Great Graphics: Capital Gets Organized, But Not Labor

It should have been a lay-up. United Auto Workers were trying to unionize a Volkswagen plan in Chattanooga, Tennessee and they did not face management hostility. Far from it. Volkswagen wanted the union to facility worker councils that are used throughout the company’s factories to ostensibly help productivity and morale. Volkswagen even let the union campaign in the factory.

However, some state politicians and outside anti-union agitators and money persuaded a slightly majority of workers not to support the union. UAW is reportedly appealing the vote to the National Labor Relations Board due to the external influence.

UAW hoped that unionizing the Volkswagen plant would be a beachhead for reinvigorating the union movement in the south, were foreign car plants, and manufacturing more broadly, have been increasingly located. UAW membership has fallen from 1.5 mln in 1979 to 400k today. And even this may overstate the case. As part of the adjunct faculty at New York University, I am represented by UAW.

As these first Great Graphics from Pew Research Center illustrate, unionization in the US continues to be on a downward slide. The top chart shows the number of workers unionized (public and private sectors), while the lower charts shows in percentage terms. The rate of unionization has been essentially cut in half over the past 30 years.

Yet one of the important points that emerges from Pew Research is that the rate of unionization is much lower than the public support. In June 2013, Pew found that half of Americans (51%) had a favorable opinion about unions compared with 42% that did not. This was the highest favorable view since 2007, though still below the 63% favorable stance in 2001.

In a separate survey in 2012, Pew found nearly two-thirds (64%) of Americans thought unions were “necessary to protect working people”. Yet, 57% also said that unions had “too much power.”

While private sector labor continues to struggle to organize, capital knows no such problem. It appears that wave of merger and acquisitions and begun. This final Great Graphic, from the Wall Street Journal shows how the cable television industry has gotten organized in the US. Each of the four companies is an amalgamation of more than half a dozen other companies, some of which were themselves combinations of other companies. This same thing has happened in various industries: consolidation and concentration is the main form of organization.

Students of economics learn that there are three factors of production, land, labor and capital. The people associated with each sought to organize. Farmers formed coops and political parties. Even today the political clout wielded by the agricultural sector in major industrialized countries, including the United States, France and Japan exceeds their size. Capital organizes. At first, pool, trusts and cartels, were arranged, but the agreements proved unprotected by the courts and the corporate form (or something similar) was eventually adopted.

Of the three factors of production only the organization of labor meets strong opposition. Perhaps as more contemplate the growing disparity of wealth and power within industrialized countries, organized labor will be seen as part of a potential solution.

This piece is cross-posted from Marc to Market with permission.

One Response to "Great Graphics: Capital Gets Organized, But Not Labor"

  1. benleet   February 26, 2014 at 3:02 pm

    Some ascribe the VW election as a reaction to labor destroying GM, but that is short sighted version. This may seem tangential but it illustrates how capital behaves:
    "If bailed-out General Motors had banked the $20.4 billion it distributed to shareholders as buybacks from 1986 through 2002 (with a 2.5% after tax annual return), it would have had $35 billion in 2009 to stave off bankruptcy and respond to global competition.
    And the bailed-out banks? Eight of the biggest spent a total of $182 billion on buybacks from 2000 to 2007. That reduced their ability to cover their bets on derivatives, exacerbating the crisis they created in the first place.
    The experience of this decade suggests that when profitability returns, buybacks will again be a top priority for corporations—at the expense of initiatives that could help spur a solid recovery. " William Lazonick, Bloomberg Business Week, Aug 13, 2009.