As we settle into our couches tonight to watch “The Office” for the first time in months, few of us are likely to think about what the end of the writer’s strike means for the economy. Indeed, one of the reasons we watch television is to distract ourselves from worrying about issues like the collapsing housing market and the current economic slowdown.
But, as we press the “on” button on our remotes, we should give at least a moment’s thought to the writers’ impact on the economy. It’s not that the writers’ return to work will by itself generate an economic recovery—although estimates indicate that billions of dollars in wages and economic activity were lost during the strike—but rather, because what they did is one of the keys to our economic recovery.
By working together, as part of a union, writers—a relatively small and independent group of workers spread out across the country—were able to successfully negotiate with incredibly powerful multinational companies. The writers were able secure what they felt was fair pay for their labor, including compensation for work that is distributed on the web. Together, writers were able to ensure that they benefit from technological change and get a fair share of the revenue they help generate, no matter how their writing is distributed.
The ability to negotiate for fair pay in the face of rapid change is exactly what workers and the economy need. Workers’ wages have been stagnant for years and in 2007 actually fell by nearly 1 percent, after adjusting for inflation. Workers have become ever more productive, in part because of how they use technology, but they haven’t benefited from this increased productivity as much as they should.
Without rising wages, workers have had to borrow to keep up with their expenses. When housing prices were appreciating, workers could use their homes like ATM machines to compensate for low salaries. And for a while, this borrowing-based consumption fueled the economy. But now that the housing bubble has burst, it is clear that only rising wages will provide a stable base needed to drive the economy. (Families are already working just about as many hours as they can, so it is nearly impossible to work much harder.)
When workers join together in a union, like the writers, they can negotiate for higher wages and better benefits: Department of Labor figures show that union members receive wages that are about 30 percent higher than those of workers not in a union, and union members are much more likely to receive heath and retirement benefits. And when unions are strong and able to represent the people who want to join them, these gains spread throughout the economy. Non-union companies also increase their wages and all workers have more purchasing power, producing a “virtuous circle of prosperity and jobs,” according to U.C. Berkeley professor Harley Shaiken.
Unfortunately, workers considering forming a union today face an undemocratic system and are commonly intimidated. Employers legally can force workers to attend anti-union meetings, including “one-on-one conversations” with supervisors, which happen in over 90 percent of organizing campaigns, according to a Cornell University study. Employers can even “predict” (but not “threaten”) that unionization will force the company to close its doors. Workers often are pressured by employers to reveal their private preferences for the union.
As a result, even though half of all workers today say they would like to join a union, less than 8 percent of private-sector workers are actually part of a union. An important step toward helping workers join together in unions to get their fair share and jump start the economy is for Congress to pass the Employee Free Choice Act. The bill would allow an employee to choose to join a union by signing a membership card—a system that works well at the small number of workplaces that choose to permit it—and also promotes good-faith bargaining so that employees can negotiate a first contract.
In short, the bill would enable more workers to join together like the writers to make sure their work is fairly compensated.
While the economy needs far more than just increased unionization—efforts to prevent further deterioration in the housing market, for one—making it easier for more workers to act like the writers did is a key step.
David Madland is the Director of the American Worker Project.
The positions of American Progress, and our policy experts, are independent, and the findings and conclusions presented are those of American Progress alone. A full list of supporters is available here. American Progress would like to acknowledge the many generous supporters who make our work possible.
Senior Fellow; Senior Adviser, American Worker Project