The Consumer Movement and the Labor Movement

The Consumer Movement and the Labor MovementAuthor(s): Clinton L. WarneSource: Journal of Economic Issues, Vol. 7, No. 2 (Jun., 1973), pp. 307-316Published by: Association for Evolutionary EconomicsStable URL: http://www.jstor.org/stable/4224231 .

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J W JOURNAL OF ECONOMIC ISSUES Vol. VII No. 2 June 1973

The Consumer Movement and the Labor Movement

Clinton L. Warne

After a slow and somewhat unconvincing growth during the 1930s and 1940s, the consumer movement has come tardily into its own during the last two decades. Both here and abroad, a host of consumer organizations have sprung up. Some are concerned with price inflation, some with product testing, some with consumer protection through local and state political undertakings, some with grievance handling, some with product safety, some with consumer education, some with cooperative and credit union enterprises, and some with environmental issues.

Seeking to coordinate these many diverse groups is a national "umbrella" organization, The Consumer Federation of America (CFA) with headquarters in Washington, D.C. The aggregate membership of all the 200 affiliated consumer groups is estimated by CFA to be 35 million, a figure which undoubtedly includes a bit of double counting. Yet, even allowing for over-exuberance of the leadership, it now may be affirmed that the apathy prevalent among consumers a few years ago has given way to a vital concern about automobile safety, pollution and its impact on the environment, truth in lending, drug pricing, generic drug names, no-fault automobile insurance and insurance cancellation, food packaging, and chemical additives and preservatives. Consumer pressures are brought to bear on food pricing,

The author is Professor of Economics, Cleveland State University, Cleveland, Ohio. This article was presented at the Annual Meeting of the Association for Evolutionary Economics, Toronto, Canada, 27-29 December 1972.

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the cost of medical care, the cost of power, the pollution of power plants, and consumer protection for the poor and the aged-the invisible men of our economic system. Consumers also are now raising questions concerning the authentication of advertising claims, the safety of children's toys, the practices of moving companies, and the labeling of hot dogs.

The CFA Program

The national program of The Consumer Federation of America, formulated in early 1972, contains the following highlights.

First, CFA characterizes as a failure the administration's wage-price policy since it does not impede the administered pricing policies of large concentrated corporations and does not set aside government support devices for maintaining artificially high and noncompetitive prices. Moreover, consumers are systematically excluded from the decision-making process.

Second, CFA advocates ceilings for corporate profits and dividends. The rolling back of high interest rates and the vigorous enforcement of antitrust laws also are demanded. The organization advocates the imposition of quality controls to secure effective compliance with its pricing ceiling policies.

Third, CFA asks for a strongly viable public broadcasting system for the fulfillment of the potential of cable television. It demands that the public have access to the broadcast media to present coun- terarguments when commercial advertising raises controversial issues such as matters of environmental protection or nutritional claims.

Fourth, CFA favors the enactment of legislation requiring consumer education from kindergarten through the twelfth grade. It urges consumers to set up independent cooperative efforts. It pledges the assistance of its affiliates to keep check on prices and quality in local markets and to disseminate the findings. It urges the use of credit to take care of the backlog of desperately needed housing, schools, hospitals, national resources development, transportation, and pollution abatement. It asks for the elimination of urban blight by the imposition of high construction and maintenance standards. It contends that interest rates are pricing the ordinary citizen out of the home buying market. It asks for a new national policy on fuels and energy to secure adequate energy supply at reasonable prices which also will ensure effective protection of the environment.

Fifth, on the marketing front, CFA demands open dating, unit pricing, standardized packaging within product lines, nutrient labeling, and mandatory ABC grading of foods. It urges an independent agency



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to administer all inspection, grading, and consumer protective programs for foods. It champions group health practice and group health programs. It urges the generic labeling of drugs and the repeal of laws limiting drug price posting. It calls for the elimination of discrimination against the low income consumer in the marketplace and urges that a special effort be made to organize low income consumers to secure the redress of their many grievances.

Sixth, the CFA's program also stresses the development of safety programs for highways and the adoption of compulsory no-fault insurance. It characterizes the quality of the environment as constitu- ting a grave national crisis and demands that industry take full responsibility for the environmental impact of its products.

In summary, the CFA in recognition of the diversity of its affiliates has formulated a far-ranging program, a program that includes the endorsement of an independent consumer protective agency, of class action suits, and of federal legislation to help create independent consumer groups. The CFA program exemplifies the rapid expansion of the agenda of the consumer movement, which includes such diverse items as unit pricing, nutrient labeling, the revision of building codes, the development of a balanced transportation system, and environmental protection. No longer are consumers content to remain quiet. For a long time it was popular to suggest that, since all are consumers, the idea of consumer organization is but a utopian myth. Today's focus is to shield the interest of the householder as consumer-as a purchaser of goods and services. Those allied in this quest may, for example, be drawn from many occupations, from many producer groups. They join as consumers when angered by the injustices developed in our system.

Structure of the Consumer Movement

The consumer movement today possesses a most untidy structure, reflecting the diversity of those participating in it. Affiliated with the CFA are 73 regional electrical co-op organizations and some 14 national cooperative and credit union endeavors, including the Cooper- ative League of the U.S.A., the Credit Union National Association, and the Group Health Association of America. It has the support of old-line cooperatives now expanding not only in food but also generally in housing, insurance, and farm supplies. It also includes the credit unions, many of which identify with the new consumerism. There are student co-ops, drawn into the movement as an ethical substitute for private business. The cooperatives differ greatly both in program and orientation. Co-op members are prone to develop



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a powerful allegiance to the co-op, particularly in rural areas. Such organizations seldom have been social innovators on the legislative front. They have, nonetheless, as an institutional group, joined in the consumer movement because of their eagerness to advance consumer sovereignty in the marketplace. Probably the leaders in the movement substantially outpace their followers in giving voice to consumer programs.

A second powerful force in the present-day consumer movement is the testing organization, Consumers Union of the United States, which has developed as essentially a middle class movement oriented to the needs of individuals eager to benefit from comparative ratings of products. Here the individual member is seeking information to enhance his effective buying power. CU members exert a substantial influence on the marketplace, both by channeling demand toward quality service and competitive pricing as well as by exercising psychological leadership which tends to induce others to "follow the leader." With more than two million subscribers receiving the monthly Consumer Reports, this organization constitutes a powerful force. CU historically has acted as a catalyst of the consumer movement: It brought into being in the 1950s the American Council on Consumer Interests; it has supported state and local consumer organizations; it has opened up governmental consumer testing to the public through a law suit which compelled the National Bureau of Standards to release hearing aid tests. It is now seeking to stop governmental restraints on oil imports and agreements to limit importation of steel, and has taken an active part in the CFA as well as in lending stimulus to consumer educational and research efforts.

A third major group in the consumer movement of today-a group dramatized by Ralph Nader-is that of the consumer advocates, the volunteers who have established state and local consumer interest groups. These groups normally have coalesced to attain certain political objectives. There has been, indeed, a long history of efforts to form grass roots consumer organizations. Such efforts have been particularly effective in wartime periods of rising prices.

There are, in all, some 48 state and local consumer groups affiliated with CFA. Affiliates have been formed in most of the highly industri- alized states. Typically, these organizations are manned by volunteers, although some with more adequate financing have a salaried staff. Most of the independent public action research groups, stimulated by Ralph Nader, have followed their own quite independent existence, preferring this to direct identification with the consumer "establishment." They have, however, done useful work in support of many consumer objectives.




Aiding and abetting these specific types of consumer groups are many general purpose organizations eager and willing to lend a hand in advancing consumer programs on various fronts-health, safety, nutrition, air pollution, unit pricing, product warranties, and advertising clarification, to name only a few. The United States has, uniquely among nations, a number of general purpose organizations representing youth, the aged, and ethnic groups. The consumer movement has benefited from a host of middle class individuals eager to make common cause with others on issues which have become irksome and which seem to imperil family life. The following are some of the affiliates on the CFA list: American Association of Retired Persons; National Retired Teachers Association; B'nai B'rith Women; Continental Asso- ciation of Funeral Societies; Kansas Home Economics Association; National Association of Retired Federal Employees; National Board of YWCA; National Council of Senior Citizens; National Farmers Union; and National Grange.

Labor's Participation

To this already wide-ranging roster of interested groups eager to establish common honesty in the marketplace has been added the force of a substantial contingent of organized labor. While our older unions initially may have been constructed on Selig Perlman's job consciousness, they also entered and explored terrain which went far beyond this perimeter. The crusade against sweat shop labor in the garment trades at the turn of the century had job overtones. It, however, also struck a chord with the middle class women in the crusades of the National Consumers League, both because of ethics and sanitation. Historically, labor lent its weight in the fight for food and drug legislation as well as for decent working conditions in the factory.

Another facet of labor's participation in the consumer movement has been in the establishment of consumer cooperatives. Here the promise frequently has exceeded the reality. Repeatedly throughout its history, the labor movement has endorsed cooperatives, encouraging its members to invest in such enterprises to "eliminate the middle man" and thus raise real wages. Numerous cooperative enterprises have been launched by union groups ranging from miners to railwaymen to auto workers. Very few such efforts have succeeded, possibly because the Rochdale principles could not effectively compete with the chain store merchandising of groceries. Despite such setbacks, labor's interest in cooperatives has continued and has taken new forms. The Amalgamated Clothing Workers Union has sponsored a most substantial development of cooperative housing fortified by govern-



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ment assistance. Some satellite stores have grown up in the apartment complexes. Cooperative insurance and cooperative credit unions also have developed through union initiative. Some cooperative health care organizations and even a number of labor-sponsored cooperative discount ventures have been established. The labor movement has by no means abandoned its aspirations for cooperative enterprise.

Labor also has invested both time and money in local consumer organizations. An interesting and possibly typical instance of this is seen in the history of labor support for the Consumers' League of Ohio. This organization, at one time or another, has received contributions from 244 different local or union councils. In 1942 seven union locals made contributions, and from the end of the World War II inflation period, when thirteen more unions had become members of Consumers' League, until 1953, support remained static. However, when the league became involved in the minimum wage controversy in Ohio, a large number of unions joined for the first time: Beginning in 1953, new memberships accrued for a total of 84 unions participating by 1957. During this time, Consumers' League published an informa- tional brochure detailing Ohio labor laws, and a membership recruiting board was formed that actively sought union support. Once again in 1960, Consumers' League of Ohio became a rallying organization in the right-to-work issue, and 47 union locals or councils joined for the first time. In the election years of 1962 and 1966 union support also was strong.

It would seem clear, then, that the peaks of union support reflect concern for inflation problems in the economy, interest in legislation which would affect union workers, and encouragement to support the interested consumer organization.

Financial support of the Ohio league from union organizations has fluctuated widely. The first peak in monetary support from unions came in 1956 and was repeated in 1957, when over $1,000 was contributed annually. Although the total memberships dropped in 1963 and 1964, the size of individual organizational contributions increased markedly. At the present time, Consumers' League of Ohio boasts 30 union members and receives contributions totalling over $2,000 annually, so that union support continues to remain a viable element in the budget.

The labor movement has not limited its efforts to embarking on cooperative enterprises and supporting local consumer organizations; it also has proven to be an important consumer ally on the legislative front. This support has been especially strong when wage freezes have made it abundantly clear that labor gains are dependent upon




the maintenance of price stability. It is no accident that substantial segments of organized labor now have joined groups in The Consumer Federation of America and that labor has taken an active role in efforts to enact consumer legislation.

In the last two years, the following union organizations have affiliated with the CFA: Amalgamated Clothing Workers; Amalgamated Meat Cutters; State, County and Municipal Employees; California Labor Federation; Colorado Labor Council; Communications Workers of America; Industrial Union Department, AFL-CIO; Marine and Ship- building; Machinists; Ladies Garment Workers; Brewery Workers; Electrical Workers; Los Angeles Federation of Labor; Louisiana AFL-CIO; Maryland State and C.C. AFL-CIO; Missouri State Labor Council; Oil, Chemical and Atomic Workers; Retail Clerks; Transport Workers; United Auto Workers; United Furniture Workers; United Steelworkers; Upholsterers; Washington State Labor Council; West Virginia Labor Federation; Service Employees; Teachers; and Con- necticut State Labor Council.

Yet labor has split its basic allegiance. The union label trades have long accented the buying of union made articles to protect union jobs. The newer mass production unions have been less prone to assume restrictive attitudes and a narrow job consciousness. In the first blush of unionized assembly lines there was little union fear of overseas competition and little concern over craft displacement. The honeymoon of large industrial unionism and mass production employers, however, came slowly to a halt with the advent of multinational corporations and development of foreign subsidiaries during the 1950s and 1960s.

Initially, foreign investment was aimed at the recovery of war- devastated nations. U.S. presence abroad was acceptable so long as it did not spill over into competition in U.S. markets. In time, however, exports from new and efficient plants in both Asia and Europe came to be earmarked not exclusively for foreign markets but for the United States and entered into competition with those produced by U.S. labor. At this point labor's tolerance of unfettered foreign trade began to fade. Those in mass production industries were to take a leaf from the craft groups which earlier had expressed concern about international commerce impinging on domestic employ- ment-the classic case of the flint glassworkers, the potters, the watchmakers, the glovers. Increasingly, segments of labor were to contend that the U.S. market belonged to U.S. labor and that a sharp check should be placed on foreign imports as injurious to those in such diverse fields as garments, electrical equipment, and steel.



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This new thrust was to strain the alliance which had been built between the trade union movement and the consumer movement, for CFA has been accenting the mutuality of benefits to be attained through the abolition of tariff quotas in international trade. Historically, consumer groups have taken a free trade position, contending that the importation of goods must, in the long run, be offset by the exportation of other products so that all nations, rich and poor, gain from international trade. This traditional argument appears increasingly unconvincing to garment workers displaced by Hong Kong made-to- order suits. Similarly, the textile workers are finding their markets pre-empted by Japanese imports, and steel workers' jobs also are being eliminated by imports. As unionists of today state, the Burke- Hardke bill is a means of stopping the export of 900,000 jobs-a "must" on the agenda of labor.

Hopefully it seems highly unlikely that friction on this single point will disrupt the CFA; there are too many issues of common concern. In the long run, labor undoubtedly will increase rather than decrease its cooperation with the consumer movement as its members come to share in the higher living standards made possible by new consumer legislation.

The Future

At the moment, consumerism is backed by a favoring wind. In 1972 alone, the following consumer laws were enacted: Consumer Product Safety Act; Motor Vehicle Information & Cost Savings Act; Omnibus Education Amendments; Pesticide Control Act; Drug Listing Act; and Federal Water Pollution Control Act Extension. The next real test will be the fate of the consumer legislative agenda for 1973. If a consumer ombudsman is appointed and given a substantial appropriation, the consumer movement will gain marked prestige. If the Product Safety Act is well enforced, organized consumers decidedly will benefit.

In other areas, if extension workers move into urban centers on a large scale to spread consumer education and organization, the dimensions of the movement will advance. If poverty programs are given a consumer accent, the heavy financial burden posed by product ignorance will lessen. If advertising can stop its eternal chattering on the superlative qualities of mouthwashes and develop some reasonable approximation of the truth (together with a guarantee to supply on request the technical data behind the claim), then greater consumer welfare will ensue.

When the 1973 consumer program is drawn up by the CFA, the




agenda undoubtedly will be much longer. The nation has by no means resolved the problems of safety, of weights and measures, of additives and preservatives in food, of natural resources, and of pollution. It has not eliminated fraud or monopoly from the marketplace. The essence of the consumer movement is intervention on a pragmatic basis in the operation of the economy to rectify the imbalance brought on by the rise of great corporations and by their price policies, credit policies, and brand name advertising.

The consumer cause has posed itself as a common cause which will unite rural dwellers, the elderly, the young, the unionist, the consumer activist. It is a movement with many facets which has taken an ever more aggressive posture. Many consumers have observed the danger lurking in unfettered laissez-faire. Voluntarism has not erased unsafe toys and tires from the marketplace. Fraudulent advertising has not been remedied by business inspired codes. In the absence of strong and well-enforced legislation, little progress has been made in handling consumer grievances or in making sense of product warranties. Accurate weights and measures have not yet been assured. Standards and grade labels indicating safety and performance charac- teristics of products in the market are not yet commonplace. Impartial testing services, publishing results by brand name, have not yet reached more than a minor fraction of our population.

Within the last decade, the consumer interest has changed from its status as a force so amorphous that effective organization was impossible. Today the consumer movement has awakened and spread its organizational effort with amazing rapidity across the nation. State and local consumer groups have been formed. Consumer testing organizations have had an unprecedented expansion. Consumer col- umnists have emerged in newspapers and magazines. Governmental agencies have proliferated and are assisting low income consumers in handling complaints. Standards of safety and efficacy have been established for a host of products. Consumer educational efforts have expanded in schools and colleges, and the Federal Trade Commission has been galvanized into action. A new maze of consumer agencies has come to be attached to offices of attorneys general, of governors, and even to the White House. With a very considerable assist from Ralph Nader and his network of legal organizations, we are daily reminded of the proclivity of requlatory agencies to be captured by those who are to be regulated and the tendency of bureaucracies to be attentive only to those with political clout. This is at least a beginning.

Organized consumers are now being heard on the local, state, and



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national levels, if only because of political expediency. Governmental officials are meeting the pressures of low income workers by liberalized appropriations for complaint centers and are responding to those increasingly concerned with the safety of tires, toys, automobiles, food, and drugs. Consumers have gained political results, and with each victory new avenues of consumer concern are opened up.

Labor's past attitude toward the whole consumer movement has not always been enthusiastic. Its endorsement often has been nominal and considered as a "good and welfare" effort to be taken up in inflationary periods and later abandoned. Labor has been so preoccupied with finding its own place in the sun that consumerism sometimes has been deemed extraneous. The new visibility of the consumer movement, however, has given it a new importance to labor, and labor support should continue to be forthcoming if the drive to protect consumer interests maintains its present thrust.



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The Consumer Movement and the Labor Movement