Right to Work? Unions & Income Inequality


Over the past three decades in the United States, the wealth gap between the richest Americans and everyone else has reached new extremes. At the same time, labor union membership has drastically decreased. In his book What Unions No Longer Do, sociologist Jake Rosenfeld argues that you can't understand one trend without the other. Rosenfeld shares ideas from his book and considers what so-called "Right to Work" legislation may mean for the future of organized labor. 


Jake Rosenfeld

Claire Navarro (host): Thanks for listening to Hold That Thought. I’m Claire Navarro. Throughout the 2016 presidential election and into 2017, there has been a lot of public attention on income inequality – the huge and growing gap between the richest and poorest Americans. There are a lot of competing ideas out there about how to fix income inequality, or even whether it’s something that needs to be fixed. But how did we get here in the first place? To talk about one reason, and also about Missouri’s recently passed Right to Work law – as we’ll find, the topics are related – I sat down with sociologist Jake Rosenfeld.

Jake Rosenfeld (guest): I'm Jake Rosenfeld, associate professor of sociology at Washington University

CN: Rosenfeld’s longtime interest in inequality led him to study groups that often don’t get that much public attention – labor unions.

JR: It became pretty apparent early on in my research that you couldn't understand the decades-long rise in inequality in this country without understanding the opposite trend in organized labor - that as inequality had risen from the mid to late 1970s onward, organized labor had taken a steep, steep decline. The trends matched perfectly. And I've spent a lot of my kind of research effort in the subsequent years untangling how they're related.

CN: You probably think of unions as organizations that fight for better pay, benefits, and working conditions for union members. That’s true, Rosenfeld says, but historically, organized labor has actually done much more than that. In his book What Unions No Longer Do, he lays out how, in past decades, strong unions created better conditions for all workers, not just for members. There are few main ways that these spillover effects came about. 

JR: One is just simply going through the standard union role of servicing their members. That oftentimes would influence nonunion workplaces to raise their wages and to improve their benefit packages because they were worried about a union coming in through their doors. So they're watching what the neighboring firm's doing. If it happens to be organized, they say 'OK, well we don't want a union here. So we better match what they're doing.' These are what are referred to as threat effects in the literature.

CN: In other cases, non-union workplaces matched union wages not out of fear, but because higher wages became the norm. This would happen when industry leaders used organized labor.

JR: We know from surveys of employers, when you ask them, 'Well, how do you set wages and benefit packages at your workplace?' they say, 'We oftentimes look to what the leaders are doing.' So if that leader happens to be organized, you're going to match their pay and benefits scales, even if you have no labor union at your own place of business.

CN: So as organized labor achieved higher wages, workers across the board – union and nonunion – reaped the benefits. Unions leveled the playing field between workers and employers. In the introduction to his bookRosenfeld says they were “the core equalizing institution.” In part, that power came through politics.    

JR: There were two sets of organizations in the history of U.S. politics that kind of brought working people, and especially people lacking a college or advanced education, into the political sphere. And those organizations were labor unions and churches. I should back up quickly and say that a longstanding finding from political science research is that the more education you have, the much more likely you are to vote and to participate in politics across all sorts of other dimensions. The two sets of organizations that helped level that out a bit were organized labor and churches, and now we're in a situation where organized labor has vastly, vastly declined in its ability to do that.

CN: This brings us up to the present – again, Rosenfeld’s book title is What Unions No Longer Do. Union membership has plummeted since the 1970s.

JR: Now we're seeing the effects of what happens when there isn't much of an organized labor presence to speak of. You have runaway inequality, and you have political debates that are increasingly lopsided when it comes to issues pertaining to working men and women in the country.

CN: Some of this dramatic decline is the result of automation – fewer workers are needed to do the same job. Globalization also played a roll. But that’s not the full picture.

JR: It's interesting if you look at the United States, we see dramatic declines in industries such as truck driving and in industries such as construction work. Now these aren't jobs that you can ship overseas. These aren't jobs that as of yet have been automated, so that points to a third set of factors which have to do with heightened employer opposition to organized labor combined with heightened political opposition to organized labor, starting again in the mid to late 1970s.

CN: Political opposition continues today. This rings especially true here in Missouri recently. On February 6, despite intense labor opposition, newly elected governor Eric Greitens signed legislation making Missouri the 28th Right-to-Work state. If you’re from the area you probably know what “right to work” means, but a quick recap: under the law, if you’re an employee at an organized workplace, you aren’t required to pay union dues. At first glance this seems fair enough – shouldn’t it be every person’s choice whether or not to join a group like a union? Well, maybe, maybe not.

JR:  Well here's how I'd describe it. From the perspective of organized labor, they're in a position where in a Right to Work context they legally still have to represent all those workers at the worksite that they've organized, even those workers who hate unions and decide, 'we're not going to give you a penny.' The union is still legally required to represent those workers, to bargain for their contracts, to represent them if they file a grievance against their employer, or are hurt on the job. All of that costs money, that representation, and the union is legally required to provide it. That's strange. You know, it's hard to think of another organization where you cannot pay them any money, not like them at all, not want anything to do with them, yet they still have to represent your interests when a situation arises. So you can understand unions' frustration, and there have been calls from some unions saying, 'OK we'll accept Right to Work, but we should not be on the hook to represent those workers who've decided they don't want anything to do with us.’ I would say, generally speaking, that seems fair. But that's not where the legal landscape is right now.

CN: In this political landscape, Greteins and many fellow Republicans argue that  being a Right to Work state will attract business and be good for Missouri’s economy.  I asked Rosenfeld whether there was any truth to that.

JR: Generally speaking, no, there's not much evidence for it. That said, you know it's very thorny issue to study because most of the states went Right to Work a long, long time ago before we had good data collection efforts to really study the impact of it. We've had some recent, very recent, examples - and we'll have another one here in Missouri - that have been too recent to study the effects. You can look across the landscape today - you know Indiana's economy has done quite well, and Indiana passed a Right to Work law in 2012. But a lot of states economies have been doing quite well since 2012 because we were digging ourselves still out of the after-effects of the great recession. We do know from research that Right to Work states tend to have on average higher poverty rates, lower average wages. Is that due to their right to work status? Probably not. We're talking about states like Mississippi and Alabama. So I would say Right to Work is generally an issue that we know does hurt unions. Its effect on the state-level economy is I still think undetermined, and if I had to guess, not that large one way or the other.

CN: So under Right to Work, unions are put in a hard spot. They have to represent workers who don’t have to pay dues. With fewer dues-paying members, they have even less influence in bargaining with employers. When employers have all the control, there are no union wage spillover effects, and income inequality goes up. This is not looking like a very good picture. But, Rosenfeld says, there’s still hope for unions.

JR: There are instances in which Right to Work prevails, and in which organized labor can still maintain a really strong presence. So there are counter examples out there. And the hope I think for organized labor here in Missouri and other places in which Right to Work seems to be coming down the pipeline is that they've looked to these places for an example of how to maintain themselves in this new regime.

CN: So where exactly can labor look for these positive examples? One is a place often linked more with fun than with work.

JR: Organized labor still has a strong and actually growing presence anchored in Las Vegas. Nevada's a Right to Work state. Las Vegas has some of the most powerful and politically impressive labor unions in the country today. And so Nevada, you would think and I would hope Missouri unions and other unions across the country are sending people, sending staff, calling up, and trying to find out what they're doing right out there in Nevada, in Las Vegas in particular.

CN: Some of what they’re doing right has to do with strong leadership and strong ties to the Democratic party, Rosenfeld says. This level of or organization leads to one important thing:

JR: In places like Las Vegas Nevada the vast, vast majority of workers at unionized workplaces voluntarily pay dues. We're talking 85, 90, sometimes 95 percent.

CN: Despite the Las Vegas example, across the country the number of union workers continues to go down, especially in the private sector. With places like Missouri and Kentucky passing Right to Work laws in 2017, the trend doesn’t seem to be slowing. So what lies ahead? In an age of runaway income inequality, is there a future for what was once the core equalizing institution?

JR: Well, at some point you hit zero, so there is an end. You know I'm pretty pessimistic on this score. That said, there have been some pretty dramatic developments, whether you look at the fight for 15, whether you look at fast-food wage protests, pressure on companies like Wal-Mart and others to improve their wages and working conditions - some of which have scored real lasting victories that I would not have guessed at, given the current state of organized labor. Because it's important to keep in mind - and oftentimes it gets lost in the coverage - many of these efforts are union led efforts. So the fight for 15 began as a small organizing campaign in the town of SeaTac Washington, and then kind of blossomed into a nationwide effort to raise the minimum wage that has seen state after state, city after city - not here in St. Louis yet - but has scored all these victories. Dramatic victories that have really changed the working conditions and wages for millions of low income Americans. So from the perspective of organized labor, those are I think a really heartening developments. What they haven't done yet is translate into new dues-paying members. And I think that's the huge conundrum going forward. I think there will always be a need from workers who feel like they're not getting a fair shake at work to form some sort of collective entity to bargain on more on a more or less equal footing with their employer. That speaks to kind of a durable and permanent need for something that looks like labor unions. What the kind of future of organized labor will look like, I still think is a real open question.

CN: Many thanks to Jake Rosenfeld for joining Hold That Thought. For many more ideas to explore, including more thoughts from our sociology faculty in our ongoing series on inequality, please visit holdthatthought.wustl.edu. Thanks for listening.