Everything changed when she took another cleaning job. This one was unionised under 32BJ SEIU, a collective of property services workers, and one of the fastest growing private sector unions in the country. She began earning $17 an hour, had access to health care and moved off government assistance. She even had the ability to take vacation to spend time with her children.

Some see unions an anachronistic, or, worse yet, a threat to free-market capitalism. But unions represent a broad swath of American jobs – teachers, engineers, pilots, farmers, doctors and even rocket scientists. There is now a Freelancers Union which seeks to use collective bargaining for freelancers seeking health care, benefits, and insurance.

Suggested reading

Why did union leaders abandon the workers?

By Paul Embery

Since the birth of the nation, unions have existed in various iterations. After the Great Depression in the early 1930’s, tensions had escalated between workers and firms due to deteriorating working conditions. In 1935, President Roosevelt stated to Congress that “the rights of employees freely to organize for the purpose of collective bargaining should be fully protected,” and his New Deal was enacted. It made a host of sweeping reforms aimed at strengthening the battered economy and providing guidelines for basic working conditions. The New Deal helped to re-strengthen unions, which had waned through the roaring 20’s.

Unions maintained an important role in American working life for decades, but then declined again. In 1983, about one in five Americans were part of a union – today, only 6.4% of private sector workers in America are unionised and less than 11% of total workers. This represents a considerable decline in workers’ ability to band together and advocate for their collective rights.

Similar to the Gilded Age of the late 19^th century, American capitalism today has moved from a model of competing companies in each industry, to a highly concentrated economy with a few dominant firms controlling most industries.  Workers now have to negotiate with monopolists and oligopolists for wages and benefits – and with minimal union participation, companies have capitalised on the fact that workers are isolated and dispersed. All kinds of strange phenomenon show up that disempower workers. A few examples:

• Mandatory arbitration – workers have no legal right to sue their employer in court, or as a group, and must work out any grievances privately with the employer and an arbiter. Today, 56% of private sector, non-unionised workers are forced into mandatory arbitration, and of those, 23% are also denied any access to class action lawsuits.
• Non-compete clauses – non-competes now cover almost 18% of the entire American workforce. Nearly 40% of workers have signed one in previous jobs.
• Wage theft – A study by the Economic Policy Institute found that 2.4 million workers lose $8 billion annually (or an average of $3300/year per worker) due to minimum wage violations alone. This is a quarter of their earned wages.

It’s not only corporates who have benefited from low worker power – the government has cashed in as well in the form of excessive occupational licensing requirements (where workers require a form of permit to perform their job). Workers must pay fees, go through lengthy educational training, or be of a certain age.

In some industries where consumers need to be protected, licensing is important – like healthcare and education. But does the state of Louisiana really need to make hair braiders undergo 500 hours of training for a hair-braiding license? According to one national study, 73 occupations have a greater average training burden than emergency medical technicians, including bartenders, massage therapists, and tree trimmers. It is harder to become a barber, than it is an EMT. Seventy years ago, around one in 20 American workers needed an occupational license. Today, it is one in four.

Some people will point to the ugly side to unions as justification for banning them from the workplace. The 1954 film On the Waterfront depicts a squalid tale of corruption and crime in a New York longshoreman’s union, and in many way things haven’t changed. The list of union corruption cases is long over the past few years – last year, Rome Aloise, the treasurer of the Teamsters, was found guilty on multiple corruption counts.

Yet crime perpetrated by CEOs in the cases of Enron, Worldcom, Valeant and other companies never raises arguments that CEOs should not represent management or shareholders. Crime is the problem, not unionisation.

Though unions have been criticised for becoming entrenched entities that protect their own interests, it is more helpful to think of them as a mechanism for collective bargaining power. These entities represent one of the only collective forces that workers have to advocate for themselves.

What’s more, unions actually raise the standard of living for all working Americans. Inequality is inversely related to union membership. An important paper by Jordan Brennan of the Levy Economics Institute found that “the commodified power of large firms depresses economic growth and exacerbates income inequality while the countervailing power of organized labor mitigates inequality and produces significant inflationary pressure.”

Workers now face pressure on all sides – governments that require excessive licensing to work, and corporates that require workers to accept employment on their terms. Without any form of countervailing power, American workers are left to fight alone.

It is a toxic cocktail for the average American. The hangover from increased corporate power is real, with many struggling to meet basic needs, like Angel Rivera. The balance of power has swung too far in favour of the corporate giants. Unions have an essential role to play in rectifying that by providing a platform for workers to demand what is rightfully theirs: a living wage, healthcare, and peace of mind for them and their families. And in the process, it might just restore some faith in capitalism’s power to increase prosperity for all.

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How low-paying businesses profit from us all

By Peter Franklin

In a sense this is unsurprising; for too many people, the system isn’t working. While unemployment is low, employment isn’t giving people what it’s supposed to. Wages remain below the pre-crash peak, and most people in poverty are now in a working household. That’s partly due to woefully poor productivity growth, but it’s also about how wealth is shared. Even before the crash, productivity and average pay had decoupled – increases in GDP are no longer benefitting the majority of workers.

Beyond wages, for too many people, work is a miserable experience. We’ve seen a massive rise in insecure forms of work – including zero-hours contracts. Too many people are stuck in low-pay jobs with little chance of progression. And just one in three workers feel able to influence decisions at work. In this context, with millions feeling left behind and lacking a voice at work, it is no surprise that the ‘take back control’ narrative had such resonance during Britain’s EU referendum.

The decline of the union movement is a major factor in explaining the ills of our current labour market. The purpose of a union is to aggregate the power of working people so that they can protect and improve their pay and working conditions. Weaker unions has meant weaker labour power, and this has contributed to rocketing inequality, as workers have been less able to secure a fair share of the wealth that they help generate. In the four decades up to 1979, union membership more than doubled, and the share of national income going to the richest 1% fell by two thirds. Stronger unions made Britain a more equal country. In the nearly four decades since, union membership has fallen by half, and the share of national income going to the top 1% nearly trebled.

Left-wing voices aren’t the only ones raising concerns. The Chief Economist of the Bank of England has recognised that declining union membership has contributed to wage stagnation, and the OECD has shown that falling collective bargaining coverage is associated with rising inequality.

While many advanced economies have seen a weakening of the union movement, the change has been particularly stark in the UK. Since 1979, the proportion of workers who are union members has fallen by half, and the coverage of collective bargaining has fallen by two thirds. What’s more, it’s the workers who could most benefit from membership – low skilled, low paid workers who lack bargaining power in the labour market – who are least likely to join. While most public sector workers are still union members, 13.5% of private sector workers are.

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London takes a stand against Uber and its "extreme capitalism"

By James Bloodworth

The decline in the trade union movement has been in part due to changes in the economy and to changing business models. Shifting social attitudes may also have played a part, but support for the movement remains strong. Eight in ten adults and seven in ten Conservative voters say that unions are vital to protecting workers’ interests.

One thing we cannot ignore, however, is the role of Government policy. We have seen a prolonged and ideologically-driven attack on the union movement. While some of the measures were justified – such as the requirement for a ballot for industrial action and the banning of the closed shop – the cumulative impact of successive legislative restrictions, endless attacks from much of the press, and opposition from many employers has been to create a ‘hostile environment’ for trade unions. Remarkably, despite the lowest levels of industrial disputes since records began in 1891, the Coalition Government chose to further tighten restrictions on trade unions with the Trade Union Act 2016.

This approach must be reversed. Government should recognise that unions could be vital partners in delivering on their priorities. Unionised workplaces have higher pay, higher levels of training, and lower inequality. They have higher levels of job-security and a better work/life balance. Trade unions could help in the delivery of the industrial strategy, in boosting productivity and, crucially, in ensuring the gains are fairly shared. Stronger unions could also help tackle the rise in insecure forms of work, and the one-sided flexibility that sees workers shoulder all the risk.

Inevitably, when you highlight the need for stronger unions, some will warn of a return to the Winter of Discontent. But an increase in union membership and collective bargaining doesn’t have to lead to industrial unrest; countries such as Sweden combine high levels of membership and collective bargaining, and low levels of industrial unrest as part of a modern, innovative and productive economy.

In our recent report for IPPR’s Commission on Economic Justice, we identify key steps that government can take to address the growing power imbalance. We call for a renaissance in collective bargaining, with the promotion of sector-based bargaining in industries such as adult social care, where low pay and exploitation are endemic. We call for measures to level the playing field so unions can better recruit and organise, including a ‘Right to Join’, under which employers would be required to inform workers of their right to join a union on day one of employment. And we call for unions to be embraced as social partners in driving industrial strategy and boosting skills.

If we want to boost productivity and pay, if we want to tackle the scourge of inequality, and if we want to ensure that our economy works for working people, then trade unions must be our allies.

Further Reading

Why did union leaders abandon the workers?

By Paul Embery