Why Now Is the Perfect Time For a Radical Labor Movement

Saqib Bhatti and Stephen Lerner

Fast food workers demonstrate for better wages and benefits outside of McDonald's shareholders meeting (Scott Olson/ Getty Images)

This post originally appeared at New Labor Forum. 

Austerity, growing inequality, and the economic and political domination of billionaires, bankers, hedge funds, and giant corporations make the current moment ripe for birthing a movement that can radically transform the country and the world. This is a time of great peril, but also of extraordinary opportunity and — yes — reasons for hope. The last four decades have been characterized by unrelenting attacks on the working class, the weakening of unions and the financialization of capitalism. The fiscal crisis of 2007-2008, the burgeoning wealth gap, and the flood of money from corporations and the rich drowning our democracy have exposed the nation’s political, moral, and economic decay, creating conditions that beg for an alternative to a system that increasingly only works for the super-rich.

In this environment, anything that unions can do alone, with dwindling power, will be insufficient. The challenge for labor, at a moment of historic weakness, is to figure out how unions can support and be involved in movements and campaigns that expand, rather than narrow, the scope and scale of what we are organizing and bargaining for. It may seem counterintuitive, but it is thinking bigger and broadening our vision, goals, and demands — even at a moment of weakness — that offers a path to resurgent unions and a more equal and just country and world.

Step one: Understand what’s going on in the economy

Unions need to understand and educate the public about what is going on in the economy if labor and other social movements are to seize this opportunity and figure out how to turn frailty into strength. They need to demystify the complexity of the how the economy works, so that working-class people and social movements can respond in kind.

Over the last 40 years, our economy has increasingly grown to be dominated by the financial sector — banks, hedge funds, private equity firms and other investment houses are the biggest profit-drivers in the economy, exercising effective control over many other areas of our economy. As investors, these financial entities put pressure on companies to cut expenses by slashing labor costs and avoiding taxes in order to increase their return on investment.

In practical terms this means we have two seemingly contradictory developments. On the one hand, there is the growing concentration of wealth and ownership of corporations at the top of the financial system. On the other, employment is increasingly disaggregated at the bottom, meaning the person, entity, or company that pays workers is increasingly someone way down the economic ladder that has little ability to significantly improve wages and benefits.

The few elite at the top have the best of both worlds: They are maximizing their control of the economy while simultaneously avoiding responsibility for the conditions of the workers whose wages they drive ever lower and for the communities they drain financially. To build a broad social movement that seeks to change fundamental aspects of our political economy, we need to recognize how the financial elite have created a vicious cycle that systematically transfers wealth from workers’ pockets to their own in four important ways:

Creating and profiting from personal debt: Wall Street investors’ emphasis on shareholder profit creates pressure to lower wages. Having driven wages so low that most people cannot afford to pay their bills, Wall Street has developed a vast number of predatory loan schemes to further siphon wealth from the people at the bottom and middle of the economic ladder to the top. Subprime mortgages, student debt, credit card debt and payday loans are all ways Wall Street extracts ever greater wealth while trapping people in a perpetual cycle of debt. It is a sweet deal for the bankers and billionaires: they profit by driving wages down and then further profit from of people’s growing debt. This creates the opportunity to connect and organize students, home owners and low-wage workers around the shared experience of being strangled by debt and the fact that it is often the same financial firms, like Wells Fargo, that own their debt. 

Building and profiting from public sector debt: Wall Street and the super-rich have pursued a similar two-pronged approach to the public sector. First they lower taxes and come up with ways to avoid the taxes they can’t eliminate. Then they sell predatory financial schemes to cash-strapped cities, states and school districts to fill the shortfall they created because there isn’t enough money coming in. Cities and school districts that are trying to make ends meet rely on predatory financial deals, like bonds that pay wealthy investors triple-digit interest rates (no wonder former California Treasurer Bill Lockyer referred to these instruments as the school district equivalent of a payday loan”). This has particularly important implications for public sector unions and the communities they serve. Wall Street is increasingly calling the shots, threatening to raise interest rates and cut off capital if public officials don’t institute austerity by cutting pensions, slashing services, and laying off workers. By exposing the specific financial firms that are responsible, we can keep public sector workers and poor communities from being pitted against each other and instead jointly campaign against the corporations who are really in charge.

Defunding, then privatizing: Having starved government out of being an effective deliverer of public services, bankers and billionaires sponsor and profit from various privatization and public-private partnership schemes that further transfer public dollars to the top while destroying local democracy and any form of community control. Wall Street’s solution is to replace democracy with emergency managers and panels of technocrats after they bankrupt local communities. For example, hedge funds are behind the push in Congress to put an unelected fiscal control board in charge of Puerto Rico. In Illinois, Bruce Rauner, the private equity manager-turned Governor, wants give control of Chicago Public Schools over to a state-appointed financial oversight panel. Although proponents claim unelected panels and control boards are better able to deal with financial crises because they can make politically unpopular decisions, the reality is that their decisions are unpopular because they put the interests of Wall Street creditors ahead of the needs of residents.

Establishing a corporate-owned revolving- door government: The role of money in politics” goes far beyond the impact of political contributions on elections: Key regulatory positions go to people from the industries they are supposed to regulate. Upon leaving government, politicians and appointees become multimillionaires working for private equity firms and hedge funds. Former majority leader Dick Gephardt and former Republican National Committee (RNC) chair Ken Mehlman now work together for the private equity firm Kohlberg Kravis Roberts & Co. (KKR) that specializes in leveraged buyouts. Documenting, exposing, and campaigning to stop such revolving-door conflicts creates the opportunity to connect to groups trying to limit the role of money in politics on broader issues of corporate domination beyond the impact on elections.

Step two: Learn from labor’s past

Assert control over wealth and capital: In the post-World War II era, unions made two related mistakes that have contributed to labor’s isolation and to unrestrained corporate control of the economy: First, organized labor focused nearly exclusively on winning higher wages and benefits for only the unionized sector of the economy; and second it declined to challenge how companies were managed or how capital and wealth were invested or controlled. In the auto sector, the United Auto Workers (UAW) won higher wages in Big Three assembly plants at the same time the companies spun off and outsourced manufacturing of parts that used to be done by UAW members. These two moves both lowered standards for these workers and undercut the union’s overall power in the industry.

All of this was predicated on the idea that unions and collective bargaining were accepted by the corporate and political elites as a permanent fixture of the system and as a legitimate method for setting wages and benefits. Since the 1970s, however, union membership has been in a steady free fall with today’s union density at roughly 11 percent. This means that, in addition to having ceded control over wealth and capital, unions have largely focused on protecting the interests of only a small fraction of workers.

A quick look at The Blackstone Group, the world’s largest private equity firm, illustrates the current potential for labor and community groups to join together in a campaign that is about both tenant and worker rights. Blackstone is a major investor in many major companies. They recently moved into housing, buying up distressed mortgages from the U.S. Department of Housing and Urban Development (HUD), foreclosing on the homeowners, and converting the homes into rentals. Blackstone is the now nation’s largest landlord of single-family rental homes, and they are raising rents in cities across the country, driving working-class families out of their homes. If the unions who represent the workers at companies where Blackstone is a major investor, like Hilton Hotels and Equity Office, joined together with community groups in a campaign to fully unionize Blackstone-controlled companies, and to demand that the firm freeze rents on rental properties at affordable rates, the strategy would benefit renters not involved in the union as well as union members. A demand of improved wages and fair rents would give the broader community a clear self-interest in the unions’ organizing and bargaining campaigns.

Grow with mass movements: The irony of today’s labor movement is that, while unions look for the spark that will ignite a mass movement and lead workers to embrace unions, they are often are blind to or dismissive of the incipient movements sprouting all around them. From the immigrant rights and marriage equality movements to Occupy Wall Street and Black Lives Matter, the last ten years have been rife with grassroots movements that have engaged millions of Americans, captured the popular imagination, and won real victories. Although many unions have often supported these movements, most viewed that support as a form of extra credit” rather than a central pillar of the union’s own mission and organizing plan.

In the past though, some of labor’s most successful campaigns have won new members when unions embraced other mass movements by internalizing their demands and positioning the union as the vehicle for winning broader social change. For example, District 1199 grew dramatically by organizing health care workers in the 1960s and 1970s — before the National Labor Relations Act gave health care workers the right to organize — by fusing its work with the civil rights movement and building black working-class power. Organizing a union and fighting for civil rights became completely intertwined. They were two parts of the same struggle; 1199 helped fuel the civil rights movement and the civil rights movement’s growth and momentum inspired African American workers to stand up to their bosses, helping the union score organizing gains. Similarly, the American Federation of State, County and Municipal Employee’s (AFSCME) I Am a Man” campaign during the 1968 sanitation workers’ strike in Memphis framed the workers’ struggle as part of the broader civil rights movement.

UNITE HERE and Service Employee International Union’s (SEIU) early embrace of immigrant rights and their commitment to organizing undocumented workers not only helped support and build the immigrant rights movement, but it also led directly to significant organizing gains. For example, the Justice for Janitors campaign’s breakthroughs in organizing undocumented immigrant janitors grew in tandem with the growing movement of undocumented workers to come out of the shadows” at work and in their communities. It is hard to imagine a scenario where janitors would have struck and engaged in mass civil disobedience if there hadn’t been a broader movement for immigrant rights that both supported and was supported by the Justice for Janitors campaign.

Today’s labor movement has not been a reliable partner to other mass movements. They may encourage members to attend marches against police violence and may occasionally even send a banner with the union’s name and logo, but few unions are willing to fight against white supremacy at the bargaining table. They view Black Lives Matter as a good cause to support from afar, but they will not risk their organizational clout or jeopardize their relationships with City Hall or police unions for an issue they view as potentially divisive with some members that is not core to narrowly representing their members’ interests in the workplace.

Step three: Build a movement for transformational change

Unions are still the best-resourced progressive organizations in the U.S., but they have been far less successful at capturing the national imagination than other movements that have no resources. If unions limit their mission to the four walls of the workplace, then they become less relevant as they represent fewer workplaces. But by embracing other mass movements — without attempting to control or hijack them — unions can grow alongside of them and those movements will benefit from the organizational resources that organized labor can bring to bear.

Elements of rebuilding unions as part of a movement for transformational change include:

Take the offense , not the defense — Focus on the 0.01 percent at the top who dominate the economy and politics of the country: When unions wage defensive fights, the best they can do is lose less. Maintain an unrelenting offense, focusing on the people and companies at the top of the financial food chain, directly exposing, confronting, and challenging the people and entities that are driving and expanding inequality and fighting to take away power and money from unions.

One example of this is the Hedge Clippers campaign, with critical support from American Federation of Teachers (AFT) and other unions, which takes on the hedge fund managers and billionaires who push policies to enrich and empower themselves at our expense. The campaign researches and exposes the practices of billionaire hedge fund managers, showing how they drive inequality and dramatically increase their wealth by cutting jobs, avoiding taxes, and ripping off pension funds and university endowments. Hedge Clippers brings the research to life with nonviolent direct action, by disrupting industry events, and by working to cut off hedge fund capital by pressing pension funds and university endowments to divest. As a result of this campaign, the New York City Employee Retirement System (NYCERS), the largest municipal pension fund in the U.S., recently voted to divest $1.5 billion in hedge fund holdings.

Demand more, not less—Organize and bargain for the common good: Instead of limiting themselves to defensive fights to protect existing wages and benefits, many public sector unions around the country are starting to bargain for the common good” by partnering with community organizations to bring broader economic and political demands to the public employee bargaining table. For example, the Fix L.A. campaign found that Los Angeles spent twice as much on Wall Street fees as it did on all street services. By campaigning against that, the city workers’ unions and their community partners won a commitment by the city to hire 5,000 new workers to restore public services to pre-recession levels, and to prioritize hiring disadvantaged and formerly incarcerated people into these positions. The city also agreed to fund a revenue commission with a mandate to look at ways to reduce financial fees, renegotiate bad deals and develop other new progressive revenue solutions. That commission is currently being formed. The Chicago Teachers Union has partnered with parent, community and racial justice groups to tackle issues like the school-to-prison pipeline, the need for new progressive revenue and bad bank deals that have drained more than half a billion dollars from the school budget.

The Communications Workers of America (CWA) helped form the Committee for Better Banks, which is organizing front line bank workers. They have developed an organizing for common good” approach in the private sector, campaigning to rein in the power of Wall Street, remake the banking sector and organize bank workers into unions. Instead of just focusing on the declining wages and mistreatment of bank workers, the campaign is uniting with community organizations like New York Communities for Change, Make the Road New York, Jobs with Justice and the Alliance of Californians for Community Empowerment to challenge how banks’ predatory practices hurt both workers and consumers. Banks use sales goals and quotas to force workers to sell consumers predatory and unnecessary financial products. If workers don’t meet these unreasonable goals they can be fired. The only way to successfully organize the financial sector is to dramatically limit its power, and to do this both workers and those hurt by bad bank practices need to work together.

Align focus on common villains: The concentration of wealth and power in the hands of a smaller and smaller group of corporations and people creates the opportunity to align seemingly unconnected causes, campaigns, and movements against common bad guys, magnifying each group’s power. Minnesotans for a Fair Economy (MFE) has developed a shared analysis among unions, community groups, and worker centers about the role that a group of twelve corporations plays in dominating Minnesota politics and the state economy by pushing a regressive, anti-worker, and racist agenda. MFE’s member organizations have tied each of their individual campaigns to one or more of these dirty dozen” villains. When they take on a key corporate player like US Bank or Target, they run campaigns around multiple issues at the same time, involving many different groups. For example, subcontracted janitors at Target who were fighting to improve their working conditions were able to establish common-cause with organizers who were fighting to ban the box” that makes it difficult for the formerly-incarcerated to find employment. Combining their strength allowed them to win on both issues.

Challenge white supremacy: Unions cannot build a mass workers’ movement until they directly confront white supremacy, both internally and externally. Internally, it means unions must confront their own racist past, which led to workers of color being excluded from certain sectors of the unionized workforce; and directly address the problems caused by police unions’ defense of racist cops.

Externally, it means directly addressing issues of race as well as class. For example, unions can fight against Wall Street practices that are built on the theft of wealth from communities of color, like predatory lending. Unions can also incorporate racial justice demands directly into bargaining. For example, city workers in Los Angeles bargained for programs that would give communities of color greater access to city jobs. Teachers unions can similarly bargain over restorative justice practices that focus on mediation rather than punishment that disproportionately targets students of color and can help curtail the school-to-prison pipeline.

Re-popularize collective action and bargaining: These concepts aren’t just for workers. In order to decrease concentrated economic power, unions need to revive the idea of collective action and bargaining outside of the workplace as well. The ReFund America Project has led the call for New York City, Chicago, and Los Angeles, which together do $600 billion of business a year with Wall Street, to join together with other cities and use their market power to negotiate lower financial fees, change unfair fee structures, and stop predatory practices that drain taxpayer dollars. Think of this as collective bargaining for cities.

Student debtors, 40 percent of whom aren’t making payments on their loans, are organizing to negotiate lower payments and debt forgiveness with banks, student loan companies and the Department of Education, which is now the biggest student lender in the country. One of the most promising areas has been the work to cancel the debts of students who attend for-profit colleges that have closed down, sticking students with debts and an incomplete education. This organizing could be reimagined as collective bargaining for student loan debtors, building toward a possible student debt strike.

Democratize capital: Unions need to demand increased control over capital, and public sector unions are uniquely positioned to help lead the charge. For example, city and state workers’ unions could demand that their employers establish public banks to create a public banking sector that supports local economic development rather than Wall Street bonuses. The Postal Workers are already calling for the U.S. Postal Service to reinstate postal banking. Public sector unions can also play a key role in getting public pension funds to stop relying on hedge funds, private equity firms, and other extractive investment houses to manage their assets and instead use in-house investment managers who can provide similar returns for a fraction of the cost. This is a first step in putting over a trillion dollars of pension fund money to work in the interest of workers.

Break the law to change law: Not only are existing laws rarely enforced in ways that protect workers but, increasingly, what helps workers win is either illegal or will be made illegal. Unions have spent 30 years unsuccessfully trying to win labor law reform through traditional legislative approaches. Take a lesson from labor’s own history — from the auto factory sit-down strikes in the 1930s to the worker occupation of Republic Windows and Doors in Chicago in 2008 — great victories were predicated on breaking the law. It is the mass violation of unjust laws that creates the conditions to change laws and rebuild worker power.

Reinvent and reimagine the strike: Traditionally the goal of a strike is for workers to withdraw their labor as a way to pressure an employer into negotiating a better contract. Strikes have become more difficult to win both because laws limit what strikers can do and companies can usually operate successfully during strikes. The Fight for $15 and the OUR Walmart campaigns have successfully used one-day strikes to unite workers and bring attention to their demands. Unions need to think about strikes as more than a fight with one employer but as a way to disrupt the lives and businesses of the corporate elites. Strikes at Walmart and retail could be augmented by the physical blocking of key transportation hubs, disrupting the retail supply chain and demonstrating workers’ ability to impact the economy more broadly.

At this moment financialized capitalism is dominant, but also incredibly fragile, caught in cycles of booms and busts. Wall Street, mega corporations and newly minted tech billionaires boast of using creative destruction” to reshape companies and the economy while enriching themselves at labor’s expense. Instead of accepting their dominance and control unions can start to counter their destruction with their own creative disruption”, demonstrating just how fragile their control is and the potential power of labor — if unions are willing to flex their muscles.

By articulating a vision of a more just world, going on offense, demanding more instead of accepting less and aligning campaigns against the billionaires at the top, labor can inspire and organize a movement dedicated to redistributing wealth and power.

Saqib Bhatti is a fellow at the Roosevelt Institute and Director of the ReFund America Project. Stephen Lerner is a fellow at Georgetown University’s Kalmanovitz Initiative for Labor and the Working Poor. He is also the architect of Justice For Janitors campaign.
Get 10 issues for $19.95

Subscribe to the print magazine.