How much do companies spend on union-busters? The Department of Labor has improved reporting requirements and enforcement—but more is needed
Companies spend hundreds of millions of dollars each year hiring professional union-busters to campaign against and defeat union organizing drives. However, only a fraction of this spending is publicly reported because of loopholes and other weaknesses in the law and its enforcement.
A new report by the Inspector General at the U.S. Department of Labor (DOL) found that the Office of Labor Management Standards (OLMS)—which oversees and enforces the union-buster (persuader) reporting requirements—“did not effectively enforce persuader activity requirements to protect workers’ rights to unionize.” While the report rightfully explains that more work must be done, there are many reasons the current OLMS should be commended for taking meaningful steps toward meeting its responsibility, and the report should be viewed as a roadmap for the agency moving forward.
OLMS is a tiny agency of fewer than 200 employees charged with enforcing the many provisions of the Labor Management Reporting and Disclosure Act (LMRDA), which include persuader reporting, union financial reporting, ensuring fair union elections, certifying compliance with labor standards as a condition of federal transit funding, and more. However, since its inception, OLMS has overwhelmingly prioritized enforcing the LMRDA’s union compliance provisions while failing to apply the same level of scrutiny required under the law to employers and union-busters. The Inspector General (IG) report makes clear that OLMS must begin allocating its resources more equitably to fulfill its obligation to protect the right of workers to engage in collective bargaining, mutual aid, and union representation.
Just by having a union vote, Mercedes workers in Alabama won major concessions and proved the importance of worker power
Last week, more than 4,500 workers at Mercedes-Benz’s plant in Vance, Alabama, voted on whether to organize with the United Auto Workers (UAW). After Mercedes and Republican elected leaders in Alabama waged a vicious anti-union campaign, the workers narrowly voted against the union. While this result shows the power of corporations and state governments to smother worker efforts to unionize, even in defeat the UAW helped Mercedes workers win substantial improvements in pay and benefits. Worker organizing can benefit workers whether or not they end up with a union.
As EPI has long documented, U.S. labor laws are heavily stacked against workers. Evidence suggests that more than 60 million workers wanted to join a union in 2023 but couldn’t do so. Employers spend more than $400 million annually on consultants to oppose worker organizing efforts, and employers are charged with violating the law in more than 40% of all union election campaigns. Many states, including Alabama, have helped employers by passing so-called “right-to-work” (RTW) laws; on average, workers in RTW states are paid 3.2% less than similar workers in non-RTW states, which translates to $1,670 less per year for a full-time worker. RTW laws have always been intended, first and foremost, to prevent workers from successfully organizing.
The workers at the UAW campaign in Alabama experienced a full-court press from the state and the company. In the run-up to the election, Governor Kay Ivey joined five other Southern Republican governors in issuing a statement warning that “unionization would certainly put our states’ jobs in jeopardy.” This was part and parcel with the South’s long history of anti-union efforts motivated by racial animus. While the statement rebuked the UAW for supposed “scare tactics,” it was Ivey who made the most of scare tactics, signing a law during the union campaign to punish companies that voluntarily agree to work with unions.
Mercedes subjected workers to a constant barrage of “captive audience” meetings where anti-union talking points and videos were repeated ad nauseam (at least seven states have banned captive audience meetings in order to protect workers’ freedom of thought and association). Mercedes workers report that company management targeted team leaders, who often have hopes of promotion, and applied daily pressure to get them to change their minds and vote against the union.
Focusing solely on the anti-union efforts of Alabama and Mercedes, however, misses a vital point: Even when workers lose union elections, they can still win substantial improvements in their working conditions. Just a month after the UAW announced that 30% of Mercedes workers had signed union cards, the company gave a $2-per-hour raise to the highest-paid workers, and eliminated the two-tier wage system that had prevented many workers from reaching that higher pay level. The company also fired its longtime U.S. CEO, ridding the workers of an unpopular boss. The new CEO made promises to “create a culture that puts you [the workers] first” and to “make decisions that are in your best interest.” If the company doesn’t live up to its promises, the workers may try again and win, just like workers did at Volkswagen’s Chattanooga, Tennessee, plant earlier this year.
Vouchers undermine efforts to provide an excellent public education for all
Since the early 2000s, many states have introduced significant voucher programs to provide public financing for private school education. These voucher programs are deeply damaging to efforts to offer an excellent public education for all U.S. children—and this is in fact often the intention of those pushing these programs. In this post we argue that:
- Public education is worth preserving—it should be seen as one of the most important achievements in our country’s history and crucial for the social and economic welfare of future generations.
- The economic logic behind voucher programs is weak; it rests on ideological commitments to markets over public provision of goods and services, even in realms of activity where the virtues of markets do not hold—like public education.
- Most damagingly, introducing significant voucher programs has gone hand in hand with steep declines in public school spending relative to states that have not adopted these policies.
- This spending stagnation has had profound effects in generating larger “adequacy gaps” in school funding in voucher states.
- Paradoxically, even while they take resources away from public schools, many newly introduced voucher programs could result in more total state spending in coming years.
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- This would be a particularly perverse result given the expansive research literature showing that vouchers do not improve educational outcomes. In essence, states that have introduced large-scale voucher programs are looking to substitute a more expensive and less effective system for educating kids than public education. The only reason for this policy thrust is ideology rooted in hostility to public education.
Background on public education and the voucher debates
Universal public education was perhaps the most important reason why the United States became the richest country in the world in the 20th century. As Claudia Goldin, the most recent Nobel Prize winner in economics, has written:
At the dawn of the twentieth century the industrial giants watched each other cautiously. The British sent high-ranking commissions to the United States and the United States sent similar groups to Britain and Germany. All were looking over their shoulders to see what made for economic greatness and what would ensure supremacy in the future… Earlier delegations focused on technology and physical capital. Those of the turn-of-the-century turned their attention to something different. People and training, not capital and technology, had become the new concerns…For the twentieth century to become the human capital century required vast changes in educational institutions, a commitment by governments to fund education, a readiness by taxpayers to pay for the education of other people’s children, a belief by business and industry that formal schooling mattered to them, and a willingness on the part of parents to send their children to school (and by youths to go). The transition occurred first in the United States and was accompanied by a set of “virtues” or principles, many of which can be summarized by the word “egalitarianism.”
In the 21st century, unfortunately, too many policymakers seem determined to squander this legacy by starving public education of money and legitimacy, often in the name of “school choice.” Their central claim (when they bother to make one with any clarity) is that public provision of goods or services is ineffective by definition and that a dose of private, market-like competition will lead to better schooling outcomes for the nation’s children.
Average wages have surpassed inflation for 12 straight months
Average hourly wage growth has exceeded inflation for 12 straight months, according to new Bureau of Labor Statistics data released this morning. This real (or inflation-adjusted) wage growth is a key indicator of how well the average worker’s wage can improve their standard of living. As inflation continues to normalize, I’m optimistic more workers will experience real gains in their purchasing power.
The dark blue line in the figure below plots year-over-year real hourly wage changes for all private-sector workers.
Average real wages rise for 12 straight months as prices decelerate faster than nominal wage growth: Year-over-year changes in nominal wages, inflation, and real (inflation-adjusted) wages, 2019 to 2024
| date | Nominal wage growth | Real wage growth | Inflation |
|---|---|---|---|
| 2019-01-01 | 3.2% | 1.6% | 1.6% |
| 2019-02-01 | 3.6% | 2.0% | 1.5% |
| 2019-03-01 | 3.5% | 1.6% | 1.9% |
| 2019-04-01 | 3.2% | 1.2% | 2.0% |
| 2019-05-01 | 3.3% | 1.4% | 1.8% |
| 2019-06-01 | 3.4% | 1.7% | 1.6% |
| 2019-07-01 | 3.4% | 1.6% | 1.8% |
| 2019-08-01 | 3.4% | 1.6% | 1.7% |
| 2019-09-01 | 3.1% | 1.4% | 1.7% |
| 2019-10-01 | 3.1% | 1.4% | 1.8% |
| 2019-11-01 | 3.3% | 1.2% | 2.1% |
| 2019-12-01 | 3.0% | 0.7% | 2.3% |
| 2020-01-01 | 3.1% | 0.6% | 2.5% |
| 2020-02-01 | 3.0% | 0.7% | 2.3% |
| 2020-03-01 | 3.5% | 1.9% | 1.5% |
| 2020-04-01 | 8.0% | 7.7% | 0.3% |
| 2020-05-01 | 6.7% | 6.6% | 0.1% |
| 2020-06-01 | 5.1% | 4.4% | 0.6% |
| 2020-07-01 | 4.9% | 3.8% | 1.0% |
| 2020-08-01 | 4.8% | 3.4% | 1.3% |
| 2020-09-01 | 4.8% | 3.3% | 1.4% |
| 2020-10-01 | 4.6% | 3.4% | 1.2% |
| 2020-11-01 | 4.5% | 3.3% | 1.2% |
| 2020-12-01 | 5.4% | 4.0% | 1.4% |
| 2021-01-01 | 5.2% | 3.8% | 1.4% |
| 2021-02-01 | 5.3% | 3.6% | 1.7% |
| 2021-03-01 | 4.5% | 1.8% | 2.6% |
| 2021-04-01 | 0.7% | -3.4% | 4.2% |
| 2021-05-01 | 2.3% | -2.6% | 5.0% |
| 2021-06-01 | 3.9% | -1.4% | 5.4% |
| 2021-07-01 | 4.3% | -1.0% | 5.4% |
| 2021-08-01 | 4.4% | -0.8% | 5.3% |
| 2021-09-01 | 4.9% | -0.5% | 5.4% |
| 2021-10-01 | 5.5% | -0.7% | 6.2% |
| 2021-11-01 | 5.4% | -1.3% | 6.8% |
| 2021-12-01 | 5.0% | -1.9% | 7.0% |
| 2022-01-01 | 5.7% | -1.7% | 7.5% |
| 2022-02-01 | 5.3% | -2.4% | 7.9% |
| 2022-03-01 | 5.9% | -2.4% | 8.5% |
| 2022-04-01 | 5.8% | -2.3% | 8.3% |
| 2022-05-01 | 5.6% | -2.8% | 8.6% |
| 2022-06-01 | 5.4% | -3.3% | 9.1% |
| 2022-07-01 | 5.5% | -2.8% | 8.5% |
| 2022-08-01 | 5.4% | -2.6% | 8.3% |
| 2022-09-01 | 5.1% | -2.8% | 8.2% |
| 2022-10-01 | 5.0% | -2.6% | 7.7% |
| 2022-11-01 | 5.1% | -1.9% | 7.1% |
| 2022-12-01 | 4.9% | -1.5% | 6.5% |
| 2023-01-01 | 4.6% | -1.7% | 6.4% |
| 2023-02-01 | 4.7% | -1.2% | 6.0% |
| 2023-03-01 | 4.6% | -0.4% | 5.0% |
| 2023-04-01 | 4.7% | -0.3% | 4.9% |
| 2023-05-01 | 4.6% | 0.5% | 4.0% |
| 2023-06-01 | 4.7% | 1.6% | 3.0% |
| 2023-07-01 | 4.7% | 1.4% | 3.2% |
| 2023-08-01 | 4.5% | 0.8% | 3.7% |
| 2023-09-01 | 4.5% | 0.8% | 3.7% |
| 2023-10-01 | 4.3% | 1.0% | 3.2% |
| 2023-11-01 | 4.3% | 1.1% | 3.1% |
| 2023-12-01 | 4.3% | 0.9% | 3.4% |
| 2024-01-01 | 4.4% | 1.2% | 3.1% |
| 2024-02-01 | 4.3% | 1.1% | 3.2% |
| 2024-03-01 | 4.1% | 0.6% | 3.5% |
| 2024-04-01 | 3.9% | 0.5% | 3.4% |
Source: EPI analysis of Bureau of Labor Statistics Current Employment Statistics and Consumer Price Index public data series.
Year-over-year real wage changes measure the percent change in wages in one month compared with the same month a year prior. Monthly or even quarterly changes in wages are notably more volatile. While shorter-term measures are valuable to capture very recent changes, this year-over-year measure provides a more stable and longer-term perspective on the state of real wage growth.
As the figure shows, average real wages rose sharply at the onset of the pandemic, but that’s because the bottom dropped out of the labor market when millions of lower-wage workers lost their jobs. Average real wages then fell sharply in the pandemic recovery as many of those lower-wage workers returned to work, pulling down the average. Real wage growth continued to decline as inflation rose steadily due to supply chain bottlenecks and shifts in consumer demand. As quickly as inflation rose—peaking at 9.1% in June 2022—it fell, hitting 3.0% in June 2023.
Nominal wage growth is the year-over-year growth in wages, not adjusted for inflation. The Federal Reserve looks at that measure for signs of wage-driven inflationary pressures. What’s clear is that nominal wage growth has been steadily decelerating over the last two years, as shown in the lightest blue line in the figure. The latest data find nominal wage growth at 3.9%, just a bit above the 3.5% long-run target for wage growth that is consistent with the Fed’s inflation target (2.0%) plus productivity growth (likely around 1.5%).
While nominal wage growth is an important indicator for Fed policymakers to measure signs of labor market slack and inflationary pressures (and these remain relatively muted), real wage growth is what matters for workers’ living standards. On average, the data are clear: wages have been beating inflation for 12 months now.
Looking beyond the average, production/non-supervisory workers—roughly the bottom 82% of the wage distribution—started seeing positive real wage growth two months earlier in March 2023, now 14 months in a row (not shown). It’s not surprising that those more moderate-wage workers experienced faster wage growth as other research has shown that lower-wage workers had the strongest wage growth during the pandemic, which is quite unusual in recent U.S. history. These gains for workers are encouraging—and something I hope continues.
Operation Dixie failed 78 years ago. Are today’s Southern workers about to change all that?
Volkswagen workers’ decisive recent union election victory in Chattanooga, Tennessee, makes them the first Southern U.S. auto workers to unionize a foreign-owned auto factory. Their success could also mark a historic turning point for generations of Southern workers seeking to improve their jobs and transform their states’ economies.
There are also signs that vigorous enforcement of federal labor law and other pro-worker federal policies, bolstered by the Biden administration, are contributing to a more level playing field for workers attempting to organize in the South.
But a long history of exploitation will take a strong, national labor movement to overcome. For decades, Southern state governments have promised corporate employers the opportunity to profit from the exploitation of local workers. The promise has hinged on a package of state policies designed to enrich the powerful few and maintain economic and racial inequalities, at the expense of all workers. As detailed in a new series of EPI reports, this Southern economic development model has been characterized by low wages, low corporate taxes, lax regulation of businesses, and extreme hostility toward unions.
Despite this hostility, generations of Southern workers have fought to organize unions, at times achieving important but limited success. More often, intense employer repression of unions has blocked or crushed Southern workers’ organizing efforts, while state lawmakers have enacted policies to restrict collective bargaining rights in the South. As a result, Southern states have some of the lowest rates of union coverage in the country. Figure A shows that, while union coverage rates stand at 11.2% nationally, rates in 2023 were as low as 3.0% in South Carolina, 3.3% in North Carolina, 5.2% in Louisiana, and 5.4% in Texas and Georgia.
Less than 10% of workers have union coverage across most of the South: Union coverage rate for the U.S. and for Southern states, 2023.
| Geography | Share of workers covered by a union contract |
|---|---|
| South Carolina | 3.0% |
| North Carolina | 3.3% |
| Louisiana | 5.2% |
| Georgia | 5.4% |
| Texas | 5.4% |
| Virginia | 5.6% |
| Arkansas | 5.8% |
| Florida | 6.1% |
| Tennessee | 6.9% |
| Oklahoma | 7.7% |
| Alabama | 8.6% |
| Mississippi | 9.8% |
| Delaware | 10.1% |
| West Virginia | 10.1% |
| District Of Columbia | 10.4% |
| United States | 11.2% |
| Kentucky | 11.3% |
| Maryland | 12.8% |
Note: Union coverage refers to share of workers who are members of a union or represented by a union contract.
Source: Bureau of Labor Statistics Union Members - 2023.
Perhaps the most ambitious of past efforts to organize Southern workers was Operation Dixie, launched 78 years ago this month, when multiple unions committed to organizing millions of workers in major Southern industries. Though well-resourced and determined, the unions that embarked on Operation Dixie were ultimately defeated by Southern economic and political elites, who used state power to assist employers in opposing unions while stoking racism to divide Black and white workers.
The failure of Operation Dixie allowed Southern elites to further entrench racism and exploitation in state economic policies for subsequent generations. Today, however, emerging successful efforts to organize Southern workers—despite familiar opposition from employers and Southern Republican elected officials—suggest that the present could be a new moment of opportunity for workers to build the collective power necessary to upend the failed Southern economic development model.
Tight labor markets are essential to reducing racial disparities and within the purview of the Fed’s dual mandate
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This essay was originally published in the Point/Counterpoint section of the Journal of Policy Analysis and Management and can be accessed at https://doi.org/10.1002/pam.22545.
Key findings
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Growing evidence shows that monetary policy decisions have a measurable impact on racial disparities in the labor market. This evidence challenges long-held beliefs about the purview of the Federal Reserve (“the Fed”)’s mandate and the limits of macroeconomic policy. These findings deserve serious consideration as the Fed begins review of its monetary policy framework.
- Monetary policy decisions can help sustain tight labor markets, which can significantly reduce the Black unemployment rate and narrow the Black-white unemployment rate gap.
- In addition, tight labor markets have great potential to reduce racial wage inequality by boosting bargaining power and supporting faster wage growth for Black and low-wage workers.
- In recent years, tight labor markets have facilitated greater racial equity and increased economic security for Black Americans without triggering a corresponding spike in inflation.
How to fix it
Proposals to make racial equity a more explicit consideration of the Fed include having Congress require the Fed chair to report on racial gaps in employment and wages, and the actions being taken to reduce them. The Fed can also center equity by engaging in research on the causes of the racial gaps.
Racial disparities in unemployment are a defining feature of the U.S. labor market. Since the U.S. Bureau of Labor Statistics (BLS) began reporting a Black unemployment rate in 1972, it has consistently been about double the white unemployment rate. On average, since unemployment rates decline with increasing levels of education, racial disparities in unemployment have commonly been attributed to observed racial differences in educational attainment or skills. However, the persistent 2-to-1 Black-white unemployment ratio is largely unexplained by observable factors like education or skills. In fact, the 2-to-1 ratio between Black and white unemployment rates exists at each level of education, across age cohorts, and for men and women, suggesting that broader structural factors, including racial discrimination and unequal bargaining power, lie at the root of persistent inequality in labor market outcomes between Black and white Americans.
The persistence of the Black-white disparity in unemployment makes it an ideal target for equity-focused policymaking. However, the idea that the unemployment rate gap is largely the result of a Black-white human capital gap has dominated decisions about the appropriate policy levers for closing the gap. As a result, most interventions focus on individual acquisition of additional skills or education rather than removing structural barriers to more equitable outcomes. This human capital-centered approach also undergirds the long-standing view that narrowing racial disparities in unemployment is outside the purview of the Federal Reserve (“the Fed”)’s legal mandate to maximize employment while maintaining price stability.
Class of 2024: Young college graduates have experienced a rapid economic recovery
Key findings:
- Following the pandemic economic shock, young college graduates have experienced a much faster bounceback in the labor market and stronger wage growth than any recovery in recent history.
- The unemployment rate for college graduates—defined as workers ages 21 to 24—has recovered more than 2.5 times faster than the aftermath of the Great Recession of 2008–09 (3.3 years versus 8.5 years). Meanwhile, their underemployment rate has recovered in 2.25 years after the onset of the pandemic but never fully recovered following the Great Recession.
- Young college graduates experienced 2.2% real wage growth between February 2020 and March 2024.
- Racial and gender wage gaps remain large even among college graduates beginning their careers. On average, women are paid $5.30 less per hour than their male counterparts, while Black and Hispanic workers are paid $3.24 and $2.07 less per hour, respectively, than white workers.
The labor market for young college graduates today is stronger than it was before the pandemic and has been for quite some time. This strong recovery was not guaranteed—instead, it was a direct result of an aggressive fiscal policy response to the pandemic’s economic shock. This bounceback—not just for young college graduates but for all workers—has been much faster than recoveries following recessions over the past 30 years, when fiscal policy was not used at scale.
In this blog post, we first examine employment and enrollment outcomes to determine what young college graduates are doing. We then analyze the short- and long-run trends in unemployment, underemployment, and wages for young college graduates—defined as workers ages 21 to 24—with only a four-year college degree and who are not enrolled in further schooling.1
Cities and counties might be at risk of losing billions if they don’t obligate American Rescue Plan funds correctly: Advocates should pay close attention to the 2024 obligation deadline
State and local governments have until December 31, 2024, to “obligate” the State and Local Fiscal Recovery Funds (SLFRF) they received as part of 2021’s American Rescue Plan Act. Community partners and other stakeholders are concerned that some recipient governments will not obligate their full allotment of funds, perhaps through misunderstandings of the rules. With time running short, it is imperative that advocates take steps to encourage governments in their area to make certain they have obligated the funds correctly.
State and Local Fiscal Recovery Funds have helped fuel today’s strong economy
State and local governments received $350 billion in funding through SLFRF. Unlike most federal money, which is routed to cities and counties through state agencies or the state legislature, the funds were given directly to every state and local government. The rules put out by the U.S. Treasury Department gave those governments great flexibility to make spending choices that met their particular needs.
The result has been myriad instances of innovative, equity-enhancing uses of SLFRF—from providing premium pay for frontline workers to building community-run grocery stores in food deserts to protecting tenants from unjust evictions with the right to counsel. These investments have helped boost our economy: Whereas it took nearly a decade to restore levels of public services following the Great Recession, state and local governments have already fully recovered the jobs lost during the pandemic.
The looming obligation deadline and what it means
State and local governments will be “required to return to Treasury any SLFRF funds that have not been obligated by the obligation deadline of December, 31, 2024,” according to Treasury’s rules. They have until December 31, 2026, to spend their allocated SLFRF.
In conversations with advocates, community organizations, labor unions, stakeholders, and policymakers, there are widespread concerns that many recipient governments will not make this obligation deadline, either because they may not realize the full meaning of “obligation” or because they will not act quickly enough.
Obligation means “an order placed for property and services and entering into contracts, subawards, and similar transactions that require payment.” That is to say, obligating funds requires taking specific steps to ensure the money is used as intended, and that those decisions are memorialized in a contract or subaward or some other documented fashion. Passing a budget that allocates SLFRF to a specific purpose—on its own—is insufficient to constitute obligation.
Waffle House strike highlights the harms of the Southern economic development model
In March, workers at the Waffle House in Conyers, Georgia, went on strike. It’s not difficult to see why: They are paid wages as low as $2.90 per hour before tips, with a $3.00 per shift “meal credit” taken from their already meager wages regardless of whether they have eaten a meal at the restaurant.
But that is not all—worker safety is also at issue. Waffle House workers report working in dangerous environments and point to the constant threat of violence and the lack of trained security in the restaurants. Unfortunately, it is not uncommon for customers to start fights with or to attack workers. Waffle House staff is expected to deescalate these fights and call police rather than the store ensuring their safety and the safety of other customers. There are also robberies—one Waffle House worker was shot and killed during an armed robbery in Tifton, Georgia.
The free market won’t solve our nationwide housing affordability problem: Equity-focused policy is the solution
Access to affordable housing is integral to economic security, and homeownership is often a precondition for economic mobility. Sadly, the prospect of homeownership remains increasingly elusive for potential homebuyers due to high home prices and interest rates. Prospective Black buyers face additional obstacles, including the burden of student loan debt and discrimination in mortgage lending.
The rising cost of homeownership is also having spillover effects in the rental market as more families have had to resort to renting, thus increasing the demand and prices for rental units. The primary issue leading to America’s housing crisis—for buyers and renters—is a shortage of affordable housing that has major implications for equitable access to shelter and wealth.
Outlining the problem
In Figure A, the Consumer Price Index (CPI) for rent of primary residence reveals a significant surge in the cost of renting across U.S. cities over time. Since 2009, the cost of rent has climbed 67%—with nearly half of that increase occurring in the last five years. The cost of rent has increased faster than the cost of most consumer goods. Such a steep increase underscores the mounting financial burden on renters and the challenges they face in securing affordable housing.
The problem of rising rent is most acute in growing metro areas with a greater concentration of employment opportunities. The result is lower-income workers and their families are being pushed further out into the suburbs where they face longer commutes and higher transportation costs, while families who remain in the cities find housing costs are consuming more of their monthly income as the threat of eviction and homelessness rise.