New research shows that labor unions can help reduce the risk of poverty

labor union protest
Participants carry signs during a march and rally by labor union supporters in Los Angeles.

  • Belonging to a labor union lowers the likelihood that you’ll fall into poverty, new research shows.
  • Living in a state with higher unionization rates even if you’re not a member also helps.
  • Had union membership not declined since the 1970s, we could expect poverty rates to be lower today.
  • See more stories on Insider’s business page.

Belonging to a union or living in a US state where organized labor is relatively strong helps lower the likelihood that you’ll fall into poverty, according to our new research.

In a peer-reviewed study, we examined how unionization is correlated with poverty. We analyzed data on poverty and unionization rates from 1975 through 2015 using the Panel Study of Income Dynamics, which is widely considered to be the gold standard for tracking individuals over time. We used a variety of poverty measures in our analysis.

We found that households in which there was at least one union member had an average poverty rate of 5.9%, compared with 18.9% for nonunion households, based on a relative measure of poverty rather than an absolute measure, by which what it means to be poor is fixed over time.

Read more: I rage-quit my job of 6 years when a new employee was promoted over me. I don’t regret leaving in such an emotional way, but there are a few things I should’ve done differently.

We also wanted to examine the impact of living in a state with a higher rate of unionization to see whether this broadly affected the likelihood that someone would be in poverty compared with states with lower union membership. Using the same relative measure of poverty, we found that states with higher unionization rates had average poverty levels about 7% lower than states with lower unionization rates.

Our findings imply that a 5% decline in union membership translates, on average, into a 2% increase in the probability that a resident of the state will fall into poverty.

Why it matters

When policymakers and academics develop plans to address poverty, they rarely, to our knowledge, consider the impact of labor unions.

And yet research across social science disciplines show time and again that labor unions have been central to bolstering the American middle class by raising wages and expanding access to fringe benefits.

Thus, it is logical, though rarely discussed, that unions would also reduce the risk that people become impoverished.

Our study also helps explain why the United States has a relatively high rate of poverty18% as of 2017 – compared with other rich democracies. France and the Norway, for example, boast poverty rates in the single digits as well as higher rates of union membership.

Our results suggest that had union membership not declined dramatically since the 1970s, we could reasonably expect poverty rates would be significantly lower.

What’s next

We intend to conduct additional research, both within the United States and among other countries, to better understand the mechanisms linking unionization to poverty.

More broadly, the biggest open question is whether US labor unions can expand their membership again and provide these types of protections against adverse economic forces.

Tom VanHeuvelen, assistant professor of sociology, University of Minnesota and David Brady, professor of public policy, University of California, Riverside

The Conversation
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US labor board to hold hearing on whether to redo Amazon union election based on evidence submitted by union

amazon rwdsu BESSEMER, AL - MARCH 29: An RWDSU union rep holds a sign outside the Amazon fulfillment warehouse at the center of a unionization drive on March 29, 2021 in Bessemer, Alabama. Employees at the fulfillment center are currently voting on whether to form a union, a decision that could have national repercussions. (Photo by Elijah Nouvelage/Getty Images)
Amazon workers in Bessemer, Alabama, voted against forming a union, but the Retail Wholesale and Department Store Union, under which they would have unionized, challenged the results.

  • The National Labor Relations Board will hold a hearing on whether to redo the Amazon union vote in Bessemer, Alabama.
  • Amazon employees there voted against unionizing, but the Retail, Wholesale and Department Store Union challenged the results.
  • The NLRB said the union’s evidence warranted a hearing to consider whether Amazon acted illegally and whether a new election should be held.
  • Amazon has denied any wrongdoing.
  • See more stories on Insider’s business page.

The National Labor Relations Board on Wednesday said evidence submitted by the Retail Wholesale and Department Store Union concerning Amazon’s conduct during a union vote in Bessemer, Alabama, justified holding a hearing to review the evidence and determine whether to redo the election.

“The evidence submitted by the union in support of its objections could be grounds for overturning the election if introduced at a hearing,” the NLRB said.

The NLRB’s ruling clears the way for a hearing, which it plans to hold on May 7, where it will review the RWDSU’s evidence. If the NLRB finds Amazon illegally interfered in the election, it can void the results and re-run the election.

Amazon has denied any wrongdoing.

The RWDSU, the union which Amazon’s employees voted on whether to join, failed to secure enough votes from Amazon warehouse workers to form a union in a highly publicized election earlier this month.

When the NLRB publicly announced the vote count on April 9, the tally was 1,798 votes against unionizing and 738 votes for the union, with 505 ballots challenged and 76 ballots voided – 70.9% of valid votes counted were against the union.

But the RWDSU subsequently filed 23 objections against Amazon and how it acted during the contentious March election, claiming Amazon’s conduct prevented employees from having a “free and uncoerced exercise of choice” on which way to vote. The RWDSU alleged Amazon’s agents unlawfully threatened employees with closure of the warehouse if they joined the union and that the company emailed a warning it would lay off 75% of the proposed bargaining unit because of the union.

An Amazon spokesperson did not immediately respond to a request for comment on the NLRB’s statement.

At the May 7 hearing, the NLRB would have the option to overturn the election results if any evidence of illegal action is ruled credible.

(Reuters reporting by Nandita Bose in Washington; Editing by Chris Reese)

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Amazon’s victory against a union drive in Alabama proved workers want better workplaces, but America’s labor laws are too broken to help them get that, experts say

alabama amazon warehouse unionization 2x1
Amazon faces a historic union vote in Alabama.

After one of the most high-profile union – and anti-union – campaigns in recent history, Amazon employees in Bessemer, Alabama, voted overwhelmingly against unionizing, with the National Labor Relations Board confirming Friday that 71% of eligible ballots were cast in opposition.

But eight labor experts told Insider that focusing on the vote tally misses the bigger takeaway from this saga: that American workers are demanding better workplaces and a voice on the job, and America’s current labor laws simply aren’t designed to help them accomplish that goal.

Still, they said, Bessemer put a spotlight on how stacked the deck is against workers, and that the broad, diverse public support for the union drive showed the US labor movement is gaining more steam than it has in decades.

Amazon, which had aggressively opposed the union effort, undoubtedly won a significant battle this week (pending likely legal challenges from the Retail, Wholesale and Department Store Union). But it may have put a target on its back that could prove costly in what’s likely to be an ongoing war over how companies treat their workers, the experts said.

The fight was never going to be fair

Amazon responded to the vote Friday by saying its “employees made the choice to vote against joining a union” and that it was glad their “collective voices were finally heard.”

But experts said that misrepresents what has happened since November, when Bessemer employees officially asked the NLRB to hold a union election.

“The result reflects the imbalance in current US labor law, rather than any genuine expression of whether workers would like to have more of a voice in their workplace,” Rebecca Givan, an associate labor and employment professor at Rutgers University, told Insider.

“This demonstrates just how hard it is for workers to gain a voice on the job when the employer has unlimited resources, full access to workers all day long, and very few legal constraints on what it can do or say,” she said.

Over the past several decades, American executives and politicians have chipped away at labor laws and workers’ right to organize, experts said. At the same time, companies have kept American workers’ pay and benefits down, and shipped jobs overseas where labor is cheaper – even as workers’ productivity, as well as corporate profits and executive pay, have soared.

In European counties, like France, where labor laws more heavily favor workers, some Amazon employees have been able to successfully unionize. That has paid dividends: in July, Amazon gave its French employees a 1.6% permanent raise following union negotiations.

In Bessemer, workers had a much tougher road to travel.

“Unions lose in 90% of the cases when management opposes the organizing effort,” which Amazon’s management did, Tom Kochan, a professor of management at MIT, told Insider.

That’s depite a surge in pro-union sentiment in the US in recent years. Kochan’s research in 2017 found that around 48% of non-union workers would join one if they had the opportunity, while a Gallup poll from August found that 65% of Americans approve of unions – the highest percentage in nearly 20 years.

But under US labor law, companies have lots of tools at their disposal to try to prevent employees from unionizing, from forcing them to listen to anti-union messaging in “captive-audience” meetings, to having a significant say over which employees are eligible to unionize in the first place. Even when companies violate those laws, the NLRB, which oversees union elections, lacks the power to issue fines, which experts said gives companies little incentive to play fair.

“The most important story is not the fact that the union didn’t win. Rather, it’s that they got as close to winning as they did,” Erin Hatton, an associate professor of sociology at the University of Buffalo whose research focuses on work and labor movements, told Insider.

“Through legal coercion and illegal tactics, employers spend a great deal of money to keep unions out and it usually works. So this outcome isn’t all that surprising. And yet the workers were incredibly successful in so many ways,” she said.

Anti-union tactics in the spotlight

One of those successes, experts said, was bringing attention to Amazon’s industry-standard, but still aggressively anti-union tactics.

“Amazon’s tactics during the campaign and voting process were successful for them but now are being questioned legally and in the public view,” Lynne Vincent, an assistant professor of management at Syracuse University, told Insider.

Even before employees started talking about forming a union, Amazon had hired private detectives known for union busting, spied on workers’ private Facebook groups, and tracked unionization risk with a heat map tool in an effort to thwart organizing efforts before they gained momentum.

Amazon also illegally fired multiple employees last year who organized demonstrations to shed light on what they said were unsafe and grueling working conditions, the NLRB found. Amazon previously said it disagreed with the board’s findings in one case, while the other case is still pending before an NLRB administrative law judge.

Once employees took their union drive public, Amazon enlisted expensive “union avoidance” consultants to help kick its union-busting tactics into overdrive. Amazon pushed its anti-union message through websites, t-shirts, frequent texts to employees, and midnight “education” meetings, which labor experts told Insider were fairly typically in union campaigns like this.

Amazon’s executives and PR team also waged an atypical attack on members of Congress who voiced support for the unions (Amazon later apologized for some of its tweets), and deployed an army of warehouse employees to respond to criticism of the company on social media.

But the company also sought to shape the voting process itself.

The NLRB has allowed mail-in voting in union elections since March 2020 due to the pandemic, but Amazon (twice, unsuccessfully) tried to get the NLRB to hold an in-person election. When that failed, it reportedly pressed the United States Postal Service to install a mailbox outside the Bessemer warehouse.

An Amazon spokesperson previously told Insider that the USPS installed the mailbox “for the convenience of our employees.”

But the Retail, Wholesale and Department Store Union – under which Amazon’s Bessemer employees would have unionized if the vote had passed – accused Amazon of using the mailbox to intimidate workers and plans to file unfair labor practices charges with the NLRB that, if serious enough, could cause the NLRB to throw out the election result.

John Logan, a labor and employment professor at San Francisco State University who specializes in companies’ union avoidance strategies, told Insider that the mailbox’s placement likely gave employees an impression that “Amazon was playing some kind of direct role in monitoring and even perhaps in counting the votes, which clearly creates an atmosphere of pressure and potentially unlawful intimidation.”

Vincent said that companies who use a similar anti-union playbook to Amazon “may see validation in the effectiveness of the tactics,” but that the Bessemer campaign may also cause politicians to reexamine and ultimately outlaw some of those tactics.

What’s next for American workers?

Kochan said the Bessemer union drive was “another clear indication that [US] labor law is broken, perhaps in its current form, beyond repair.”

But many of the experts who spoke to Insider said the massive amount of attention and public support it generated suggest there may finally be an appetite to begin those repairs.

Under the Trump administration, the NLRB “systematically rolled back workers’ rights,” according to an analysis by the left-leaning Economic Policy Institute. President Joe Biden has already signaled he intends to be much more pro-worker than his predecessor, releasing a video in support of unionization efforts and against corporate “anti-union propaganda” – as Amazon employees were voting.

“Given the pro union sentiment in many areas, as well as the clear backing of the current administration, it would still not be surprising to see successful efforts to unionize businesses in other areas, and eventually, even at Amazon itself,” Joseph Seiner, a labor and employment law professor at the University of South Carolina, told Insider.

Lawmakers on both sides of the aisle, from Republican Sen. Marco Rubio to Democratic Rep. Alexandria Ocasio-Cortez, voiced support for the Amazon employees’ push to unionize. The House also passed the Protecting the Right to Organize (PRO) Act, which would make it easier for workers to organize, harder for employers to misclassify workers, and ban certain union-busting tactics – though the bill faces steep odds in the Senate.

Veena Dubal, a law professor at UC Hastings who researches how technology impacts workers’ lives, said that the Bessemer vote may push regulators to look more closely at how giant tech firms like Amazon exert power over workers.

“A lot of regulatory focus has hinged on anti-trust regulation-the need to break up Amazon because of its significant market power-but the truth is, Amazon also exerts monopsony power in labor markets. In areas where Amazon warehouses exist, wages go down, not up,” Dubal said.

The COVID-19 pandemic and racial justice protests following George Floyd’s death last May have also forced Americans to reckon with how race plays a role in the workplace. That became a focus in Bessemer, where the RWDSU estimated that 85% of Amazon’s employees are Black, according to The New York Times.

“The core issue in the campaign was not about specific concessions but worker power. And in this case, it can’t be distinguished from the struggle for racial equity,” Premilla Nadasen, an associate professor of history at Barnard College who researches alternative labor movements, told Insider. “Black people are being disenfranchised electorally and subject to systemic violence. So, the struggle for economic control over matters more.”

“Official union membership figures aside,” she said, “more and more working-class Americans are recognizing the need to have a collective voice.”

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Biden says he seriously considered Bernie Sanders for labor secretary, but couldn’t risk Senate control

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Sen. Bernie Sanders and former Vice President Joe Biden talk before a Democratic presidential primary debate in February 2020.

  • President-elect Joe Biden said on Friday that he strongly considered Sen. Bernie Sanders of Vermont to be his labor secretary, but both men decided against the move after the dual Georgia runoff election wins gave Democrats control of the upper chamber.
  • “I did give serious consideration on nominating my friend Bernie Sanders to this position,” Biden said. “I’m confident he could have done a fantastic job. I can think of no more passionate, devoted ally to working people in this country.”
  • Biden ultimately tapped Boston Mayor Marty Walsh, a close ally with strong ties to unions, to become his labor secretary.
  • Visit Business Insider’s homepage for more stories.

President-elect Joe Biden said on Friday that he strongly considered Sen. Bernie Sanders of Vermont to be his labor secretary, but both men decided against the move after Democrats captured both US Senate seats in the Georgia runoff elections, giving the party control of the upper chamber.

Sanders, who was the last major candidate against Biden in the 2020 Democratic presidential primary campaign, was a key surrogate for the president-elect in the run up to the November election.

“I did give serious consideration on nominating my friend Bernie Sanders to this position,” Biden told reporters in Wilmington, Delaware. “I’m confident he could have done a fantastic job. I can think of no more passionate, devoted ally to working people in this country.”

He added: “But after Tuesday’s results in Georgia, giving Democratic control to the United States Senate and a tie vote, Bernie and I agreed – and as a matter of fact Bernie said – we can’t put control of the Senate at risk on the outcome of a special election in Vermont.”

Sanders is slated to lead the Senate Budget Committee in the 117th Congress.

Vermont has a Republican governor, Phil Scott, who was first elected in 2016 and reelected in 2018 and 2020. If Sanders had vacated his seat, it would have triggered a special election.

Read more: President-elect Biden expressed confidence his inauguration will be safe. A few hours later, Twitter warned there’s talk of another DC Capitol attack on January 17th.

Democrats Raphael Warnock and Jon Ossoff defeated GOP Sens. Kelly Loeffler and David Perdue in the Georgia elections, respectively. After both men are seated, the Senate will be split 50-50, with Democrats controlling the chamber due to Vice President-elect Kamala Harris’s tiebreaking vote.

Biden ultimately tapped Boston Mayor Marty Walsh, a close ally with strong ties to unions, to become his labor secretary.

“This is one of the most important departments to me,” Biden said on Friday. “I trust Mayor Walsh and I’m honored he accepted.”

The president-elect stated that he and Sanders would “work together, travel the country together” to meet “with working men and women who feel forgotten and left behind in this economy.” 

He added: “We agreed that we will work closely on our shared agenda of increasing worker power and to protect the dignity of work for all working people.”

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Joe Biden can help remake the Federal Reserve so that it actually helps America’s workers

joe biden
President-elect Joe Biden

  • The Federal Reserve is finally starting to take the concerns of average workers more seriously in its monetary policymaking.
  • In order to cement this commitment to workers and full employment, President-elect Joe Biden should nominate Fed Board members with a background in organized labor.
  • There have been a vanishingly small number of labor leaders at the Fed over its long history, this needs to change.
  • Kaleb Nygaard is a graduate student at Yale’s School of Management studying Systemic Risk. He is the Editor in Chief of the central banking education website Centralverse and the host of The Bankster Podcast.
  • This is an opinion column. The thoughts expressed are those of the author.
  • Visit Business Insider’s homepage for more stories.

It’s time for someone to truly represent the voice of workers at the Federal Reserve.

The health and economic one-two-punch of COVID-19 has had a particularly devastating effect on working-class families. It has also made it clear that policymakers need to focus their efforts on helping those families. 

Despite this, not a single person with a background in organized labor has had a vote on the Federal Reserve’s all-important Open Markets Committee (FOMC), past or present. Since it was formalized in the 1930s Banking Acts, there have been 179 people who have served on the committee. 

Adding someone with a background in labor to the leadership of the Fed would help ensure these working-class families have representation at the most important macroeconomic decision-making-table in the country. 

To repeat, not a single one has had a background in Labor. 

In January, President Biden should change that.

A seat at the table and a voice at the Fed

There are two types of participants on the FOMC: seven Governors who work from the Fed office in Washington DC and 12 Presidents who head the Reserve Banks spread across the country. How they are chosen and who does the choosing is very different for the two types. 

The seven Governors are nominated by the US President and confirmed by the Senate in the same fashion that Cabinet Secretaries or Supreme Court Justices are chosen. 

By law, the Governors are supposed to consist of “a fair representation of the financial, agricultural, industrial, and commercial interests, and geographical divisions of the country”. 

One of the seven seats sits empty at the moment. On day one, President Biden should nominate someone with a background in labor to fill the seat, and whichever party controls the Senate should confirm the nominee. 

The selection process for the 12 Presidents is more complicated. Each Reserve Bank is overseen by a nine-member Board of Directors. Three are bankers, elected by banks in the area. Three are non-bankers, elected by banks in the area. And three are non-bankers, appointed by the seven Governors in Washington DC. The six non-bankers are the ones responsible for choosing the Reserve Bank President. 

By law, the non-banker-directors are supposed to consist of “the interests of agriculture, commerce, industry, services, labor, and consumers.” So although the process is more complicated and less democratic for the selection process of the Reserve Bank Presidents, the legal foundation upon which it sits explicitly includes Labor representation.

In the full 106-year history of the Fed, only 45 representatives of labor have been on the Board of Directors of the 12 Reserve Banks. 

Chart 1

And when you look at it as a percentage of the non-banker directors, the lack of labor representation is even more paltry.

Chart 2

Less than 20% of the labor representatives were elected by banks. The remaining 80% plus were appointed by the Governors in Washington DC. The total per district also varies greatly. The Federal Reserve Bank of New York has had the most with nine, and the Federal Reserve Bank of Atlanta has not had a single one. 

Chart 3

In August, the Fed announced the conclusion of their first-ever-public framework review. There were many changes made because of the review, but the overall thrust of the changes was to give greater attention to improving the employment situation of average Americans, with the greatest impact of the changes going to working-class families. 

This focus on the labor market and working families even showed up in 2019, when the Fed made a sharp turnaround and reversed the interest rate increases they had made in the previous few years. They admitted they’d missed the mark on full employment. As Chairman Jay Powell said at the time: “We really have learned that the economy can sustain much lower unemployment than we originally thought without troubling levels of inflation”.

To confirm the spirit of both the Fed’s 2019 admission of misreading the employment situation and the 2020 policy changes, President Biden should nominate someone with a background in labor to fill the empty Governor seat. Going forward, this would ensure that the voices of the tens of millions of working-class families who are struggling through the effects of the pandemic, are heard in the decision-making room of our country’s central bank.

For the same reasons, the Reserve Bank Board of Directors should consider candidates with a background in Labor for future Reserve Bank President positions. 

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