Union membership rates in the US have been falling steadily since the 1950s. The US Bureau of Labour Statistics said this rate, the number of wage and salary workers who were members of unions, was 10.7 per cent in 2017. The membership rate in the public sector was greater than in the private sector, and those in service occupations like education had the highest rates.
That should also partly explain why teachers are the most active now. This year we have been seeing a high rate of teacher strikes across the US. A nine-day strike in West Virginia ended with a pay rise and now strikes have taken place in other states too, namely, Oklahoma, Kentucky, Colorado and Arizona (all states where average teacher pay is below the national average).
Statistics show that teacher pay has declined in real terms by 2 per cent between 1992 and 2014, but apart from demands for pay and benefits, teachers have been asking for a higher budget for school infrastructure, textbooks, and so on. Even where budgets are up, more has gone to administrators rather than teachers or for classroom supplies.
There are two major reasons for the decline in national union membership. One is the fall in manufacturing jobs consequent to outsourcing, and the other is the political climate that tends to lean towards the conservative and de-emphasise unions. More than half the states in the US have the so-called ‘right-to-work’ laws, a euphemism that tries to reduce the power of unions.
But that does not mean that those who are paid well have strong unions. The pay continues to be strong and growing for CEOs, a non-unionised category. The Dodd-Frank law requires companies from this year to reveal how their CEO compensation compares with the median pay, called a pay ratio. Reports quoting analysis of this data across over 350 companies suggest that the multiple can range from as high as about 670 in the retailing industry to as low as about 70 in the energy sector. But what is even more interesting is that data also pokes holes in the argument that CEOs high pay is justified since it is tied to their performance through share options and targets to be achieved. Well, no. Studies suggest weak correlation between pay and performance; those who received the biggest pay increases performed only average in terms of generating shareholder value, and star performers received only average compensation.
Since we are also celebrating Karl Marx’s birth bi-centenary this month and year, it would be useful to reflect on what he may have thought about the difference in the trends between teachers’ pay and CEOs’ pay. Marx’s theories stress class struggle. In capitalism, the ruling classes (bourgeois) control the means of production and the working classes (proletariat) sell their labour in return for wages. Due to their power to control and regulate, the bourgeois would grab a greater share of the surplus that the proletariat produces.
The average CEO pay is about $14 million (about ₹91 crore) and the average teacher’s pay is about $60,000 (about ₹39 lakh). Now, can we understand why the teachers’ unions struggle to protect their share of the ‘surplus’ in the economy and perhaps wonder why other less privileged groups are not doing the same? This is a simplistic representation of Marx and the union movement. But in a capitalistic society such as the US, with such widening income and wealth inequality, reduction of taxes on the wealthy, growing homelessness and high incarceration rates, let us take our hats off to Marx for his insight.
The author is a professor at Suffolk University, Boston.
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