The Employee Free Choice Act

One reason we’re in the crisis we’re in is because consumers have run out of money….If they can’t borrow anymore, and they have to rely on sinking wages, the entire economy is in trouble, because there’s not enough demand out there.” Reich added, “The point of the Employee Free Choice Act is to end intimidation and allow workers to join unions as they have a right to do. Workers want to be in unions and the majority of workers would clearly join if they could, and if they did have unions, they’d have higher wages and benefits. And if they had higher wags and benefits, they’d have the purchasing power to buy more goods and services.”

In fact, the relative stagnation of wages over the last few decades — due in large part to effective unionbusting aimed at keeping labor costs low — helped bring on the recession because too many low-income workers were suckered into mortgages they really couldn’t afford. Those mortgages were in turn bundled into the “toxic assets” — those various nearly-worthless investment vehicles — that have weakened the world’s financial systems and brought on our free-fall recession. As Daily Kos diarist reported last year, “AFL-CIO Associate General Counsel Damon Silvers lays out how the decline in unionization which began in the mid-Seventies led to the burst of the sub-prime bubble, and ultimately to today’s recession. And he wrote it way back in April.“

In contrast, this new Center for American Progress report points out, if unionization rates today were the same as they were in 1983, an additional $49 billion could be pumped into the economy by workers represented by unions. As the report co-authored by David Madland and Karla Walter says, “In 1983, 23.3 percent of American workers were either members of a union or represented by a union at their workplace. By 2008, that portion declined to 13.7 percent.” And, as Reich and the report noted, “Workers in unions earn 30% higher than non-union workers.”