Income Inequality And The War On Labor

Blog ››› ››› BRIAN POWELL

Right-wing media outlets who have long engaged in a campaign to demonize organized labor may be contributing to economic inequality as economists point to declining union participation as one cause of the growing economic rift in America.

Unions and union workers have been a consistent target for right-wing media figures who have attacked organized labor as a leech on society and destroyer of jobs. In the latest example of anti-union rhetoric, the opponents of organized labor in the conservative media have defended Boeing Co., which has come under fire recently for its anti-worker policies. 

On January 3, Boeing's leadership came to an agreement with its largest union that freezes pension plans and limits wage increases for Boeing workers -- all at a time when the company is setting productivity records while its shares are hitting record highs on the New York Stock Exchange. Workers initially rejected the terms, but after Boeing began taking steps to move their jobs to states with anti-union right-to-work laws, they conceded by a margin of 51-49%.

Fox News and the Wall Street Journal touted the development as a victory for Boeing and the people of Washington state, where the company is headquartered. On the January 7 edition of Fox & Friends, above on-screen text that read "Flying High, Boeing's Victory Over Big Labor," co-host Steve Doocy asked whether the deal was "a nail in the coffin of America's unions?"

But LA Times business columnist Michael Hiltzik argued that the real impact of the vote "is that it continues -- even accelerates -- the hollowing-out of America's once thriving middle class" by shifting the company's profits away from workers and toward shareholders:

Any way you cut it, the workers are getting squeezed. A Boeing machinist job, once the reliable foundation of a middle-class lifestyle, will be much less of one in the future. It won't be exactly hard time--with average pay about $70,000 "it's still one of the best deals you can get for a blue-collar worker without a college degree," observes Leon Grunberg, a labor relations expert at the University of Puget Sound--but it shrinks the workers' economic horizons considerably, especially for younger workers.

[...]

So if Boeing is gaining so much with this deal, where are the gains going? The answer, as is true throughout corporate America, is to shareholders and executives. Under Chairman and Chief Executive James McNerney, who took over in 2005, the company has increased its dividend every year but one, from $1.05 to $2.92 in 2014. That's a total increase of 178%, including a huge bump of 51% this year alone.

At the same time, the company has authorized $17 billion in share buybacks. That's just another way of shoveling money out to shareholders, and surely accounts for a good portion of the company's handsome run-up in share price over the last year, when it has appreciated by more than 80%.

Supporting Hiltzik's claims is a report from the Center for American Progress, which illustrated how the decline in union participation mirrors the decline in middle-class incomes. Economist and former Labor Secretary Robert Reich recently argued that preserving "the right to form a union without being sacked for trying" is one of six solutions to reduce income inequality in America.

An LA Times news article about Boeing notes that labor unions "face dramatic declines in membership strength, reduced bargaining power because of right-to-work states and hostile public opinion."

As it happens, right-wing media may have played a role in both the success of right-to-work legislation and in breeding anti-union sentiment, even with Boeing specifically. Fox News and the Wall Street Journal ran to the company's defense while it was under investigation by the National Labor Relations Board, accusing the NLRB of corruption for investigating accusations that the company moved a factory to right-to-work South Carolina in retaliation for labor strikes in Washington.

Fox has repeatedly misled viewers about the impact of right-to-work laws, arguing that they provide a net benefit to workers and economies in which they're implemented.

And the network's personalities have not shied from attacking union workers on a more personal level, calling them, among other things, "parasites" and "thugs."

Posted In
Economy, Labor Unions
Network/Outlet
Fox News Channel
Show/Publication
The Wall Street Journal
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