Foreclosure Crisis Could Strengthen Labor Movement—If Efforts Focused

Roger Bybee

The labor movement has somehow been unable to stem the steady tide of jobs moving from the U.S. to China, Mexico, and other low-wage nations.

Unemployment and other indices of social misery in many industrial cities are at levels not seen since the Great Depression and economists like the Economic Policy Institute’s Lawrence Mishel predict that the jobless rate will stay at 8% or above for several more years.

Nonetheless, we haven’t seen a corresponding Depression-style upsurge of spontaneous actions by jobless workers to block evictions and foreclosures. There has been no cascade of sit-down strikes to challenge wage cuts and the job relocations. Nor have we witnessed massive labor rallies for Wall Street accountability and public job creation programs.

Unfortunately, when the rank-and-file are feeling defeated and not clamoring for mass action, the labor movement’s tendency is to resort to lobbying and wait for the next election. But this seems a propitious time for labor to examine another alternative: the need for action on the home-foreclosure threat stalking hundreds of working-class communities and millions of families.


Volatile pressures are building up over home foreclosures in many communities, and labor still exerts considerable influence in numerous factory towns. What’s lacking, in my opinion: a major push for local action by the AFL-CIO.

There are several reasons for labor to grasp the foreclosure issue, apart from the obvious reason that many of their members are directly threatened.


First, the tide of foreclosures is intensifying, not improving. Federal programs are not stemming the loss of family homes that is one of the most painful features of the Great Recession, as Art Levine writes here and I discuss here.


Big bankers seem stuck in their customary Ming the Merciless” mode, showing virtually no willingness to accept reeductions in the principal owed on homes, as shown in congressional testimony this week.

As a consequence, a worsening epidemic is projected: More sobering numbers include a record 2.8 million properties in foreclosure for 2009, a 21 percent increase over 2008’s astonishingly high figure, with another 4.5 million foreclosures projected for 2010,” warns Nomi Prins, author of It Takes a Pillage. The number of home foreclosures is now occurring at ten times the daily rate during the Great Depression, she writes.


Second, major banks have utterly lost legitimacy with the public, as shown in recent polls. The public bailed out Goldman Sachs, JP Morgan, and Bank of America, but these financiers are unwilling to recognize that they owe the public anything in return except simple repayment of the government funds. They seem to have forgotten that they would be dead meat without taxpayers’ help.

As a result, the widespread and deep levels of fury, as reported by Brandweek​.com, are stunning. They suggest that the public is ready for a major campaign against the bank, as on forelcousre:

In a survey by the Pew Research Center for the People and the Press, just 4 percent of respondents said they have a very favorable” opinion of major U.S. banks and financial institutions”.

It wasn’t always this bad for banks in general. A series of Harris Polls indicates the downward trajectory of public opinion about them. As recently as 2004, 40 percent of respondents said they regard the banking industry as generally honest and trustworthy.” By late last year, the figure had fallen to 12 percent. …

Banks’ unloved status is evident in consumer attitudes about regulation of that sector. Despite a general aversion to greater governmental regulation, survey respondents are happy to see Washington use a heavier hand in its dealings with banks.

Thus, the foreclosure threat is worsening and the public legitimacy of banks is at rock-bottom. Moreover, the foreclosure crisis is starting to hit very hard in the Midwest, after earlier decimating states like California, Nevada, and Florida where home prices were extremely inflated.

For example, numerous industrial cities in Wisconsin are being hammered by not only Depression-era unemployment levels, but also an impending flood of home foreclosures. The situation will get especially intense in factory towns like Janesville (see here and here) and Beloit, Wisc., two adjacent cities in Rock County.

Both are reeling from the closing of GM’s huge Janesville assembly plant in December, 2008 and other shutdowns. Unemployment in Janesville (pop. 55,000) now stands 13.1%, and at an appalling 18.4% in Beloit (pop. 32,000).

But another sword of Damocles still dangles over their heads: in Janesville alone, 3,000 jobless workers will be exhausting their unemployment benefits this spring. With their unemployment insurance often the only source of income for many families, a huge number of foreclosures is all but certain.


However, labor still plays an enormously important role in these communities. While United Auto Workers Local 95 was unable to stop the GM plant from closing despite its best efforts, the union — long a central force in the community — has the massive membership base among ex-GM workers and retirees to lead resistance to the impending foreclosures. 

But to play such a potential role effectively, the union will have to re-kindle the same militant direct-action spirit that fired up its members for a sit-down strike in January 1935.

Further, unions like Local 95 would also need lots of technical help from the AFL-CIO in terms of home-foreclosure law, strategies and tactics (eg., directly blocking foreclosures? demanding a moratorium? mass negotiation with banks? ) used elsewhere, and taking their message to the broader community. 

If labor can harness its local resources in factory towns where unions still have strength and fortify their capacity to act, labor can potentially exert a huge impact on the foreclosure crisis at the local level. 

Foreclosures are the ultimate disaster for families, and preventing the loss of homes is incredibly vital in its own right. But as I see it, this effort might also re-ignited workers’ sense of their own power and belief that the system owes them some basic economic rights, and can spill over into renewed activism on a full range of issues.

Roger Bybee is a Milwaukee-based freelance writer and University of Illinois visiting professor in Labor Education. Roger’s work has appeared in numerous national publications, including Z magazine, Dollars & Sense, The Progressive, Progressive Populist, Huffington Post, The American Prospect, Yes! and Foreign Policy in Focus. More of his work can be found at zcom​mu​ni​ca​tions​.org/​z​s​p​a​c​e​/​r​o​g​e​r​d​bybee.
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