Can Labor Revive the American Dream?

The financial markets are in tatters, consumer spending is anemic and the recession continues to deepen, but corporate America is keeping its eyes on the prize: crushing organized labor. The Center for Union Facts, a business front group, has taken out full-page ads in newspapers linking SEIU president Andy Stern to the Rod Blagojevich scandal. The Chamber of Commerce is capitalizing on the debate over the Big Three bailout to claim that "unions drove the auto companies off the cliff," while minority leader Mitch McConnell and other Republican senators insist on steep wage cuts. A December 10 Republican strategy memo revealed their central obsession: "Republicans should stand firm and take their first shot against organized labor," the memo read. "This is a precursor to card check" -- a clear reference to the Employee Free Choice Act.

In the lead-up to the election, the co-founder of Home Depot, Bernie Marcus, called Employee Free Choice "the demise of civilization." Wal-Mart summoned store managers into mandatory meetings to warn them against it. Industrial launderer Cintas launched a website to oppose it. The retail industry associations paid blue-chip lobbying firms to block it. The Chamber of Commerce hired Bush Labor Secretary Elaine Chao's chief of staff to run its opposition campaign, which trashed the bill as antidemocratic because it allows workers to bypass a formal election. Business groups spent tens of millions on ads attacking Democrats in tight Senate races, including $5 million targeting challenger Jeff Merkley of Oregon, a supporter of the bill who was smeared with a mailer accusing him of doing the bidding of corrupt labor leaders and trailed at every campaign appearance by a grim reaper claiming "Merkley kills democracy." "I've never seen anything like it," says Merkley's campaign manager, John Isaac, "where a group spent so much money to insert their issue into a campaign."

At first glance, Employee Free Choice looks like little more than a technical fix. In addition to allowing unionizing through majority sign-up, it stiffens penalties for intimidating or firing union supporters and imposes arbitration when a company refuses to bargain a first contract. But as the leading corporate lobbies recognize, the bill could have far-reaching effects. By reviving unions, it could push up wages, realigning the broken economy so that company profits are spread beyond CEOs. It could help rein in corporate power and, perhaps most threatening to a business community that has enjoyed decades of deregulation, sustain a progressive majority in Washington in the years to come. If progressives aren't doing the math, conservatives are. "Unions don't spend money to elect Republicans," Senator John Ensign told a group of executives this past fall. "They spend money to elect Democrats. From our perspective, this would have devastating consequences."

Throughout his run for president, Obama was explicit in his support for Employee Free Choice and his understanding of the forces arrayed against it. "If a majority of workers want a union, they should get a union; it's that simple," he told union members in Pennsylvania in April. "Let's stand up to the business lobby." Since his election, he's sent other friendly signals: supporting a factory takeover by pink-slipped glass workers in Chicago and tapping Representative Hilda Solis as labor secretary. While her predecessor stacked the labor department with experienced unionbusters and gutted regulations and workplace safety inspections, Solis has been a regular on Los Angeles picket lines and pushed a minimum-wage hike into law as a state legislator. Significantly, she made an impassioned plea from the House floor for the Employee Free Choice Act.

But the business lobby Obama once railed against is now giving him a taste of its wares. The Chamber denounced the bill in op-eds as "payback" to "union bosses" that would signal the end of "workplace democracy" and the advent of "Soviet-style thuggery." All the big industry associations called press conferences to declare war. "This will be Armageddon," one top Chamber official said of the battle ahead. Another pointedly warned Obama against "picking a fight right away on a major, titanic clash." Obama's advisers got the memo. At a November gathering of CEOs, Rahm Emanuel refused to answer a question about the bill, and that same month economic adviser Jennifer Granholm called it "divisive." Obama recently restated his commitment to ending the "barriers and roadblocks" to unionization but avoided any reference to the bill itself. "The Chamber is fanning the flames on this, saying this is the epic battle between labor and business," says a key strategist working to pass the measure, "and it scares the shit out of the Obama people and some of the Democrats."