The Stunning Rebirth of the American Labor Movement
To add insult to widespread injury, Wall Street was bailed out after it brought the world to the precipice of economic Armageddon. Millions of people lost their jobs, wages, and homes in the financial crisis, but not a single major Wall Street executive was charged with a crime.
Corporate raiders got the right to mount hostile takeovers of companies and then demand bigger profits. And since payrolls comprise about two-thirds of corporate costs, the raiders forced corporations to limit wages and benefits.
To achieve this, corporations sought to bust unions — outsourcing jobs abroad and moving to “right-to-work-for-less” states. They also illegally fired workers who tried to organize — at worst getting their hands slapped by a National Labor Relations Board that might eventually order them to reinstate workers and give them back pay.
Ronald Reagan legitimized all this when in 1981 he fired more than 11,000 striking air traffic controllers represented by the Professional Air Traffic Controllers Organization.
The result was a dramatic decline in the bargaining power of ordinary workers — both inside companies and in American politics. And with this decline came a shrinkage of the American middle class. It’s estimated that between 1979 and 2017, the typical U.S. worker lost out on $3,250 in pay every year due to the decline of unions.
In the 1950s, over a third of all private-sector workers were unionized. Today, unionized workers comprise just 6% of private-sector workers (10% of all workers belong to a union, but many work in the public sector).
From 1946 through the early 1970s, unions staged hundreds of major strikes each year. Between 1981 and 2022, the number of major strikes dropped to a few dozen per year.
But here’s the good news: The pendulum is now starting to swing back.
It’s not just the UAW. Recent contracts negotiated by Hollywood writers, UPS workers, Kaiser Permanente health care workers, and even university employees, among others, provide significant pay increases and more job security (writers even got some protections against AI).
Last year’s union contracts gave workers an average first-year wage increase of 6.6% — the highest raise since at least 1988. With signing bonuses and other lump-sum payments added in, 2023’s average first-year wage increase was 7.3%, also a record high.
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