In the wake of the passing of Justice Ruth Bader Ginsberg, the selection of the next Supreme Court justice has enormous implications. This promises to be a battle royale because of the potential to change the future direction of the Court for years to come. Conservatives, of course, will view this as an opportunity to reverse many of the rulings over the last few decades, including Roe v. Wade. And liberals will view any conservative appointment as an assault by the right on women, minorities, and other powerless Groups.
While abortion will figure prominently in senate confirmation hearings, what typically gets lost are the implications of a Supreme Court pick for labor and the rights of workers. Courts have traditionally existed to protect property and the rights of property owners. As employers are typically viewed as traditional property owners, with workers having no such corresponding property rights in their labor, courts have tended to resolve disputes in favor of employers against the interests of workers.
Therefore, the stakes in the upcoming confirmation battle over the next Supreme Court justice could not be higher. Over the years, especially since Reagan’s presidency, the rights of workers have been eroded. First, the Reagan administration and subsequent Republican administrations, packed the National Labor Relations Board (NLRB) with people who were anti-labor. Second, these NLRB rulings were only upheld by conservative majorities on the Supreme Court.
A solid conservative majority on the Court would limit even further any rights that workers may have. Because workers have few rights, especially in our increasingly global economy, wages have been declining. A key reason for the decline in wages is that over the years corporate managers have sought to maximize shareholder value. To do so, they have needed to reduce costs, and labor costs have easily been reduced through the outsourcing of operations to places where labor costs are only a fraction of what they are in the U.S. Not only have the jobs lost been higher paying union jobs, but the contraction of available middle class blue-collar jobs has only further exerted a downward pressure on wages.
Were the U.S. governed by a more mercantilist public philosophy with perhaps a viable industrial policy, it would be more difficult to simply move capital out of the country because it would not be in the interest of the country to do so. Perhaps the great irony of an administration that talks about “America First,” is that it doesn’t seem to apply to economic policy; only to foreign affairs. And yet, one might think that an America First agenda would include a mercantilist policy which puts the national economic interests, including the interests of workers, first. This, of course, would entail a redefinition of property rights.
In 1981, the Supreme Court decided the case of First National Maintenance Corporation v. NLRB. At issue in this case was whether a company had a right to terminate part of its operations, i.e. close plants and relocate capital elsewhere. The question before the Court was whether an employer was required to negotiate over its decision to close a part of its business, and whether bargaining would fall under the purview of the “wages, hours, and other terms and conditions of employment” standard in the National Labor Relations Act (NLRA). If it did, it might well imply a property right for workers in their jobs extending beyond the mere wages they were receiving.
The Court asserted that Congress in establishing the NLRA sought to limit the duty to bargain to matters of “wages, hours, and other terms and conditions of employment.” Rather Congress never expected that elected representatives of the union would become equal partners in the operation of the business. The Court concluded that management must be free from the constraints of the bargaining process to the extent essential for the running of a profitable business.
The Court essentially asserted that the profit motive trumped the interests of workers, especially in light of the fact that they had never been defined as rights in the first place. By all means, managers had every right to move capital elsewhere. The effect was clearly to legitimate capital mobility, often in an attempt to undermine unions. Only recently in the 2018 case of Janus v. AFSCME, did the Supreme Court deal another blow to unions.
There have been many cases in between, but these two are important. The first enshrines the property rights of managers to not only relocate capital elsewhere, but to effectively undermine unions, thereby driving down wages. The second deals a blow to the concept of a closed shop, thereby making organizing workers into unions more difficult.
At issue in Janus was the practice of public sector unions charging “agency fees” to those employees who opt not to join the union, but will nonetheless derive benefit because they will be included in a union contract. Agency fees essentially attempt to address the problem of “free riders”— those who derive benefits without bearing the costs. Although agency fees are lower than union dues, the effect may have been to encourage employees to join.
By removing this requirement, the Court was making it easier for workers to decline union membership, thereby making it more difficult to organize workers. To a certain extent, this parallels a trend in many southern and western states following the Taft Hartley Act in 1947 towards right-to-work laws whereby closed union shops were prohibited and workers would be free to work for an employer without joining a union.
The effect of right-to-work laws has been to drive down wages in those states where they exist, thereby contributing to rising inequality. Although Janus only applied to public sector unions, it creates a precedent for private sector unions too. Still, the assault on public sector unions that this case represents is critical because the largest unions remaining in the country are indeed the public sector unions.
It is no coincidence that the largest decline in the minimum wage during the 1980s occurred during the largest decline in union membership. This is because the largest constituency for the minimum wage has been organized labor, and only when organized labor has advocated on its behalf, have there been increases in the minimum wage.
The same holds true for other worker protections, and it isn’t really difficult to see how a further move to the right on the Supreme Court could result in the further erosion of worker rights. It is in part because the Court has been eroding worker protections that there has been a decline in labor market institutions. With this decline in labor market institutions has come a corresponding decline in the middle class. The consequences of the next Supreme Court appointment for workers’ rights and the survival of the middle class will be enormous.