Organized Labor

by Yves Barbero

I mentioned to one of my clients, a businessman (I do some computer consulting), that the new Democratic Congress was likely to pass a minimum wage increase early in its term. He was quite unhappy with the prospect, and said so.

I scratched my head since no one at his business was paid as low as the proposed increased minimum wage. All are skilled employees of many years and clearly happy with their employment. Over time, I’ve talked with many of them.

He went on to explain that the manufacturer he used to make a small molded product had recently moved his operations from the San Francisco Bay Area to Mexico because of California’s ruinous minimum wage. Furthermore, the employees at the outfit had been against the increase. Now they are all out of work.

I mentioned something about having shanty towns if we didn’t have some bottom pillow for the less educated manual workers. In any case, the primary users of minimum wage workers are restaurants, retail stores, and service companies (hotels and building cleaning). Those jobs are not easily moved across the border.

No matter, these people, at a company he knows and likes, are out of work.

The temperature of the debate never rose very high. We’re both fairly amiable by nature, and in any case, I’m more a scribbler than a debater.

But driving home, I thought about it. I remembered an old union hand once telling me that businesses often blame unions for any failure they might have. It was rarely true. More likely, it was a combination of factors, the principle factor being bad management. In this case, a business owner wanting to justify a move to Mexico for its extremely low wages blames the minimum wage because he knows my friend liked his product made nearby (easier for quality control, which is critical for him).

Mexico has an average wage of $6 a day. And even Mexico is suffering from severe unemployment since the average wage in China is $2 a day. Soon, many jobs will slip to Vietnam (where Mr. Bush recently visited – one wonders what was promised) and other Southeast Asian countries where the wages are even lower. Even if our minimum wage was $2 or less an hour, it would be a race to the bottom for exportable manufacturing jobs. And then there are health and safety issues for workers, and the long numbing working days. Where protections have the formal color of law, as with some former communist countries, they have never been strictly enforced.

My conclusion is that the manufacturer would have moved anyway.

I also wondered about the claim that the workers at the factory were against an increase in the minimum wage. Did my friend interview them, or was he told that they felt that way by the owner?

Aside from the rise of shanty towns if there is no safety net, there is a public health cost, and increased crime. The poor are usually crowded together, and experience little preventative health care. They suffer from a variety of contagious diseases, including tuberculosis, which is making a comeback. These eventually get carried to the rest of us, and the public pays both in suffering and treasure. The only truly “free” market is the one for the spreading of disease, and we all want the government to control that. As to crime, the only predictable indicator is a society’s economic health. The more poor there are, the more crime there is.

For those who insist on an economic bottom line, if these employers don’t pay proper wages, the public winds up paying in increased health costs, both for themselves and the poor. Crime control also costs more and is likely to include measures restricting our liberties even further.

Union economists share with the rest of us a desire to see working families prosper, hopefully with union membership, but certainly to have at least a proper minimum wage. But they also understand that historically, the extremely poor don’t have the leisure to be organized. They’re too busy with the basics. They have to see a middle-class existence over the ridge -- the promise of a bright future for their families. This principle is also understood by the folks who, for ideological reasons or pure selfishness, don’t want unions. Keeping a low minimum wage, or having none at all, hurts union organizing.

Organizers of all types have almost all come from middle-class families, even in countries of extreme poverty. Often, with the government firmly against them, and the police used liberally to violently frustrate them, they will turn to radical solutions. The gun gives the poor an immediate sense of power, but not much of a future. As Mahatma Gandhi pointed out, if you use violence to achieve a revolution, you have to include violent men in your government.

In the U.S., our solution was to create a legal framework for unions (National Labor Relations Act, or Wagner Act, of 1935) . But this has been chipped at for decades. In addition, the shrinkage of the middle-class because the re-distribution of wealth through tax policy and regulatory changes has actually stifled any pretense at expanding the “free” market. NAFTA, not only hurts working families, but favors large corporations to the frustration of smaller businesses located where we actually live. If we had a “fair” NAFTA, it would encourage cross-border labor organizing, and better environmental measures. Foul air generated in Mexico freely crosses the border.

My friend is not an ideological free-market wingnut insisting that the Universe operate in fixed economic parameters. He is a businessman whom I’ve known and respected for many years. His outfit makes regular payrolls; his products are innovative and first rate; his payments to me are prompt. I have nothing but admiration for him and his colleagues.

He expressed a view about a genuine bread and butter issue, which, even if we disagree, cannot be ignored. We may have the political power at this moment in history to pass the minimum wage, and perhaps to put the squeeze on the White House to actually sign it, but it is important to remember that we have to talk and make alliances with small businesses, the owners of which make up a large part of the new political “independents,” who can no longer stomach Republican extremism. We ignore them at our peril. The framework which they use to evaluate important social and economic questions should be the same as ours: pragmatic and fact-based. That only comes about if we listen to each other.

Listing of State Minimum Wages (Department of Labor).

(Yves Barbero is a former member of Local 8, International Union of Elevator Constructors, and present member of the National Writers Union, UAW, AFL-CIO. He proudly maintains the website of the San Francisco Building and Construction Trades Council at www.sfbctc.org. He is a computer consultant and can be reached at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .)