Originally posted on the CSRwire website.
By CSRwire Talkback Managing Editor Francesca Rheannon
Companies serious about CSR should be supporting strong labor movements, both at home and abroad.
Since I’ve been writing about CSR and sustainability, I’ve noticed one curious fact. While many companies tout support for labor rights further down the supply chain in poor countries (often after feeling the heat from NGOs and shareholder activists), the silence is deafening when it comes to supporting unions and the right to organize at home. And labor unions are under pressure everywhere, no more so than in the U.S.
Yet their progressive legacy is still in evidence (although under threat of erosion from conservative governments), especially in the EU. Hard won gains include pensions, vacation time, living wages and workplace health and safety rules that are grounded in the precautionary principle.
These gains have not only benefited union members. Many of them have been enshrined in the labor laws of the EU — the precautionary principle, for example, has made products safer for consumers and the environment. With its widening circle of member states, the EU has lifted living standards across the continent. Despite higher unemployment and deficits than in the U.S. and the U.K., poverty rates are lower on the continent, thanks to the more robust safety net that historically strong unions were instrumental in bringing about.
But these gains threaten to go the way of the dodo, especially if they follow the example of the U.K., with its slash-and-burn austerity programs. And austerity in the U.S. may not be a formally announced policy, but with the decision by the Obama administration to cut state funding, state governments like New York and California promising to slash spending and massive unemployment keeping tax revenues down, austerity already rules.
But the benefits of labor’s power go beyond workers or the unemployed. Like the bumper sticker says, “The Labor Movement: the folks who brought you the weekend.” The weekend and another labor movement innovation, the eight-hour day, allowed workers leisure time. That boosted the bottom lines of whole new industries, like the auto industry, travel and tourism, and mass entertainment, to name a few. And with higher incomes and benefits brought about by the labor movement, workers-as-consumers were able to drive the engine of prosperity in advanced industrial nations.
In the U.S. history-changing environmental laws, like those establishing the Environmental Protection Agency and Clean Air Act, would never have come to pass if the labor unions had not put their muscle behind them. The visionary labor leader (and my mentor back in the day) Tony Mazzochi of the O.C.A.W. was the moving force behind a coalition of labor and environmental groups that encouraged a Republican president (no friend of labor) to sign both the Environmental Protection Act and Occupational Safety and Health Act into law.
That made it a lot easier for companies that want to be good environmental actors to operate on a more level playing field. (In the U.S., that will be undermined if President Obama makes good on the promise he made during the State of the Union address to take an axe to regulations. He ridiculed the regulation of saccharine as “toxic waste” in waterways, saying if it’s safe enough to put in your coffee, it’s safe enough for waterways. But when tons and tons of saccharine are dumped into our rivers and lakes, you can bet it will be toxic waste.) It also created consumer (and industry) demand for environmentally friendly products — the very products companies with a strong CSR and sustainability profile are selling.
Those companies command a price premium for green goods; they need consumers to have good middle class incomes to increase market share over less-green products. But without a strong labor movement, those good middle class incomes are going, going, gone. Real wages are stagnant or falling, poverty rates are rising and income inequality has attained heights not seen since the Gilded Age. Moreover, companies that want to pay their workers a living wage are competing with bad corporate actors, like Evergreen Solar, in a race to the bottom.
The CSR community depends on transparency and accountability to keep its credibility. Unions that are energized, instead of demoralized and cowed, can help keep companies honest — another area where what’s good for labor is good for CSR. But if unions are always fighting to hold onto past gains that are fast slipping through their fingers, they end up making deals that enable companies to ride roughshod over CSR principles.
Take two-tiered wage structures. They trade away the wages and benefits of young workers to keep those of older workers. It’s a devil’s bargain that will have terrible consequences for society, condemning more families to poverty, raising pressure on taxpayers to pick up the tab for increased medical costs and crime, and eroding social stability.
That brings me to my last point. A strong labor movement creates a strong middle class and flattens out the extremes of wealth. As the British authors of the book The Spirit Level point out, countries that have greater income equality are happier and more stable. The corollary to this, of course, is that societies with higher extremes between rich and poor are more unstable, or more likely to become so. We see the result being played out these days on our TV screens — Egypt is highly income unequal. (The U.S. is even more so.) And instability isn’t good for business. Stock markets have fallen as investors nervously watch events in Egypt unfold.
The rise of inequality, the spread of deregulation and the growth of predatory capitalism have all paralleled the decimation of labor unions. Government is supposed to serve the interests of society as a whole — to protect those who have no other recourse to power. Robust unions are the only counterweight power to predatory corporations, whose political power is becoming ever more complete. When unions are extinct, good corporate actors will be left swimming against the tide in a sea full of sharks.
About Francesca Rheannon
CSRwire Talkback’s Managing Editor is Francesca Rheannon. An award-winning journalist, Francesca is co-founder of Sea Change Media. She produces the Sea Change Radio’s series, Back to The Future, and co-produces the Interfaith Center of Corporate Responsibility’s podcast, The Arc of Change. Francesca’s work has appeared at SocialFunds.com, The CRO and E Magazine, and she is a contributing writer for CSRwire. Francesca hosts the nationally syndicated radio show, Writers Voice with Francesca Rheannon.
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