Free Choice Act would restore balance

Paul F. Clark

In the month ahead, Congress will consider the Employee Free Choice Act. This legislation is designed to reform our nation’s primary labor law and re-establish the system of checks and balances between unions and management that historically has proved so beneficial to our nation.

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For the first 150 years of this country’s history, employers held all of the power in the workplace. The result was sweatshops, 12-hour days, cruel working conditions and a nation where some were wealthy, the vast majority were poor and the middle class was only a fraction of what it would become.

During the Great Depression, Congress took steps to more equally balance the power of employers and employees. Most significantly, it passed the National Labor Relations Act (NLRA), a law that gave most American workers the rights to organize a union, bargain collectively and strike.

The growth of unions following World War II played a critical role in the creation of the modern middle class in this country. To meet the rapidly growing consumer demand of the 1950s and 1960s, workers generated significant productivity gains; as a result, businesses generated significant profits. With union membership at its peak, employees received a larger share of those profits, which they spent on homes and cars and appliances. This, in turn, fed demand, creating more jobs and additional profits. Business owners, shareholders, workers and their families and the nation benefitted.

The past 50 years, however, have seen the percentage of the work force that belongs to unions decline steadily from a high of 35 percent to 12 percent today. The result has been growing income inequality and the decline of the middle class that emerged earlier in the century. As working families received a smaller share of the nation’s wealth, they either consumed less or bought on credit, both of which have contributed significantly to the current economic crisis.

In contrast, over the past decade, worker productivity rose significantly in the United States, while real income fell for middle-class families. Workers who helped produce the wealth saw a disproportionate share of it go to excessive compensation for CEOs, bankers and Wall Street executives. In fact, income for wealthy Americans has grown much faster than for the middle class.

Part of the genius of America’s Founding Fathers was the recognition that unchecked power corrupts. To address this issue, they established an exquisitely designed series of checks and balances among the branches of government.

The passage of the NLRA and other laws extended this principle to our economic institutions. For roughly 40 years the law had the intended effect of balancing power between labor and management.

Beginning in the 1970s, employers found loopholes in the NLRA. Slowly, the protections it provided employees were eroded and the playing field became tilted heavily in management’s favor.

The Employee Free Choice Act is an effort to restore the balance in labor-management relations fostered by the NLRA in 1935. This balance was consistent with this country’s values and contributed to decades of shared prosperity that created the American middle class.

The Act is now before Congress. Its passage would move us closer to economic recovery and toward a more equitable society.

Paul F. Clark is a professor and head of the Department of Labor Studies and Employment Relations at Penn State. Readers may write to him at pfc2@psu.edu.