"The Union Premium"

Council 4 Executive Director Sal Luciano, center, at a press conference.

Here’s a brief Labor Day quiz for you. See if you can identify the author of the following statement:

"Economic renewal that places working people and their families at the center of economic life cannot take place without effective unions.”

You probably thought is was a labor leader, maybe AFL-CIO President Richard Trumka? I did.

In fact, the author is Bishop Stephen E. Blaire of the United States Conference of Catholic Bishops. You can find that excerpt in his Labor Day 2012 essay “Placing Work and Workers at the Center of Economic Life .”

Blaire is the Chairman of the Conference’s Committee on Domestic Justice and Human Development, and he’s visibly troubled by what he calls a “broken economy” pockmarked by massive unemployment, underemployment and pervasive poverty. He and the Bishops describe this as “a serious economic and moral failure for our nation.”

I agree with Bishop Blaire: There is an essential need for unions to help fix the broken economy and it’s not by retreating and accepting less, but by advancing and demanding more. In fact that is the mission we are asked to accept in Bishop Blaire’s message: “At their best, unions demonstrate solidarity by bringing workers together to speak and act collectively to protect their rights and pursue the common good...."

From a very practical standpoint increased union membership would pump more money into the economy through increased purchases from the middle class. We are talking about real job-creating purchases like family homes, cars, appliances, home remodeling, family vacations and the like. We are talking as well about spending that happens locally, whether at the corner market, local diner or clothing store. Much of this “pent-up demand” is on hold because folks are either jobless, in fear of losing a job or suffering from big cuts in pay and benefits.

If union membership were to increase by just 5 percent, an extra than $25.5 billion in wages and salaries would be generated annually. If union membership was at the same level as in 1983, close to $50 billion in wages and salaries would be generated. This does not include the beneficial impact on wages for non-union workers.

All this extra cash translates in to extra spending power, more purchasing power and more job creation. It’s giving capitalism a chance to work the way it supposed to, producing a torrent of spending from the 99% rather than a trickle down from the one percent.

Why the increase in consumer spending and confidence? Because union jobs generally pay more and provide better benefits than their non-union counterparts. This “union premium” is well deserved because American productivity is among the highest in the industrialized world.

Even so, wages have not kept up with productivity increases. In the 1950s and 1960s, productivity increases were compensated with increases in wages. Unfortunately, from the 1970s forward, productivity continued to rise, but wages remained stagnant.

During this same period union jobs have declined as corporations and politicians aggressively pursued trade and other policies designed to obliterate trade unions and weaken the bargaining power of all workers.

An expansion of jobs represented by unions would have a beneficial impact on our broken economy. For too long, many have believed the absurd argument that giving more in the way of tax breaks to the rich will create more jobs. In truth, giving more to the one percent only bottles up the cash, makes them richer and creates very little economic activity.

AFSCME Local 884 President Ron Hobson, left, is standing up for workers' rights in New Haven.

But creating more spending power for middle class consumers via the “union premium” has a real chance of stimulating significant economic growth, creating jobs and rebuilding the middle class – in the words of the Conference of Catholic Bishops, “creating a more just economy that truly honors the dignity of work and the rights of workers.

Sal Luciano is Executive Director of Council 4. This article appeared in the Sept. 3 Journal-Inquirer.