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The future of the labor market and the economy: A conversation with Dan Graff

Daniel Graff, director of the University of Notre Dame’s Higgins Labor Program, and expert on contemporary labor issues, labor and economic history, and issues related to gender, race and labor, explores the resurgence of unionization efforts, the future of the U.S. labor market and its impact on the economy.

Daniel Graff is director of the University of Notre Dame’s Higgins Labor Program and holds a joint appointment in the Department of History. He is an expert on contemporary labor issues, labor and economic history, and issues related to gender, race and labor. Here, he explores the resurgence of unionization efforts, the future of the U.S. labor market and its impact on the economy.

How has the labor market been changing recently — and what do you see next?

We’ve had a really chaotic couple of years, starting with COVID and the lockdowns, then followed by an abrupt change from high unemployment because of that to very low unemployment and worker shortages. So, it’s been a whipsawing situation in the labor markets over the last couple of years in ways that I think economists and policymakers are trying to figure out.

One of the developments I’ve been really interested in pursuing is that there’s a higher level of  worker activism, in terms of workers organizing, unions attempting to come together to get a voice at work — more than we’ve seen in the last decade or two. So, it’s been really interesting to see a growth in interest in the labor movement after the decline of unions in the United States for the last 40 years or so. 

It’s especially interesting the sectors that were seeing that in. We’ve had this narrative in the U.S. that the decline of organized labor, which was so strong in the 1940s, ’50s and ’60s, was an automatic consequence of the decline in manufacturing as we shifted to a more service-based economy.

The story was always more complicated than that, though. There’s no rule of economics that unions only work in certain sectors and don’t in others. And it’s been really interesting to see that baristas at Starbucks, clerks at Home Depot and Trader Joe’s, lots of folks working in journalism and in the digital economy, video gamers — there’s been a lot of interest in unionizing to try to improve wages and working conditions in those sectors.

What will it take for those unionization efforts to be successful?

Since 1935 in the United States, workers in the private sector have had the right to form unions and the legal protection to do so. But, for the last 30 to 40 years, that legal right has been less and less enforced. And it’s been harder for workers who do want to unionize to do so.

Employers have a lot of tools at their disposal, and there’s been a rise of what’s called the “union avoidance industry” of law firms. Unions are so small and the delays in going through the court system are so long that, frankly, it’s almost impossible to organize a union and secure a collective bargaining contract with an employer in the U.S. today if that employer doesn’t want that to happen.

Through legal and sometimes extralegal means, employers usually will fight unionization. And now we see workers are organizing unions and the federal government is recognizing cases that, OK, workers have voted to unionize, but whether they’ll get to a first contract and the employers will respect that and move forward to a collective bargaining relationship is unclear. Starbucks and Amazon are two examples of major American companies that have been faced with unionization efforts over the last couple of years, and they’re both fighting tooth and nail to prevent the unions from taking hold.

I think in over 200 Starbucks locations, workers have unionized, meaning that a majority of the workers at those locations have voted to be represented by a union and recognized as such by the federal government. Last I saw, only four of those 200 are situations where Starbucks has even sat down with the local group of workers and started to talk about bargaining a contract. There have not yet been any contracts. So, there’s nothing under American labor law, unlike many other countries, that requires unionization of workers to then produce a contract that both sides have to recognize.

What would make employees’ bargaining positions stronger?

There are some laws proposed in Congress that would reform the law to require employers and unions to negotiate first contracts. And once that happens, that sort of normalizes the collective bargaining relationship and makes a union presence far more stable and secure. But Congress is having trouble passing any kind of legislation due to a polarizing gridlock right now. So a lot of the things that would make unionization an easier path in this economy have not been put into law at this point.

A lot of young people in particular are really more interested in unions than they have been. Public polls are showing that the American public has the highest level of support for unions than they have since the mid-1960s, which is pretty telling.

What do workers want from these efforts?

They want wage hikes. They want a bigger piece of the pie. Lots of companies are really enjoying high profits right now, so they want a bigger share of that. But just as important, they want a voice at work where they can then negotiate over what the standard hours are going to be. Will I be able to predict my schedule? What about the benefits, whether it has health care? 

You know, Starbucks in the service sector is an employer that provides better benefits than many others. But the workers who are unionizing want to have a voice in securing that and making sure they have a role in shaping what those benefit packages are.

How are current economic conditions — including inflation — related to the labor market issues we’re seeing?

As a historian, I’m interested in the ways in which prior generations of Americans have looked at what tools we need to make an economy that works for everyone or generates more widely shared prosperity. Inflation is a real issue right now, and inflation always hurts working people the most. When prices rise, workers don’t have that cushion to fall back on.

My take on inflation is that the United States has operated since the 1950s on this assumption that the only way to deal with inflation is to let the Federal Reserve raise interest rates in an attempt to slow the economy. Slowing the economy might end up eventually, the hope is, curbing inflation, but it also is designed to dampen economic enthusiasm, slow down hiring, flatten wages. 

So the problem, as I see it, is if we’re going to try to tackle inflation by going after workers’ wages — which have largely been flat for decades — that’s not the right way to go about it.

We need to reimagine the tools in our toolkit and think about other ways to deal with the inflation problem. If we see workers’ rising wages as a problem for inflation, workers will never be able to get ahead and we’ll never have workers taking home more and converting profits into wages like we used to see more in the 1950s and ’60s.

We need to refigure our economy so that workers have more bargaining power. Unions are one solution to that, where unions can convert some profits into more wages. But I think the federal government and policymakers need to think as well about the costs that working people, and all of us really, bear that have really been rising — like education costs and housing costs over the last several decades.

How are political parties responding to this new interest in unionization?

You could argue that neither Republicans nor Democrats since the Reagan era of the 1980s have been strong friends of the union movement. While the Democratic Party is long associated with the labor movement, ever since Franklin Roosevelt’s New Deal in the 1930s, unions took a beating in the 1980s. During that era of deindustrialization, high inflation and high unemployment, many in both parties saw the high wages of union members as a problem that needed fixing.

But the Democratic Party has moved over the last eight to 10 years to once again see the value in unions due to stagnant wages and the erosion of the traditional employment contract. A lot of Democrats have been giving that a second look. So it’s interesting from the Obama administration a decade ago to the Biden administration, I think the party is now trying to more fully support unions, and they’re seeing that workers are interested in them.

What’s causing this renewed interest in unionization now?

I think that, in part, the upsurge we’ve seen in worker activism comes out of the pandemic moment. This wide gulf between the rhetoric praising people who work and essential workers, the gap between that rhetoric, that gratitude that the entire country expressed and the reality of the crappiness of so many jobs today that were deemed essential during the pandemic — I think that that caused a lot of people to ask, you know, what am I doing here if I’m so important? Don’t I deserve more, whether that’s pay or security at the workplace or the opportunity to rise? 

So, it’s not simply that unionization is a sign that something is wrong. Often, we think that if a group of workers wants to unionize that means that the management is doing something poorly. That’s one way to look at it. But I think there was also some hope and optimism born from the pandemic that’s fueling this as well. So, I view this worker activism, whether it’s the great resignation and people pulling out of the labor market, people refusing to work at  lowly paid jobs or people jumping to other jobs that offer a better deal — these are all signs that we need some change here. And they have negative and positive roots, I think.

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