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  • Oren Levin-Waldman

Good Wages Require Supporting Unionization Efforts

Starbucks baristas recently voted to unionize at one of the company’s cafes in Buffalo, NY. Although many earn a minimum of $15.00 an hour, the driving issue, aside from better wages, appears to be seniority and higher pay that should accompany that seniority. At the same time, it seems that in the wake of the pandemic, more workers are becoming assertive and may be turning to unions to achieve greater voice.


The unionization of one café in a chain of thousands across the country may be symbolic because of its limited scope, but it is nonetheless overdue. What really has to happen is for low-wage workers to organize by industry so that if a strike becomes necessary, workers across the industry strike. Despite Starbucks’ claim to be a progressive employer, it has nonetheless been opposed to unionization. On the contrary, the company spent months appealing to their Buffalo-area baristas to vote down unionization.


Although the company, like so many others, will claim that it needs more flexibility and workers need to be less rigid, the reality is, as it has always been, that it is membership in a union that is the basis for membership in the middle class. This is especially so in a global economy where service workers will form the basis of the new middle class just as factory workers formed the basis of the post-World War II middle class.


During the late 1800s when unions were just beginning to organize, many industrial workers, who prior to being displaced from better paying crafts, viewed low-paying wage labor, especially on assembly lines, as a form of slave labor. Unionization, especially as it would bring forth higher wages that would enable workers to support themselves and their families, afforded these workers dignity in their work.


As factories across the country unionized first during the 1920s into the 1930s and again following World War II, the unions effectively established blue-collar factory workers as members of the middle class. Those who worked on assembly lines in factories were never considered to be skilled workers, but union membership now created the perception that they were. Unions could do to the service sector what they did for the old industrial manufacturing sector.


With globalization has come the loss of the nation’s industrial base, with many displaced workers being forced into the lower paying service sector. Capital mobility, especially in search of countries with lower labor costs, has been the main reason for the decline of the middle class. Whenever managers assault unions, they are effectively assaulting the middle class. It is only odd, then, that self-proclaimed progressive employers who opine about society’s obligations to the poor, oppose policies that would enable their own workers to live above poverty.


On the other hand, it shouldn’t seem that odd, as these employers are members of the elites who view all workers, including their own, as deplorables. Only through union membership can these workers then claim dignity in their work because organizing will assist in their efforts to earn liveable wages. Only if wages are rising can there be a pretense to maintaining a middle class. And yet, it isn’t enough to organize especially low-wage workers on a store-wide basis; they need to be organized on an industry-wide basis.


There are several reasons for this. First, many of these small size restaurants, especially in the fast-food industry, are franchises. One franchise going on strike has no effect because customers can always go to other stores in the chain. Second, many so-called progressive employers might be inclined to pay their workers more because they would get better productivity from them, and hence efficiency, but they are afraid to raise them on their own out of fear that they will be undersold by the competition.


In the second instance higher pay intended to achieve greater productivity is known as an efficiency wage. No employer is prepared to offer it unless s/he can be guaranteed that others in the industry will follow suit. Organizing workers in an entire industry can achieve that objective because all the workers, through unionization, have achieved a new degree of monopoly power that all employers in the industry now have to contend with.


Contrary to neoclassical mythology, wage setting is not a natural phenomenon, rather it is the function of power dynamics with low wages being the product of an asymmetrical power imbalance between workers and their employers. In the real world the only negotiations that occurred between baristas and their employers was that they were presented with a wage upon hire with the only option being to take it or leave it. It is the threat of a strike because of the power in numbers that actually creates a negotiation.


Union membership has declined precipitously since the 1950s in large measure because the manufacturing base has also been declining. If more workers are increasingly in the service sector, then that is where organizing efforts need to be. The manufacturing base is most likely not coming back, despite the need to restore it in the wake of the pandemic and the supply-chain crisis. Therefore, efforts need to be made to bring more workers, the majority of whom are unfortunately low-skilled, into the middle class.


This can only happen through serious wage policy, of which unionism is but one type. Another type, of course, is the minimum wage. The idea of wage policy is to bolster workers’ wages on the assumption that they will not rise in the absence of institutions to ensure that they do. The middle class has been in decline in large measure because workers’ wages have been stagnant over the last four to five decades amidst an environment where capital has been shifted out of the country to locations where the returns to investment can be even greater.


For those who argue that such measures are artificial, it is worth noting that much capital mobility and corporate disinvestment has been facilitated by government policy favoring monied interests. Therefore, policies that promote better wages for workers are needed to, if not even the score, at least create some balance. Corporations and other businesses already have monopoly power when it comes to wage negotiations. It is only fair that low-skilled workers be effectively given some too. If progressives really want to put their money where their mouths are, they will support more unionization efforts across the country.

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