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Time for a New Deal

Only recently has the situation outlined by Steven Greenhouse in his new book,The Big Squeeze, been getting serious attention from politicians. Average wages for American workers have been largely stagnating for a generation. Some six million more Americans have no health insurance today than did seven years ago. The distribution of income in the United States is as unequal as it was in the Roaring Twenties. With the country facing a possibly deep and painful recession, unemployment rising, and mortgage defaults at record levels, the poor state of the economy is finally high on the list of American concerns and is the leading presidential campaign issue.

But Steven Greenhouse, the labor reporter ofThe New York Times, has a still more disturbing story to tell. He shows how the nation’s businesses have illegally, callously, and systematically abused their workers in a time of increased global competition and technological change, while government protection of workers’ rights has significantly weakened. Greenhouse writes about factory employees and retail clerks, truck drivers and store managers, computer technicians, middle managers, and engineers. They all face similar difficulties: they have lost their places in what was once a secure and confident middle class. The longstanding distinction between the blue-collar and white-collar worker has been blurred. Good blue-collar jobs are disappearing rapidly as manufacturing industries decline; but many new white-collar jobs pay poorly, provide minimal health care and pension benefits, and offer little job security. There is now no privileged segment of earners in the nation except the upper 10 percent or so.

Greenhouse finds managers of countless companies, many of them well known and admired—not only Wal-Mart but JPMorgan Chase—who willfully break the law to reduce labor costs. As a matter of company policy, they have adopted harsh management techniques to sustain—at least until the current downturn in the economy—enormous profits. An excellent and relentless reporter, Greenhouse has not gone out of his way to uncover horror stories. He has attempted to find representative examples from the lives of workers. Barack Obama was much criticized by his Democratic colleagues when he said workers were bitter. They should read the stories of shameful treatment in Greenhouse’s book.

Kathy Saumier’s is one of those stories. She was hired as an inspector on the production line of Landis Plastics, a manufacturer of containers, whose new factory was near Syracuse, New York. Saumier, who had dropped out of high school at sixteen to help support her single working mother of five, thought she had at last found the job that would offer her security, decent benefits, and adequate pay.

But the Landis company, it turned out, had an unusually high percentage of severe accidents by industry standards, and when Saumier tried to address the problem, she came to be seen as a dangerous troublemaker. A close friend of hers lost a finger, and there were similar accidents. Many employees were often required to work twelve-hour days or on weekends, and were given demerits whenever they missed a day of work or left early, even when they had to deal with a serious emergency or a genuine illness. As demerits accumulated, Landis docked their pay. Almost all the low-level jobs were held by women, but only one of the higher-level jobs was, and women complained often of sexual harassment.

Saumier came to believe that only a union could get management to respond, and she started trying to organize her fellow workers. She also filed complaints about job safety with the Occupational Safety and Health Administration (OSHA) and a sexual discrimination suit with the Equal Employment Opportunity Commission (EEOC).

As Saumier’s organizing activities drew more attention, Landis tried to discredit her. First, the company accused her of tampering with the brakes on the car of a worker who opposed the union. The accusation did not hold up. The company then accused her of tampering with the lights of the car of another anti-union worker. A mechanic said the car simply had a faulty sensor light. She was at last removed as an inspector and given a job in which she was isolated in a room by herself.

When these tactics failed to get her to quit, she was called in by a Landis “human resources manager” and told that she had been accused of sexual harassment by two male workers. One of them said she pulled down his pants and tried to fondle his genitals. She denied the charges, but Landis then fired her, making a dramatic announcement to the press about her sexual overtures.

Kathy Saumier’s attempts to organize a union had already been widely reported in the local press, however. She had earlier testified before the New York State Assembly. Bruce Springsteen visited her. When hearings were held on the sexual harassment charges, her accusers were discredited, and the National Labor Relations Board ruled in her favor. OSHA and the EEOC had also supported Saumier’s charges of safety violations and sexual discrimination. OSHA eventually fined the company $720,700 for countless safety violations and Landis agreed to pay nearly $800,000 to workers to settle charges of sexual discrimination. To the outside world, it may have looked as if Saumier won. She received a financial settlement from the company, but it took more than a year for her to be reinstated in her job. Then, soon after she went back to work, she tore her rotator cuff and could no longer keep pace with the assembly line. She eventually had to leave.

The union got nowhere at Landis. Greenhouse reports that the starting wages are the same today as they were ten years ago, falling well behind inflation. Women still have almost none of the high-level jobs. The average worker now pays $2,300 in annual premiums to participate in the company health care plan, much more than before. When Landis was acquired by Berry Plastics in 2003, the new firm made the demerit systems more onerous and stopped contributing to the workers’ retirement program.

Many economists now argue that the decline of unionization in America has contributed significantly to stagnating wages and reduced benefits for workers. In the 1950s, unions represented about one third of all workers. Today, they represent about one in eight, and in the private sector, only one in twelve. It is tempting to believe that Americans just don’t approve of unions. Since 1981, when Ronald Reagan broke up the striking air traffic controllers’ union, their popularity in the US has fallen sharply. Like many others, Greenhouse thinks this disastrous strike was a turning point in the nation’s attitude toward workers. But, as he writes, some 50 million non-unionized American workers, according to surveys, now say that they definitely or probably would join one if given the option.

One problem for unions is that the economy has changed. Unions became powerful in manufacturing industries, especially after World War II, where profits were strong and many companies were confident about the future. At a time when the large manufacturing oligopolies, such as the auto and steel industries, are faltering from global competition and services are in ever-greater demand, unstable, fragmented, and frightened workforces are more difficult to organize. Greenhouse also argues that the unions themselves are at fault: they do not devote enough resources to organizing; their attitudes toward business are sometimes too confrontational, lacking in analysis of the concerns and strategies of management.

To Greenhouse, however, the biggest obstacle is posed by aggressive and often illegal anti-union tactics, like those Landis used against Kathy Saumier. Managers have made opposition to unions into an illegal art. In the 1960s, there were, Greenhouse reports, perhaps a hundred professional “union avoidance” consultants in the United States. Today, there are more than two thousand. In a separate study, two economists, John Schmitt and Ben Zipperer, found that illegal firings of workers trying to organize unions, a common practice, rose sharply in the 1980s and again in the 2000s.1The federal government is required by law to protect union organizers but it consistently fails to do so. The fines levied by the NLRB have long been meager. Meantime, management actions against unions are supported by the nation’s courts. In 2007, for example, the Supreme Court ruled that companies can bar union organizers from setting foot on their grounds.

Violations of minimum-wage and maximum-hour laws are increasing. Immigrants are especially easy targets, even though they are protected by the federal and state wage and hour laws. Julia Ortiz, an immigrant from the Dominican Republic, landed a job at a retailer called Save Smart in New York City. She worked for $35 a day for three years, six days a week, her pay typically coming to $210 a week. She couldn’t afford to buy her kids the food they needed, she told Greenhouse. When she and her children were sick they went to a crowded local clinic. Had she earned the legal minimum wage as well as time and a half pay for overtime, as is required by law, she would have taken home $414 a week. But like many other workers at Save Smart, she was hesitant to complain because she had no green card. An advocacy group finally encouraged Ortiz to file complaints with the Labor Department, and they ruled in her favor. Save Smart settled the case with Ortiz for $52,000 in back pay.

Few workers have Saumier’s or Ortiz’s tenacity. The government, Greenhouse found, is simply looking the other way. Three decades ago, there were more federal wage and hour inspectors than there are today, though the labor force was 40 percent smaller. Retailers, fast-food restaurants, and call centers have become the new sweatshops, and federal inspectors seldom visit them. Delivery men at Manhattan’s Gristedes and Food Emporium grocery store chains often have to work as many as seventy-five hours a week, earning less than $3 an hour. Employees told Greenhouse that managers at Toys-R-Us, Wal-Mart, Pep Boys, and Taco Bell, among countless others, erase hours worked from the time clock in order to reduce their pay or make them work illegally long hours.

Workers at some call centers are regularly docked for every minute they spend in the bathroom, according to Greenhouse. Wal-Mart and others have become notorious for locking in night-shift workers, often forcing them to work longer hours. A careful study in 2007 of workplace practices in New York City by three economists found violations of labor laws were widespread. Pay of $3 an hour, they report, is hardly unusual, although the New York State minimum wage is now $7.15 an hour.2

Particularly disheartening is the story, recounted by Greenhouse, of Drew Pooters. Pooters joined the air force right out of high school in Bartlesville, Oklahoma, and during fourteen years, some of it as a logistics specialist, with stations in Saudi Arabia and Somalia, he rose to staff sergeant. “It was the Reagan years, and everyone was worried about the evil Communists, and most of the guys in my class enlisted,” he told Greenhouse. “That’s the kind of place Bartlesville was.”

  1. 1

    John Schmitt and Ben Zipperer, “Dropping the Ax: Illegal Firings During Union Election Campaigns,” Center for Economic and Policy Research, Washington, D.C., January 2007.

  2. 2

    Annette Bernhardt, Siobhán McGrath, and James DeFilippis,Unregulated Work in the Global City: Employment and Labor Law Violations in New York City, Brennan Center for Justice, New York University, 2007, at www .brennancenter.org/globalcity.

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