By Robert B. Reich

The San Francisco Chronicle

Monday 03 March 2008

We're finally reaping the whirlwind of widening inequality. A recession looms because most consumers are at the end of their ropes and can't buy more. Median hourly wages, adjusted for inflation, are no higher than what they were three decades ago. Since then, most of what's been earned in America has gone to the richest 5 percent. But the rich won't buy much more because they already have most of what they want - after all, that's what it means to be rich.

There's no magic bullet for reversing the trend toward widening inequality. Surely, better schools for children from poor and lower-middle class communities are part of the answer. So is a bigger refundable tax credit - in effect, a cash supplement - for working families. Both should be financed by a higher marginal tax rate on the rich.

But an additional part of the solution - rarely talked about these days - is stronger labor unions. This is especially true for low-paid workers in local service occupations, such as retail workers, hotel and restaurant employees, and people who work in hospitals. If they were unionized, they'd have the bargaining leverage they need to get better wages. They'd also have a voice for suggesting to management better ways of delivering services - often improving productivity enough to cover the higher pay.

But it's been difficult for low-wage workers to organize themselves into unions. Employers often fire or intimidate those who take the lead. While it's illegal to do so, the penalty for employers who get caught is in effect a slap on the wrist. Charges of illegal dismissals take years to wind their way through the National Labor Relations Board. And even when the board finds that an employer acted illegally, the worst that can happen is the worker has to be rehired and given back pay that was lost.

A half century ago, most employers obeyed the law and allowed workers to organize. In the 1950s, the board found only one of every 20 union elections marred by illegal firings. But as competition heated up in subsequent decades, employers have felt increasing pressure to cut wages. So union-busting became common. By the early 1990s, according to government data, illegal dismissals occurred in one of every four union elections. Nowadays, even though polls show most workers would organize a union if they could, the process is so complicated that it's rare they even get to choose.

Even employers who should know better are fighting unions. Take the St. Joseph's Hospital System, for example. It's a huge, 14-hospital enterprise with 21,000 employees, including hospitals in Santa Rosa and in Orange County. The system is owned by an order of nuns who have distinguished themselves in the past with their support for civil rights and social justice, including marching along with Cesar Chavez and the farm worker's union and backing the service employees' union "Justice for Janitors" campaign in the 1980s.

But when it comes to its own workers, St. Joseph's has dug in its heels. Workers have been trying to organize there since 2004, and the outmoded NLRB process hasn't protected them. The NLRB found St. Joseph's employees had been "threatened with adverse consequences" for supporting a union. But St. Joseph's still won't even negotiate with its employees a process for holding a fair union election. I've spoken with the chief executive, Deborah Proctor, and with Sister Katherine Gray, chair of the St. Joseph Health System. Both insist that their workers "don't need a union" because "we take good care of them."

That's not what I've heard from St. Joseph employees. Of course, it's not unusual for management and labor to have different views. That's one way a union can be helpful to management. It gives employees enough security to feel free to share their candid views. Such sharing is also good for customers - such as hospital patients - because front-line workers often know more about how people are being treated, and how treatment can be improved, than does top management.

Hospital workers are among the lowest-paid and hardest-working people in America. They deserve a union. But the old NLRB process won't even get them a fair hearing because it's so broken. That's why workers at St. Joseph's - like so many other workers across America - are seeking a fairer process for union elections.

The "Employee Fair Choice Act," which recently passed the House of Representatives, would let workers have a union if a majority wants one, in a simple up-or-down vote. St. Joseph's workers aren't even asking that much. They just want an arbitrator, chosen by both management and labor, who'd help both sides quickly resolve any conflicts along the way to a vote. So far, St. Joseph's management says no.

The American economy is in trouble largely because lower and middle-income workers no longer have the buying power they need to keep it going. Inequality is wider now than it's been in more than 70 years. Unions could help reverse this trend. But if even an order of nuns can stop workers from forming one, we've got a very long way to go.

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Robert B. Reich is professor of public policy, Goldman School of Public Policy, UC Berkeley, former US Secretary of Labor, and author, most recently, of "Supercapitalism."

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