October 21, 2006
The Wagner Act Revisited II Posted by John Steele Gordon at 02:00 PM EST Joshua Zeitz’s post on the Wagner Act reads a bit like an editorial in a union newspaper. I, too, celebrate the Wagner Act as one of the great achievements of the New Deal. It brought the power of labor and management much more into balance and brought about the unionization of much of American industry. Membership in the craft unions of the AFL increased considerably, but the greatest gains were among unskilled and semiskilled workers (exactly the workers that most needed unions to protect and advance their interests). In the six years after the passage of the Act, union membership more than doubled.
But as so often happens when a great reform comes about, the Wagner Act overcorrected in some ways. For instance, while it listed a number of “unfair labor practices” that companies were forbidden to engage in, it did not list a single one that unions were forbidden to utilize. In 1947 the famous “do-nothing” eightieth Congress passed the Taft-Hartley Act over President Truman’s veto. Its most famous provision was to enable the government to interrupt a strike with an 80-day cooling-off period while government mediators sought a settlement. But it also outlawed secondary boycotts, which had been a powerful weapon in labor’s arsenal, and the closed shop (where a worker has to be a member of the union before he can be hired—not that different from a medieval guild). It also allowed companies to fully inform their workers regarding the company’s position on issues in an election to certify a union, as long as they used no threats. It also allowed management to call an election on its own if it chose to and forbade unions, just as the Wagner Act had forbidden management, to coerce workers or to refuse to bargain. The Taft-Hartley Act was passed in an era of intense labor unrest. In 1946 there had been a total of 125 million man-days lost to strikes, and in each of the next three years there was an average of 40 million. But labor and management learned to bargain more successfully in subsequent decades, and in 1992, in a vastly larger economy with a far larger workforce, there were only 4 million man-days lost to strikes. While the Taft-Hartley Act was invoked often to end strikes in the first two decades after it was passed, it has been invoked only once in the last 30 years. Part of the reason for that is that over the 70 years since the Wagner Act, the economy has changed at least as much as it did in the 70 years prior to the Wagner Act, when the American economy went from a basically agricultural one to an industrial one. Since World War II, the economy has evolved from one where manufacturing dominated to one where information and services dominate. The result has been devastating to union membership and thus to the political power of union leaders. The chart below shows this: YEAR | % OF WORKERS UNIONIZED | PER CAPITA GDP (IN 2000 DOLLARS)
1955 33 $13,467
1965 28.2 $16,489
1975 21.6 $20,009
1985 17.4 $25,444
1995 14.3 $30,163
2005 12.5 $37,232 The chart doesn’t tell the whole story, however, for in 1955 there were few government workers unionized and today about one third are. If one takes out the government workers, only 7.5 percent of American salaried and wage employees are unionized today, about the same as in 1930. That is why the labor movement today is so desirous of amending the law so as to allow the certification of labor unions by means of just the card-check. Mr. Zeitz writes that this method is, “essentially, a simplification of the union election process that allows a critical majority of workers in a particular unit to trigger certification by signing a form endorsing a particular labor union.” This description leaves out a few details, to put it mildly. As the law stands now, a company must not only allow union efforts to organize its workers, it must do nothing whatever to interfere with the process. If a majority of the workforce signs cards requesting certification of the union, a government-supervised election is then held by secret ballot. At this point the company is empowered to give the workers information on its position. In other words, it can inform workers of reasons why they should vote against certification. In practice in recent years they have done exactly that and about half of certification elections have failed. Under the change in labor law advocated by the unions, unions would be able to put tremendous pressure on workers to sign the cards while the company could do nothing. Once more than 50 percent of the workers have signed cards—often in the presence of other workers and union organizers—that would be it, the union would represent the workers. In other words, the secret ballot, Australia’s great contribution to democracy that allows people to vote without fear of personal consequences or peer pressure, would be eliminated from union certification elections in the United States. It would be a grotesque step backwards. Mr. Zeitz writes, “Throughout the twentieth century, America’s economy was strongest when its unions were strongest. It’s time to restore the balance.” The chart above would indicate otherwise in recent decades. As union membership, and the union movement’s strength with it, declined by almost two thirds as a percentage of total workers, GDP per capita in constant dollars has increased by 276 percent. I certainly wouldn’t argue that there is an inverse correlation between union strength and national economic strength, but a positive correlation seems very unlikely.
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