Workers’ Center Response to Nation’s Financial Crisis: Pressures on Workers Grow, and Their Income Stagnates (OpEd from Carl Feuer)

At first glance the Tompkins County Workers’ Center has little to do with the financial crisis gripping Wall Street, the United States and the world.

What could the Workers’ Center have to do with Bear Stearns, Lehman Brothers, Merrill Lynch, Fannie Mae, Freddie Mac and AIG?

Quite a lot it turns out.

The frantic efforts to bail out failing firms and a system on the brink of collapse are merely defensive actions that deal not a whit with the real sources of the crisis. This is where the Workers’ Center as well as local trade unions come in.

New York Times columnist Dave Leonhardt wrote that one major source or cause of the financial crisis is the stagnation of middle and working class family incomes. Between 2000 and 2007 median household income declined, despite the boom years. Working families with the lowest incomes had it worst, showing the largest decline.

Those with the highest incomes meanwhile saw significant gains. Income inequality surged in these years.

While their income stagnated, pressures on working families to spend and buy grew. Those pressures are endemic to our system but worsened as financial institutions saw a chance to make a lot of money on mortgages and complex financial instruments. They offered the bait of subprime mortgages, which created the illusion that the American dream of home ownership was achievable.

Already mired in consumer debt, working families nonetheless took the bait. When housing values fell, well, the “American Dream” became the “American Nightmare” that many are living right now (though it’s the rich that are mostly being bailed out, not working families who are facing foreclosure, unemployment and further income declines).

So what does all this have to do with the Workers’ Center and local unions? For more than 10 years, the Workers’ Center (and its predecessor, the Living Wage Coalition) has worked side by side with local trade unions to raise the incomes of working families. Blue collar workers represented by UAW Local 2300, for example, earn wages between $12.50 and $23 per hour with health insurance, retirement benefits and due process in the workplace. Many of these families still struggle to raise their families in the way they would like, but those wages are generally significantly higher than workers who do the same work in non-union situations receive. It is the non-union workers who are the focus of the Workers’ Center, and it has had some success in establishing a local living-wage standard and raising the wage bar for local hotels and other employers.

The financial crisis shows how essential the work of organizations like Workers’ Center and UAW Local 2300 is. But it shows also how much more work is needed. Unless government at all levels recognizes and deals with the low and declining incomes working families are experiencing (one simple but important measure would be passing the Employee Free Choice Act; another would be raising the minimum wage to a living wage), and until more workers organize to fight for better wages and benefits, I’m afraid little will change.

So the ever expanding bailout may be needed, but, as Leonhardt tells us, it won’t solve the problem. That will be much harder. Unless government also strengthens unions and moves to ease the stagnation of incomes for working families we will shortly be back where we started.