Fixing the economy through collective bargaining

Much of this past year workers in the fast food industry have been taking action to get better wages. While there is certainly a debate as to whether an increase in the minimum wage is the proper vehicle to facilitate this change there is little denying the fact that income inequality is on the rise and hurting the entire economy.

Data shows that corporations are bringing in record profits while wages are at an all time low. Additionally, while wages for the middle class are essentially stagnate the top 10% set a new record as they now bring in more than half of the countries income yet spend a much lower portion of their income. Studies show that the rich save a greater percentage of their income while simultaneously putting less back into the economy.

Trickle-down economics only works if the rich spend their money or if corporations use profits to hire more people. Unfortunately both of these things are decreasing instead of increasing as a greater portion of company profits heads towards top executives and away from other employees.

A giant stumbling block in lowering income equality is the American dream. In the past it was believed anyone could rise from the bottom and become successful in the US. Unfortunately the US is no longer the world leader when it comes to social mobility. As a matter of fact children of wealthy parents who don’t attend college are 2.5 times more likely to be wealthy than children of poor parents who follow the “work hard” tenant of the American dream and get a college degree. Essentially regardless of the amount of hard work you put in it is extremely difficult to move from the bottom to the top.

But this reality doesn’t stop many at the top from perpetuating this fallacy for their own benefit. Instead, this sleight of hand is used to justify the outrageous gains those at the top have made suggesting that if you work hard you too can become a millionaire. Thanks to this meme the average American believes that the US is filled with nearly four times as many millionaires as there really are.

The reality is that there are fewer rich people in the US then many would have you believe and regardless of effort the majority of those that make it big already had a seat reserved by their parents before they got there.

The solution to these problems is to get the average working class citizen a greater piece of the pie. This can be done with government mandates like minimum wage and redistribution via taxes however those are not necessarily the most effective methods and can potentially negatively affect businesses. The best course of action for these fast food workers is to unionize. Data shows that the higher the percentage of workers that are in unions the lower the income equality is.

By coordinating a strike these workers have already taken a first step to organizing. Once organized these workers would be able to hire profession negotiators to sit down at the table and find a common ground that benefits the employees and the companies they work for.

A common belief among those who oppose unions is that each employee should negotiate for themselves however while many union employees are highly skilled at the jobs they perform they are not trained negotiators. Suggesting that individual employees handle the negotiations of their benefits and pay with fortune 500 companies is not much different than expecting people to act as their own attorney. Sure you can do it but most people would be better off hiring a professional.

Contrary to popular talking points unions are not out to fleece the companies they work with. Ask any high ranking union official and they will tell you they want the company to be successful because in the end, any agreement should benefit both parties. As Ford CEO Alan Mulally said in a recent interview “both the management and the unions signed these agreements over the years and we ended up not being competitive. In Fords case we worked together, we redid all the agreements and that’s why we are now bringing products back to the United States”.

Greater union membership would also alleviate a number of Republican’s concerns as well. They complain that the rich pay too much tax. Luckily unions are adept at helping employees get a greater share of company profits. This means that the people at the top would have less taxable income. Republicans also feel that too few individuals contribute to the US tax system and want to broaden the base. Again, since unions make sure workers bring home more of the profits they help their companies achieve they also make sure that less people “pay no taxes”.

In the end the best way for American workers to get their fair share is to avoid government intervention and instead rely on free market principles. No individual can match the power of a corporation, but an organized collection of individuals can work with these corporations to create an environment where everyone wins.

Previously published in the Detroit News.

Dale Hansen is a true patriot and blogger for the Detroit News. On twitter @DaleHansenDNews
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  • maggie atlas

    Unions essential. Corporations have amalgamated the illusion of many brands choice competition but same parent company Unions need to copy the tatic. Very large unions needed to stand on equal footing with Corps. Corporations invest how much to ensure compliant politicians are INSTALLED to ensure Corps agenda is inplemented. Govts in many developed countries have neutered the Unions and Corporate Media has manipulated public opinion by demonising vilifying Unions.