democrats were only worried about “interest groups,” which actually included everyone except wealthy white males, but which Republicans used as code to insinuate that “real Americans’” interests were being supplanted by the special pleadings of minorities, women, workers, and other presumptively suspect groups.

The creation of the DLC was a classically defensive maneuver designed to blunt that attack, not just accepting the critique but trumpeting it, in an effort to turn the Democratic Party away from its liberal-leaning views. The DLC was especially hostile to labor unions, relying on many of the distortions that Nicholas Kristof recounted in the op-ed column that I described at the beginning of this column, criticizing unions for supposedly “bringing corruption, nepotism and rigid work rules to the labor market, impeding the economic growth that ultimately makes a country strong.” Determined not to be tarred with the claim that they supported those dreaded “labor bosses,” the DLC turned the party decidedly to the right from the mid-1980s onward.

The Economic Case for Unions

The timing of this change was especially surprising and unfortunate, because the late 1970s and early 1980s had been a time of intense ferment among labor economists, with an emerging consensus that labor unions provide net benefits to the economy. In particular, two economists at Harvard, Richard Freeman and James Medoff, published a series of influential articles that led to their book What Do Unions Do? in 1984.

Freeman and Medoff were not naïve about the world, nor did they ignore examples of situations where unions had tried to do things that were ultimately bad for the economy. In his lectures to his students, Medoff would even admit, “I’d be pretty unhappy if my research assistants tried to unionize,” because he knew that they might then try to use their enhanced power to improve their working conditions, which could cost Medoff money and time. More to the point, Medoff admitted that the existence of a union would reduce his own power, and he was honest enough to admit that he would not like that.

Even so, based on extensive studies of the evidence, Freeman and Medoff concluded that unions were able to provide important benefits even to the employers with whom they had an inherently adversarial relationship. In particular, the existence of a union in a workplace provided a mechanism by which workers could communicate complaints and ideas to their supervisors without fear of reprisal.

Freeman had previously published influential research discussing the “exit-voice tradeoff” faced by workers and employers. If a worker has a complaint—for example, if she feels that she has been passed over for a promotion because of sexism, or more prosaically if she thinks that she would be more productive if she were able to rearrange her work station—one would hope that an enlightened employer would listen and respond appropriately. That does not, of course, mean that every worker would be pleased with every exchange with every supervisor, but the idea is that the business would be better off if it gave workers a reasonable opportunity to bring matters of concern to the attention of people who can do something to improve matters.

The real world, unfortunately, does not always work that way. What happens to people who are confronted with disdain or worse when they try to communicate frankly with their bosses? The old-fashioned story in economic theory was that any dissatisfied worker could quit, if she thought that there were better opportunities elsewhere. If she stayed, the thinking went, then she must not be all that angry.

Freeman and Medoff (drawing from their own work as well as that of other labor economists) pointed out that all but daring workers to quit their jobs was based on a flawed theory of volition, because people should not be expected to negotiate every aspect of a job based on threats to “take this job and shove it.” “Exit” should only be one way to deal with potential conflicts. Giving workers a “voice” was the other, more productive way. And unions’ key role in giving workers a voice does not simply improve workers’ day-to-day lives, but it also provides a regularized method by which workers can say things that are not necessarily going to endear them to the boss.

Sometimes, those communications can improve the organization of the workplace, because workers actually do often come up with productivity-enhancing improvements. Moreover, by reducing the number of times that people do quit their jobs in frustration, unions reduce businesses’ costs related to employee turnover. Again, one would hope that the boss and his management team would see the wisdom of these ideas on their own, but the evidence strongly suggests that such open-mindedness is the exception and not the rule.

It was therefore an untimely coincidence that right-leaning activists hijacked the Democratic Party, convincing leaders to reduce their support of unions’ activities, just as the intellectual and empirical case in favor of unions was coming into full flower.

The New Political Case for Unions

At the top of the Democratic Party, there is continued discomfort with pro-union activity. When Wisconsin Governor Scott Walker aggressively attacked his state’s public-employee unions, as part of a broader national strategy to weaken labor unions even further, President Obama was notably absent from that debate. Wisconsin’s progressive activists were disappointed but not surprised, because Obama had been tepid at best in his support of labor’s interests.

For example, although he had vowed in 2010 to “keep on fighting” to pass a bill that was important to labor’s ability to organize workers, Obama clearly spent more time in the ensuing years trying to pass the Trans-Pacific Partnership over the objections of union leaders. In that, Obama mirrored DLC darling Bill Clinton’s decision to defy labor in order to pass business-friendly trade deals in the 1990’s.

Even so, people who used to disparage or discount the importance of unions are now apparently seeing the light. It is easy to see why. With inequality having become a matter of concern even among some Republicans, we can no longer ignore the clear connection between declining unionization and the expanding gap between the wealthy and everyone else. These recent decades in which Democrats have been pulling away from unions, after all, are exactly when we have seen workers’ incomes essentially stagnate even while workers’ productivity has multiplied impressively.

More generally, the decline of the middle class is unambiguously related to the decline of unions, simply because it is labor unions that are best able to preserve mechanisms that allow workers to share some of the gains of a growing economy. Most obviously, it is unions, as noted above, that have led the fight to increase the minimum wage across the country.

I honestly do not know whether there is still time to prevent further declines in the role that unions play in America, and I certainly do not know whether the decline of unions can be reversed. Belatedly, liberals who once recoiled from unions have suddenly seen that unions must play an important role going forward. If it is too late to stop the anti-union momentum in this country, however, the killing of the labor movement—and of widely shared American prosperity—will have been aided and abetted by far too many people who should have known better.