Last Bastion of the Middle Class

The labor movement has received more attention in the last month than it has since the PATCO strike in 1981. State governors, starting with New Jersey to the dramatic confrontation between state employees and the governor of Wisconsin, are in essence addressing a symptom of much greater importance – the decline of the American middle class. The standard of living in the US has declined in the past 30 years. Americanfamilies are working more hours to maintain a standard of living that once could be supported by a single wage earner. In order to maintain that comfort level of 30 years ago, it has brought about the need for second wage earners followed by the leveraging through home equity mortgages and credit cards to augment stagnant salaries. The disturbing question is how many families could live on a single salary?

Ricardo Torres President & CEO – PSLC

Private sector unions have made painful concessions. The private sector unions, now at 7% density from a high of 35% in the 1960’s, have been ineffective in representing American workers dealing with the effects of the global labor market.

Big labor has devoted most of its resources and energy on political activity instead of developing programs that could have eased the transition into a global market. For example, big labor did nothing to address the shifting demographics of the labor force, nor did it havean alternative to technology as a substitute for labor, nor did it havea solution to the migration of jobs to the “Right to Work” states or overseas.

By comparison, public sector unions (NEA and AFSCME) have been immune from these threats. Public sector union employees have enjoyed generous benefits exceeding the private sector in health care, time off and job security. Public sector employees are not threatened by outsourcing and are rarely measured for productivity. The reality suggests that public sector unions, as a result, have slid into complacency. Thus, they were not prepared for the recent fiscal challenges by state governors.

Unfortunately, public sector employees have a reputation for apathy, and often demonstrate insensitivity for service to the people who pay their salaries. These employees, without choice (closed shops), have supported and contributed to the union leadership who put them intothis precarious position. State laws do not allow public union members to withhold or allocate their mandatory union dues. But remember that ittakes two for a collective bargain, and the government leaders are equally at fault. Why are public unions in this position? Did the momentum of benefits and special treatment cloud the inevitable realities of an economy unable to sustain the escalating expenses for both labor and management?

Regardless of the outcome in Wisconsin, the public sector will soon feel the effects of the global labor market. The balancing of the American standard of living with that of our global partners is going tocontinue to be an adjustment. Public sector employees will now have less discretionary income due to increased contributions to health care and, most probably, pension benefits. The private sector taxes can no longer support a sub-group of workers who are living in a paradigm that was relevant 30 years ago.

It has taken to 2011 and recent events to expose what the public sector unions have achieved across the United States. Municipal budgets can no longer rely on state and Federal support. Public budget decisionsare where they should be – in city hall. The public sector unions will now have to comprehend and master the art of concession bargaining. The UAW might be the model to get the needed training. The union leadership might do well to reeducate its members on their role as public servants with the word service being the root of the initiative. Change is difficult for most workers but it is change and constant re-evaluation that has been the cornerstone of successful business.

Government must embrace the notion of change for improvement sakeor else the standards of American living will continue to slip.

Michael L. Soares
Adjunct Professor
Industrial and Labor Relations

Salve Regina University
Newport, Rhode Island