Has American Labor Really Turned A Corner?

The following is just part of an excellent post by Paul Krugman in The New York Times:

Why did unions decline? It’s tempting to assume that their diminishment was inevitable in the face of global competition and the falling share of manufacturing, their traditional stronghold, in employment. But other advanced economies are still strongly unionized — in Denmark and Sweden, for example, about two-thirds of workers are union members.

So what happened in America? The most plausible explanation is that beginning in the 1970s, employers became very aggressive in fighting unionization efforts and were empowered to do so by a political climate, especially after the 1980 election of Ronald Reagan, in which Republicans were hostile to organized labor while Democrats were at best weakly in support.

Some existing unions — most famously the air traffic controllers — were broken. More important, unionization didn’t spread as America increasingly became a service economy. There was and is no fundamental economic reason giant employers like Walmart or Amazon couldn’t be mostly unionized. But they became giants in an era when employers were effectively free to pull out all the stops in blocking and, in some cases, persecuting union organizers.

Which brings us to the current moment, which may be an inflection point.

Right now there are two forces bolstering workers’ bargaining position. One is a tight labor market: We’ve just experienced the longest stretch of unemployment below 4 percent since the 1960s. This tight labor market is probably the main reason we’ve seen an “unexpected compression” of wages in recent years, with earnings rising much faster at the bottom than at the top.

The other is a shift in the political climate. President Biden, who joined a U.A.W. picket line in Michigan last September, is arguably the most pro-labor president since Harry Truman. This involves more than gestures. On Tuesday, for example, the Federal Trade Commission issued a ban on most noncompete clauses, which prevent a company’s employees from taking jobs with rival businesses; such clauses currently cover, roughly, an astonishing 30 million workers and have been a major force reducing labor market competition.

There’s a reason, then, that Biden has been getting early and enthusiastic endorsements from major unions, including the U.A.W. in January and, this week, the Building Trades Unions, which represents about three million workers in the United States and Canada.

But has American labor really turned a corner? Unfortunately, it’s easy to see how recent progress could be reversed. For one thing, that tight labor market might not persist. So far, the Biden economy has shrugged off all those confident predictions of recession, but that won’t always be the case.

And Biden could, of course, lose in November — and although Donald Trump portrays himself as a populist, his record shows that he’s anti-union.

So we won’t know for a while whether things are actually looking up for American workers.