Tax Cuts for Corporations Don't Increase Wages, Unions Do
Last edited Sun Nov 5, 2017, 12:38 PM - Edit history (1)
As the CNN commercial with the apple points out, facts matter.
I'm a union Rep and I have been negotiating union contracts for 25 years. At hospitals, schools, municipal light companies, pharmaceutical companies, sports stadiums and more. Both in the Private Sector and the Public Sector. Most of them are maintenance workers (i.e. electricians, technicians, plumbers, carpenters, laborers and painters), some are security technicians (ADT, TYCO and Direct TV). I am also part of an organizing team. We are responsible for about 42 Collective Bargaining Agreements (CBA's) in and around Boston.
Tax rates for corporations are irrelevant to this discussion of wage growth. Companies can pass through any taxes to the consumer. The key factor to a company increasing wages is profit. Profits have never been higher in almost all the industries I work with. Our CBA's run between 3 and 5 years, with 3 years being the norm. Raises have run between 2.5% and 3.5%, with some contracts increasing benefits each year. The norm is 3% per year and increases in pension contributions, which happens in a majority of the CBA's. The Pharmaceutical Industry is the most generous. We have at least 8 contracts where the best health care plans are paid 100% by the employer. Let me repeat that, health care premiums for maintenance workers at 100%, with Harvard Pilgrim, Blue Cross and Blue Shield, and in some cases the union's health care plan, which is self insured.
Corporations consider labor a commodity. They will not pay more for any commodity than they have to. Hence, the union sets the rate in contract negotiations through collective bargaining and strike threats (I haven't had a strike in the 25 years I've been negotiating).
Licensed personnel (Plumbers, HVAC, Electricians) make, on average, between $85,000 a year and $100,000 a year, the unlicensed personnel make between $60,000 a year and $75,000, depending on the individual CBA. I represent some electrical engineers working at a municipal light company making between $135,000 and $160,000, but those are high end, highly educated positions.
So, to my point. The middle class has shrunk over the past 4 decades in a similar proportion to the reduction in union membership (we call it "density"
. Profits are doing fine. Look at the stock market. The Market increases as profits go to the share holders. There is no need for a tax cut to increase wages. If the boards of directors wanted to increase wages, there's plenty of money to do so. Do you think the Walton's don't increase wages and benefits at WalMart because they don't have enough money? Do you think that they will do it now because they can leave their offspring their fortune without paying taxes on it?
And Unions don't only increase wages at union locations, but at non-union locations as well. When we start an organizing drive to get a majority of workers to vote in a sanctioned election to become union, the company always promises to increase wages and benefits in order to say to the workers "see, we're good employers. you don't need the union." They can't actually do it during the election drive, as that would be an unfair labor practice (ULP). Kinda like a bribe. But they can make that promise.
In the past 25 years, federal and state laws have made it more difficult to unionize a work force. "Right to Work" laws decimated unions in 28 states. Right to Work makes paying dues optional. Yet, the union must still give full service to every member, whether they contribute or not. The Labor Dept. estimates that a union worker makes between 24% and 28% greater wages and benefits than workers, performing similar work at non-union location. Dues run between 2% and 3% for a union worker. You do the math. Who do you think is better off? That's not including all the other services that a union provides, like seniority, protection against discrimination and arbitrary termination.
Tax cuts have always meant higher profits and higher dividends. But only in a union environment, can profits translate into wage growth, and there is already more than enough profits to accomplish that.
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