The Strategic Defeat of Labor: Your Government at Work

The decline of organized labor (from more than 30% of non-farm private sector workers in the ’50s to around 6% today) is often presented as something that “just happened” — a spontaneous fact of nature beyond human control, like glaciation or asteroid strikes. Far from it.

Both the declining bargaining power of labor since 1980, and the stagnation in real wages accompanying it, are products of deliberate human agency: A systematic revolution imposed from above, by the state in alliance with Big Business, to shift income upward on a massive scale.

From the early ’70s on, the business press pushed scare stories — and think tanks cranked out alarmist “studies” — about a looming “capital shortage,” and the need to shift a major portion of national income from consumption to investment. A 1974 Business Week article warned:

“Some people will obviously have to do with less. … [I]t will be a hard pill for many Americans to swallow — the idea of doing with less so that big business can have more. … Nothing that this nation, or any other nation has done in modern history compares in difficulty with the selling job that must now be done to make people accept the new reality.”

That meant government “austerity” (read: Cuts in the “social safety net,” not in wealth transfers to the Military-Industrial Complex and Big Business in general) and a cap on real wages.

From the Volcker Recession of the early ’80s to the present, fighting inflation has been the Federal Reserve’s priority. And fighting inflation translates, quite literally, into weakening the bargaining power of labor by throwing million out of work whenever labor threatens to get the upper hand in labor negotiations.

A great old Tom Tomorrow cartoon from the ’90s shows “Greenspanman,” normally a mild-mannered banker, reacting to news of falling unemployment and rising wages: He throws the lever on his interest rate machine to “raise unemployment to a nice healthy level.” In the following panel, a worker demanding a 25 cent raise is told “Hah! Don’t you know that Greenspanman has alleviated the labor shortage? Your inflation-inducing demands will fall on deaf ears now, my friend!”

Lest you think this mere satire, consider Greenspan’s own remarks to Congress at the same time. Greenspan reassured Capitol Hill that he didn’t foresee an increase in interest rates for the time being, despite unemployment levels that threatened to fall below 5%, because the job insecurity of the tech economy was almost as good as high unemployment in reducing the bargaining power of labor (and hence upward pressure on wages). For America’s central bankers, “inflation” = “high wages.” Do they consider a tenfold increase in profit inflationary? Um, not so much.

The executive branch under Reagan also made a strategic decision to bust unions, starting with the PATCO strike. The administration also packed the National Labor Relations Board with members seriously disinclined to take the side of union organizers punitively fired (illegal under the terms of the Wagner Act).

Don’t like the Wagner Act? Good for you. Bear in mind, though, it was the federal government — acting on behalf of employers — that encouraged labor to turn to the Wagner model of certification elections in the first place. For the same reason they’d previously backed company unions under the American Plan, big employers like General Electric liked industrial unions as officially certified bargaining agents for an entire workplace. That an end to the need for negotiating with a whole host of balkanized trade unions in the same workplace, and put the union leadership in the position of enforcing contracts against its own members, in the event of slowdowns or wildcat strikes.

As Adam Smith observed so cogently over two hundred years ago, when government undertakes to regulate relations between workmen and their masters, it usually has the masters for its counselors.

I’m all in favor of labor abandoning the Wagner model. I’d love to see workers decide, in lieu of NLRB certification, to simply start acting like a union by way of unannounced one-day walkouts and sickouts, slowdown, work to rule, wildcat strikes, open-mouth sabotage, and sympathy and boycott strikes aimed at disrupting corporate supply and distribution chains.

Know what would happen if workers adopted this approach on a large scale? Employers would scramble to invite ALF-CIO organizers into the workplace. They’d encourage employees to sign union cards and canvass their workforces, holding meetings to encourage them to vote for certification.

If labor stopped playing by the bosses’ rules and adopted a strategy of full-blown guerrilla warfare, the bosses would be begging us to sign a contract — the same way they did when Wagner was passed in the first place.

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