Opinion – Paul Krugman: Why a pro-union vote on Amazon can be a big deal

I grew up in a relatively egalitarian society, at least when it came to income. Obviously, there were class differences in 1974, when I graduated from college; some jobs paid much more than others, some people were rich while others were terribly poor. But for most Americans, those differences were much narrower than they are today.

It was an era when many, but not all, manual workers’ jobs offered solid incomes and lifestyles. Labor productivity in the early 1970s was less than half of what it is today, but the average hourly wage of non-supervisory workers, adjusted for inflation, was as high then as it was on the eve of the pandemic. And while the economic elite lived well, it was nothing like the extravagance we now consider normal. In 1973, CEOs of large corporations earned about 23 times as much as their employees; today the ratio is 351 to 1.

At the time, we considered a largely middle-class society normal, imagining it to be the natural condition of an advanced economy. But clearly it wasn’t.

So what made that relative equality possible? A big part of the answer, of course, is that the United States still had a strong union movement at the time. There is overwhelming evidence that in their heyday unions had a powerful effect on reducing inequality, both by raising the wages of their members and by setting pay standards even for non-union workers.

That’s why what happened on Staten Island last week, when workers at Amazon’s distribution center voted by a wide margin in favor of unionizing, could be of enormous importance.

I often meet people who believe that the decline and fall of American private-sector unions — which accounted for 24 percent of workers in the private sector in 1973, but just 6 percent last year — was an inevitable consequence of economic change. After all, weren’t the big and powerful unions concentrated in the manufacturing industry? And weren’t they destined to lose power both because manufacturing declined as a percentage of employment and because international competition reduced their bargaining power?

But other countries remained highly unionized — two-thirds of Danish workers are unionized — even as they experienced deindustrialization comparable to what happened in the United States.

After all, why should unionization be limited primarily to manufacturing? If I had to describe a company that would make an especially good target for unionization, it would be something like this: a large company, with a lot of market power because it does not face strong competition at home or abroad.

It would also be a company that cannot credibly threaten workers with outsourcing jobs to lower-cost countries if they unionize, because its business model depends on having most workers close to customers.

In short, it would be a company very similar to Amazon. Consumers can see Amazon as a kind of pristine experience, untouched by human hands: you click a button and things appear on your doorstep. But the reality is that Amazon’s commercial success depends less on the quality of its website than on a massive network of distribution centers located near major markets — such as Staten Island — that make it possible to quickly deliver a wide range of products. The need to maintain this network is why Amazon employs more than a million workers in the US, making it the second largest private employer after Walmart.

So why aren’t Amazon and Walmart workers represented by unions like General Motors employees were when it was America’s largest private employer? The answer, of course, is primarily political. The great unionization of American manufacturing took place during the New Deal era, when federal policy was pro-union. The U.S. economy’s shift from manufacturing to services came during an era of right-wing dominance, with federal policy hostile to unions and willing to turn a blind eye to hard-line — and sometimes illegal — tactics used by employers to block movements. unions. In fact, Amazon aggressively fought to block a pro-union vote in Staten Island.

But it failed.

But perhaps this Labor victory was a failure. It comes when Amazon workers in Alabama appear to have narrowly refused a union. But maybe, just maybe, it represents a tipping point.

You don’t have to romanticize unions to realize that a revival of unionization would make America, in many ways, a better society. Unions can, as I said, be a powerful force for equality. They can also reduce the madness of politics in the US.

I don’t just mean that union members are far more democratic than voters in general, although given the QAnonization of the GOP I think it’s fair to call this a step towards sanity.

Beyond that, though, unions appear to be an important source of political information for their members, potentially helping voters to focus on the real political issues, as opposed to, for example, the existential threat posed by Disney with a social conscience.

OK, I’m making a big case out of what is so far a small fact. But if America manages to maneuver to be more egalitarian, less politically insane, future historians might say that the turning point began on Staten Island.

Translated by Luiz Roberto M. Gonçalves