In the early 1900s, Henry Ford paid his workers more than he had to, because he wanted them to earn enough to buy the cars they produced, according to Paul Clark, head of Penn State's Department of Labor Studies and Employment Relations.
Conservatives - mainly Republicans - and the business community, which have been attacking organized labor for three decades, have forgotten the great industrialist's lesson, said Clark, asked to assess how unions are doing this Labor Day.
And that hasn't been good for America, he said.
Mirror photo by Gary M. Baranec
Central Labor Council president Bob Kutz welcomes each labor union group participating in Altoona’s annual Labor Day parade.
The attacks, which began with President Ronald Reagan, have weakened unions, so they now represent only 12 percent of American workers, he said.
Weakened unions mean lower wages, which means less buying power for the middle class, which means a sluggish economy, he said.
It has created a "negative spiral," he said.
Blair County Republican Committee Chairman A.C. Stickel disagrees.
The economy works better when markets - not unions - set wages, he said.
If unions set wages artificially high, products cost more and fewer people buy them, he said, taking the opposite tack.
Conversely, if a firm pays lower wages, it can afford to employ more workers, Stickel said.
High wages can kill businesses, Stickel said.
He remembers a unionized steelworker who was making $20 a hour, saying he'd rather lose his job than take the 25-cents-an-hour cut the company was asking for, so it could retool and become competitive in the international marketplace again.
"Guess what. Those steel mills closed," he said. "They never did reopen."
He doubted that man was making $20 an hour now, wherever he works.
Globalization has contributed to the negative spiral, Clark said.
Companies who have union employees earning good wages can transfer that work overseas, where employees earn less, eliminating those American jobs.
The mere threat of those jobs leaving discourages unionization and keeps wages down, because workers know those jobs could go overseas, Clark said.
Over the last 30 to 40 years, workers' wages have stagnated, after accounting for inflation, Clark said.
Yet productivity has ratcheted up.
The beneficiaries of that productivity gain are mainly the top 5 percent, he said.
"The wealth that is being generated is not being shared with the middle class," he said.
That wealth under the control of the top 5 percent among earners doesn't stimulate the economy like it would under the control of the middle class, because wealthy people don't spend as much on consumer goods as a percentage of income, he said.
"You can only buy so much," Clark said.
Like Clark, Stickel credits unions - mainly during the early part of the 20th century - for bringing wages and working conditions up to modern standards.
"Many of the things they fought for are now federal and state law," Stickel said. "Good things for everybody."
Unions also benefited workers who never realized it by virtue of the threat of unionization, which helped keep non-union wages higher in companies whose management didn't want to provide an incentive to unionize, Clark said.
But now unions are not enough concerned with their members and with helping businesses make good products and provide good service and too concerned with political matters, Stickel said.
Who's the enemy?
Reagan wasn't their enemy, but they made him - and Republicans in general - their enemy, Stickel said.
Reagan became the target when he fired the air traffic controllers for striking, he said.
He fired them not to break the union, but because they were violating a law that didn't allow them to strike, as members of a government union, Stickel said.
In the heyday of unions, in the 1950s and 1960s, the powerful ones were private-sector: the Teamsters, the United Mineworkers and the United Auto Workers.
They bore the brunt of the attacks, which reduced private-sector unionization to about 8 percent, eventually, Clark said.
Because of that reduction, public sector unions like the American Federation of State, County and Municipal Employees, the Service Employees International Union and the teachers' unions grew in relative importance, Clark said.
But during the last two or three years, opponents of organized labor have taken on public sector unions too, Clark said.
That attack has a political dimension, Clark said.
Traditionally, unions have supported the Democrats, he said.
That linkage began in earnest after the firing of the air traffic controllers, as Reagan was a Republican, Stickel said.
Looking for stability
Republicans and other conservatives have benefited from the recent weakening of the public unions, exemplified by the loss of many collective bargaining rights by government workers in Wisconsin, Clark said.
"Public employees are under attack like I've never seen before," said Mickey Sgro, director of AFSCME District Council 83 in Duncansville. "It's so disheartening."
The Republicans and conservatives have a good game plan, Clark said.
Insofar as they can damage unions, they can damage Democrats, and insofar as they can damage Democrats, they can gain power and further weaken labor law protection of workers, he said.
"That means unions would be even more vulnerable," he said. "The labor movement in this country is pretty well besieged on all fronts," he said.
Unions give workers a voice, Sgro said.
"If you don't have a voice in your workplace, you could really be struggling," he said.
The ultimate aim is stability, he said.
"Pay taxes, have a household, coach Little League," he said.
It doesn't take a union to get a good wage, though, Stickel said.
The market can take care of that, he said.
When he hires someone to work in his tax business, he needs to pay more than minimum wage, he said.
But there's cause for optimism, said Bob Kutz, president of the Blair-Bedford Central Labor Council.
Workers are seeing how harsh they can be treated without the protection of a union, how companies can take "extreme advantage," Kutz said.
"They're finding themselves in situations they can't survive in, so they organize," he said.
Mirror Staff Writer William Kibler is at 949-7038.