The American middle class is dead — The PRO Act would resuscitate it
It should come as no surprise that big business lobbyists and anti-union politicians are lining up to block the PRO Act, the massive labor law reform bill that passed the House on Tuesday. Their aggressive tactics over the past four decades have protected corporate interests at all costs, while amplifying economic inequality in America at a nauseating rate.
In 1978, the average CEO earned about 31 times more than the average worker. Productivity began outpacing wage growth in the Reagan era and it’s gotten worse ever since. Research shows workers are getting more done, year over year, but the vast majority of the rewards are going to the owners, executives, and shareholders. Today, the CEO brings home about 320 times more than the typical employee.
This immense gap is a testament to the weakened bargaining power of American workers. Just 6 percent of private sector employees belong to unions, down from a high of 35 percent just a few decades ago. The causes for union decline have been studied and debated for years and include the effects of globalization, outsourcing, financialization, and increased employer hostility toward unions. But we can really point to the Taft-Hartley Act as the turning point.
Signed into law in 1947 and still in effect today, Taft-Hartley outlawed a variety of union tactics that had been very effective in the 1930s. It deterred strikes by allowing employers to permanently replace the workers on the picket lines. And it legalized right-to-work laws, enabling workers in unionized shops to opt out of paying dues while still enjoying the benefits of the collective bargaining agreement.
The PRO Act aims to repeal many elements of Taft-Hartley by resetting labor relations to look more like they did during the New Deal Era, when unions grew and thrived, and by banning right-to-work laws in the 27 states where they are still on the books. It would also create tough new civil penalties for firing workers who take part in union organizing drives — currently a mere slap on the wrist — and it would tighten the timeline for union elections. That would mean less time for employers to hold captive audience meetings and bully workers out of joining the union.
Additionally, the PRO Act would require binding arbitration for unsettled first contracts. Not only is it incredibly difficult to successfully organize a union in the U.S., but in those instances when a union does win recognition, employers often stall negotiations as long as possible. The union’s chances of settling its first contract within one year are less than 50 percent. Binding arbitration would require a third party to settle unresolved issues in a timely manner.
Finally, the PRO Act would make it harder for gig companies like Uber and Lyft to classify their workers as independent contractors. If they were correctly classified as employees, these workers would be eligible for health benefits, retirement plans, workers’ compensation insurance, and, importantly, union membership.
While the PRO Act’s chances of passing the Senate are slim without eliminating the filibuster, senators should be aware that their voters are overwhelmingly workers, not CEOs. They should know that a recent Gallup poll revealed public support for unions is at an all-time high of 65 percent, and that MIT researchers found demand for a union by non-union workers is at about 50 percent.
With a better set of protections in place, the actual unionization rate would more accurately reflect this demand. In the public sector, where state-level labor laws often provide stronger protections for workers to organize, the unionization rate stands at about 35 percent nationwide.
When workers have a voice and the ability to organize and bargain free from coercion, they bring home more earnings to support themselves, their families, and their local economy. On average, unionized workers make 15 to 25 percent more than non-union workers depending on how the differential is calculated. People of color, immigrants, and women typically see the largest increases in pay compared to their non-union wages.
The middle class was built on a foundation of worker voice and prosperity, and it has withered and died in their absence. It’s way past time to modify our outdated labor laws. The PRO Act would give American workers a fighting chance to earn a decent living.
Todd E. Vachon, Ph.D. is the faculty coordinator of the Labor Education Action Research Network (LEARN) in the School of Management and Labor Relations at Rutgers, The State University of New Jersey.