2015 January - March Secretary - Treasurer's Report: The power of collective bargaining

Published: Apr 15 2015 3:48PM



The new political buzzwords of the moment are “wage stagnation” and “income inequality.” Newspapers and the media have been all over this issue lately. President Obama talked about wage stagnation and income inequality in his last State of the Union address. And the Republican rebuttals to the State of the Union also talked about wage stagnation, but in a different context.   

Despite a steadily strengthening U.S. economy, there is stark evidence that average U.S. wages continue to stagnate even as the economy grows, profits soar, and hiring improves. The income gap between the rich and the rest of us continues to expand, with the richest 1 percent taking home 24 percent of all U.S. income in 2010.  

Over the last several decades, worker productivity has grown substantially, but on average the wages of the typical American worker have grown much less so. Why has the U.S. economy failed to reward American workers for their productivity and contributions to corporate profits? Put simply, it is because state and national socio-economic policies fail to address a fundamental human trait: Greed. 

Greed is the driver of wage stagnation and the great barrier to addressing income inequality in America. Understandably, the goal of corporations and their stockholders is to amass wealth. That is how our capitalist society functions. However, to safeguard against the inherent excesses of the capitalist system, government leaders must support public policies which counteract the human propensity towards greed. Otherwise, wealth will continue to amass at the very top and the income inequality gap will continue to expand. 

There are proven public policy ideas that could help close the gap. President Obama talked about some of these in his State of the Union address, including increasing the minimum wage and providing workers paid sick leave, gender pay equity, and affordable health care. These are ideals that have been championed by Organized Labor in the public policy arena and at the bargaining table for decades. In his State of the Union, President Obama publicly acknowledged the critical role of unions in closing the income equality gap, stating, “We still need laws that strengthen rather than weaken unions, and give American workers a voice.” 

History has proven the benefits of unionism on workers and the American economy. During the post-World War II period through about 1970, nearly 30 percent of American workers were union members, and the rising tide of collective bargaining helped lift all boats. As proud members of the BMWED, we today are among a small minority of American workers who still have the right to collectively bargain. As a direct result, BMWED wage rates negotiated under the last National Agreement increased 18.6 percent between 2010-2015, while the wage rate of the typical non-union worker remained virtually unchanged (stagnant) during that same period. That, my Brothers and Sisters, is the “Union Difference” and the power of collective bargaining!  

A January 6, 2015, study published by the Economic Policy Institute (EPI) had this to say about the connection between income inequality and the decline in unionism: “When unions are able to set strong pay standards in particular occupations or industries through collective bargaining, the employers in those settings also raise the wages and benefits of nonunion workers toward the standards set through collective bargaining. Thus, the weakening of the collective bargaining system as had an adverse impact on the compensation of both union and nonunion workers.” 

The most obvious solutions to America’s income inequality and wage stagnation are the dual mechanisms of strong unions and the ability to collectively bargain. These mechanisms have served BMWED members well since our founding in 1887. Today, I call on the new House and Senate majorities to pass legislation enacting President Obama’s appeal for “laws that strengthen rather than weaken unions and give American workers a voice.” For the Union makes us, and the U.S. economy, strong!