Unions Organize Around Economic Development

Unions Organize Around Economic Development

WorkingUSA—Winter 2001–2002 9

WorkingUSA, vol. 5, no. 3, Winter 2001–2002, pp. 9–16.© 2002 M.E. Sharpe, Inc. All rights reserved.ISSN 1089–7011 / 2002 $9.50 + 0.00.

DAVID REYNOLDS is the author of Taking the High Road: Communities Organize for Eco-nomic Change, forthcoming from M.E. Sharpe.

FROM THE EDITOR

Unions Organize AroundEconomic Development

THIS issue focuses on what is a new but emerging topic ofunion activism: economic development. Traditionally,local and state economic development policy has been

the preserve of politicians, civil servants, and businesses. Al-though World War II had seen organized labor seeking a directrole in economic planning, the terms of the postwar labor-man-agement accord steered union influence on economic decisionsinto two more indirect paths. On the one hand, through the bar-gaining table, labor could set the basic terms of wages, benefits,and job conditions. Where union density was strong enough,the terms of collective bargaining could steer the behavior forentire industries. On the other hand, through the ballot box andlobbying, labor sought to expand the New Deal. Through basicwage, working, and safety net measures, organized labor pushedthe public standards within which business had to operate. Thesetwin thrusts, however, left a broad middle ground of public andprivate development policy outside the realms of union action.Business investment decisions, public business subsidies, land-use policy, public training institutions—these were left in thehands of government and business leaders. The lack of strongunion involvement in economic development decisions repre-

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10 WorkingUSA—Winter 2001–2002

sented a kind of public-policy version of the workplacemanagement’s rights clause. Labor could work for and win gainsin basic living standards as long as business made the core eco-nomic decisions.

The deal worked fine as long as economic expansion allowedfor management to deliver steady union bargaining gains and forpolitical leaders to enact significant, although not unproblematic,expansions of the New Deal. The shift to supply-side economicsand corporate restructuring in the 1980s and 1990s broke the deal,however. The results are familiar: wage and benefit concessions,downsizing, plant relocation, urban decay, social spending cuts,deregulation, and the growth of the professional union-bustingindustry. Faced with a wholesale change of the rules, organizedlabor has found collective bargaining and traditional politicalaction alone inadequate to counter the corporate agenda.

To fully affect the economic decisions that shape today’s fu-ture, unions must pull the levers of economic development thatare intimately connected to the corporate restructuring agenda.As we will see in this issue, many of the antilabor business strat-egies pursued today tap into generous sums of public money,rely on relaxed public standards, and physically build aroundunsustainable public land-use practices. At the same time, morelabor-friendly business strategies receive scant public policy at-tention or support. In other words, while corporate spokespeopledeclare the wonders of the unfettered “free market” and the endof “big government,” in reality the dominant corporate agendarelies on extensive government involvement to subsidize andbolster corporate behavior. Yet, because economic developmentis ultimately an issue of public policy, labor has an opportunityto mobilize public sentiment to redirect key levers over corpo-rate practice. Indeed, as we will see, as unions organize aroundnew and higher public standards, as they break into the nation’sworkforce-development programs, as they join with efforts to



promote smart growth, they not only gain access to importantlevers of power, they also link up with a wide range of grass-roots allies. Indeed, economic development policy provides anatural arena within which labor, community, faith-based, envi-ronmental, low-income, and other groups can forge a new andbold vision of a better economy built around economic justiceand sustainable practices.

This issue starts by examining one of the most visible signs ofemerging coalitions between labor and community. Jen Kern andI explore the lessons learned from union involvement in themushrooming living-wage movement. In just six years, living-wage campaigns have grown from a new experiment to an ever-growing network of coalitions throughout the nation. Withsixty-eight victories and even more campaigns currently underway, living-wage activism shows no signs of peaking. While theactual laws represent a very specific policy reform, the living-wage movement reveals the strong interest that a wide range ofgrass-roots groups have in redirecting fundamental economicpolicy. The authors explore the gains that organized labor hasmade in forging local coalitions as well as the limitations on unioninvolvement.

By attaching wage and other standards to employers that re-ceive public funds, living-wage activism links two central di-mensions of public policy: the use of public funds to promotebusiness investment and the setting of public standards. The nexttwo articles deal with each dimension in turn. In Minnesota, ErikPeterson analyzes the interaction between local living-wage or-ganizing and one of the nation’s premier state-level corporate-subsidy accountability efforts. Over the past twenty years, taxabatements and other forms of “corporate welfare” haveemerged as the dominant strategy for local and state economicdevelopment policy. A growing body of evidence suggests thatthe public typically gets very little in return for its investment.

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Indeed, thanks to the reporting provisions adopted in Minne-sota and Maine, researchers have been able to document howpublic subsidies have been used by companies to lower workstandards, close workplaces, and promote sprawl. At the sametime, the promised jobs rarely materialize. As the negative evi-dence mounts, efforts to reform subsidy policies have grownacross the country. Along with Maine, Minnesota has been a flag-ship for this watchdog corporate-subsidy movement. Petersonshows how the success around subsidy policies grew out of thecombination of grass-roots living-wage activism and an innova-tive statewide coalition, the Minnesota Alliance for ProgressiveAction.

Ellen Kahler’s piece on Vermont’s Livable Wage Campaignprovides a showcase example of efforts to raise public standards.For the past two decades, corporate restructuring has been builtaround the erosion of public standards—be they for health andsafety, environmental protection, wages and benefits, or unionprotections. The sharp decline in the purchasing power of theminimum wage hits at public policy for which the labor move-ment has traditionally fought. As the living-wage movement haspublicized, a minimum bare-bones income should be in the rangeof $8–$9 an hour, not the $5.15 that remains the national stan-dard since September 1997. Just as state level victories histori-cally preceded the enactment of the federal minimum wage,today a growing number of labor-community coalitions havesought to use state policy to begin to raise the standards. In 1996,California voters, for example, approved an across-the-boardminimum wage increase to $5.75 an hour. That same year, Or-egon voters raised their state’s minimum wage to $6.50 by 1999.Two years later Washington voters passed a labor-communitymeasure that combined $6.50 an hour with automatic increaseswith the rate of inflation. The living-wage activism in the greaterBoston area has produced a legislative alliance between ACORN



and the Massachusetts AFL-CIO that secured an increase in thestate’s minimum wage to $6.75 an hour. The groups are nowreturning to the legislature to win an indexing provision.

The Vermont Livable Wage Campaign also won an increase inthe state’s minimum wage. However, from the beginning, thisgoal was only one part of a multipronged effort to making liv-able-wage jobs a central issue of public-policy debates. The cam-paign has combined state legislative action with a range ofgrass-roots policy and labor solidarity efforts. As Kahler explains,the campaign used a distinct strategy of first securing public ac-knowledgment of the “job gap” problem before advancing pro-gressive ideas for policy change. The campaign has also combinedbasic economic justice demands with an extensive agenda to reachout with aid to small businesses—thus deflating traditional cor-porate opposition cries of labor versus the family business.

While corporate restructuring has funneled public resourcesinto private hands and sought to slash public standards, it hasalso neglected effective workforce-development policies andother forms of cooperative economic problem-solving. Unlike agood part of the developed world, the United States has no sys-tematic worker-training system outside of a college education.The public programs that exist are typically underfunded andwoefully disconnected to actual work-life needs. At the sametime, most employers invest in worker training only reluctantly.As a result, the United States has a profound shortage of skilledworkers in a wide range of professions. This general absence ofextensive life-long learning opportunities erodes employers’ability to pursue the kinds of high-wage, high-skill business strat-egies sought by organized labor. As Annette Bernhardt, LauraDresser, and Joel Rogers argue, unions must revitalize their his-toric role as solvers of the basic economic obstacles that indi-vidual business is unable to solve. This process starts by unions’offering leadership in building high-road training and modern-

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ization partnerships with business, the community, and govern-ment. The authors use the example of the pioneering WisconsinRegional Training Partnership to illustrate how unions can de-velop broad support for a high-road agenda.

For local union leaders and community activists, the kinds ofelaborate efforts described in the articles listed above may seemquite intimidating and beyond the realm of their limited re-sources. By describing several new economic development ini-tiatives in Massachusetts, however, Mary Jo Connelly, PeterKnowlton, Pete Capano, and Harneen Chernow illustrate thepractical first steps that local and state labor leaders have takento enter what is, for most, new territory. This process has in-volved discovering the misplaced priorities of current publicpolicies, the actual levers of decision-making, and the wide rangeof groups with concerns similar to those of labor. Even the mostinitial steps taken by local coalitions have revealed what canbecome a sustained and far-reaching long-term agenda.

In addition to their rich particulars, the articles in this issuepoint to several general conclusions. First, research matters. Be-cause current market-oriented economic development policiesrely on an environment of secrecy and fragmented information,basic documentation can provide a powerful tool. When broughtinto the light of day, the problems of wages, training, and landuse have proven compelling issues in which the stupidity ofcurrent policies is often obvious to the general public. Second,economic development issues can easily flow from local to statepolicy and back. Such flexibility allows activists to begin at thelevels at which they have the most access and to build from thispoint. Changing local policy often points to the need for statechanges, while state changes can open new arenas for pursuingnew local policies. Third, all the examples covered in this issuehighlight the tremendous opportunities for unions to build broadcoalitions with diverse segments of the community. Economic



development policy changes cannot be won by labor based onits own resources. Fortunately, the ravages of twenty years ofeconomic restructuring have left a wide range of groups in thesame position as labor—feeling the need to intervene proactivelyin realms that have been left to business and political leaders.The articles on sprawl and workforce development also point tothe possibilities for labor and the community to find commonground with key business leaders when discussions move fromblocking the worst negative economic behavior toward whatkind of community we want to build.

Finally, the examples all show that change is possible. Whilethe gains won by the groups covered in the articles did not comeeasily, they demonstrate the power of coalitions to mobilize pub-lic sentiment in ways that force change. Not all the labor-com-munity successes came in ideal political environments. In bothMinnesota and Vermont, activists had to win over Republicanvotes in Republican-majority legislative bodies. Living-wagecampaigns have frequently had to overcome business-orientedmayors and councilors committed to blocking, vetoing, or notimplementing such laws. Despite actual or attempted state lawsto ban the living wage, the business opposition has not beenable to shut down local living-wage organizing even in stateswith sweeping conservative control of the state government. Oneof the secrets of these policy successes lies in their proactive na-ture. Labor and the community are not attempting to fend offthe latest corporate outrage. Rather, the coalitions are offering apositive step toward building a better future. Given that cyni-cism about the potential for positive change is a major way inwhich the current powers-that-be maintain their agenda, theability to offer practical alternatives is a powerful tool. Indeed,by developing a new vision for economic development, unionsand their allies can tap what is one of the greatest forces for pro-gressive change: hope.

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These patterns revealed in the articles below suggest that unioninvolvement in economic policy matters will prove to be not ashort-lived experiment but a clear growth area of the future. In-deed, many of today’s grass-roots currents of economic-policyorganizing reveal potentially powerful seeds—seeds that canbecome part of the nation’s next great era of social reawakening:the economic democracy movement of the twenty-first century.

In our review, Peter Ranis observes in his comments on Rekin-dling the Movement: Labor’s Quest for Relevance in the 21st Century,edited by Lowell Turner, Harry C. Katz, and Richard W. Hurd,that despite some evidence of a U.S. labor revival in the post-1995 period, the writers are only cautiously optimistic of such apossibility. Focusing on the stresses and strains in replacing ser-vice unionism with organizing, mobilizing, and social movementmodels to unionization, Ranis argues that, despite the writers’thoughtful suggestions for this new and more hopeful period,few are sanguine about a sea change in labor culture. One of thebook’s major contributions, according to Ranis, is the writers’theoretical analyses grounded in factual historical and contem-porary union appraisals.

—David Reynolds, Guest Editor

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Unions Organize Around Economic Development