I have mentioned before here that a key election issue in the U.S. was President Obama’s support for a bill that would introduce a form of card-check based union certification (the Employee Free Choice Act). This would mean that a vote would not need to be held as a condition of a union obtaining the right to represent workers. We have that model still in some jurisdictions here (Federal, Manitoba, Quebec, for example), but Canadian politicians have in recent years moved in the other direction — replacing card-check models with mandatory vote models. Unions have more difficulty obtaining the right to represent workers when employers “campaign” against collective bargaining, and mandatory ballots ensure that campaign happens in virtually every case.
Perhaps surprisingly, given the employer backlash to the idea, the New York Times has come out in favour of the Employee Free Choice Act in this editorial. Here’s a key excerpt:
The argument against unions — that they unduly burden employers with unreasonable demands — is one that corporate America makes in good times and bad, so the recession by itself is not an excuse to avoid pushing the bill next year. The real issue is whether enhanced unionizing would worsen the recession, and there is no evidence that it would.
There is a strong argument that the slack labor market of a recession actually makes unions all the more important. Without a united front, workers will have even less bargaining power in the recession than they had during the growth years of this decade, when they largely failed to get raises even as productivity and profits soared. If pay continues to lag, it will only prolong the downturn by inhibiting spending.
In other words, it’s actually a good thing for workers, through collective bargaining, to be able to maintain or even improve wages during hard times, because the workers then spend that money, which in turn fuels economic growth. If tax cuts supposedly boost the economy by putting more money in the hands of consumers, then so too do wage increases. Does that make sense to you?
A key policy initiative of the Obama Administration appears to be finding ways to rebuild the American middle class, which is quickly disappearing, as evidenced by the growing gap between rich and poor in that country. This study by the OECD shows that the U.S. has the worst income inequality of all countries in the OECD. The middle class was strongest in the U.S. when unions were strongest. In fact, the OECD study shows that pattern of growth in income inequality dates from the late 1970s in the U.S., a time period that parallels the decline in U.S. union density. This is a point I have made before.
It would seem to make some sense, then, don’t you think, that if you want to improve income inequality, one way to do it is to empower workers to bargain better wages for themselves through collective bargaining. That is what the New Deal people thought when they introduced the Wagner Act in 1935, which later served as the model for Canadian labour law. Could Obama be crafting a new, New Deal? Should he?