Guaranteed Income and Worker Power: the Power of a Permanent Strike Fund

10. 20. 2021

What we are witnessing is a real-life example of how stronger unions can coexist alongside a strong government-provided safety net.

Around the country, tens of thousands of workers are contemplating strikes as they collectively demand higher wages, better safety and conditions, and fight cuts, and many more are working to build unions to give them the ability to collectively bargain. This incredible moment may, in part, be a result of the unprecedented level of government cash support during the turmoil and crisis of the past 18 months.

When the pandemic forced an economic shutdown, our government stepped in and provided roughly $850 billion in unrestricted cash payments to all but the wealthiest households. The stimulus checks, increased unemployment insurance, and newly expanded Child Tax Credit have all put cash in the pockets of millions of Americans, effectively piloting a guaranteed income program during a time of economic and emotional upheaval, unlike anything our generation has ever seen.

As workers returned to their jobs, decades of stagnant wages and fissuring of workplaces clashed with a global pandemic, a lack of childcare, and a national reckoning with more than half a million American lives lost. At this inflection point, many workers who long struggled to find financial security were buoyed by government intervention. As we reflect on what we’ve lost, we recognize that many workers were determined to reset the scales and demand a rebalancing of power, and the relative economic cushion provided by government may support this call for change.

The government’s pandemic response has, of course, been far from perfect. But, the government’s fiscal policy successes are important to recognize. During a crisis in which several hundred thousand Americans died and the unemployment rate reached 14.8%, the highest rate since data collection began in 1948, poverty in the United States fell and disposable income (money available to spend by individuals and households) surged in the second quarter of 2020. Separate studies at Columbia University and the Urban Institute project that poverty in 2021 will be the lowest on record. The Urban Institute estimates that the unprecedented combination of federal government programs in the American Rescue Act intervention — a combination of stimulus checks, increases to unemployment benefits, and an expanded Child Tax Credit — will keep 12.4 million Americans out of poverty in 2021.

Despite what seems to be an unmitigated win — our government giving residents the support they need in a crisis and reducing hardship at the same time — the influence of anti-government ideology remains strong. Many of the programs that boosted incomes during the pandemic are coming to an end. Republican governors prematurely cut off extended federal unemployment benefits, and Republicans in Congress — and even some Democrats — oppose making the expanded Child Tax Credit permanent, threatening to undo the historic gains.

Besides the usual reasons Republicans have for opposing successful government programs that help people, they and their big business supporters are also motivated to oppose guaranteed income because it gives workers a means for survival outside of the job market, breaking a dependency on a job-at-any-wage that, even in small ways, shifts the balance of power away from employers and to their workforces. Indeed, working people’s lack of leverage in the job market is what has allowed big business to accumulate staggering levels of wealth while wages for the working class remain flat. It suggests that if guaranteed income and a stronger safety net, in general, were a permanent feature of our economy, it might empower workers to organize and demand better pay and working conditions because their bosses have less control over their basic survival.

It may be too early to draw conclusions about how an expanded safety net and early iterations of a guaranteed income increase worker power but there is evidence emerging that low-wage workers have leveraged the expanded safety net — a combination of unemployment insurance, cash payments, and tax credits — to improve their wages and working conditions. Average hourly real wages for retail workers are up approximately 4.6% from two years ago after decades of stagnation. If workers cannot get better wages from their existing employer, they are quitting to find better-paying work elsewhere. This spring and summer, the media was awash with stories labeling this period the Great Resignation. More than 3% of workers in the private sector quit their jobs in April which was the highest rate since the government started collecting the data two decades ago. Low-wage workers are quitting at higher rates: 5.3% of workers in leisure and hospitality and 4% of workers in retail quit in May.

Meanwhile, unions are also becoming more popular. Unionized workers, because they have a voice in the workplace and negotiated with employers to save jobs, had more job security during the pandemic than non-unionized workers. This, along with decades of stagnant wages and grotesque inequality, is fueling workers’ demands to join unions.

In 2020, 65% of all Americans said they would join a union if they could, up from 45% in 2018. According to the Cornell Institute of Labor Relations, there have been 442 labor actions at workplaces this year alone, up from 172 all last year and 52 in 2019. But unions will not flourish unless we reform our anti-worker labor laws. Passing the PRO Act, and providing a path to unionization for those not covered by the PRO Act (like the millions of home health care workers), could turbo-charge worker organizing.

As leaders from organizations that fight for workers’ rights, build the power of low-income people, especially people of color, and build economic power for all Americans, we are especially interested in how the current moment is an opportunity to shift power in our economy. Our organizations — Economic Security Project, Community Change, and Jobs With Justice — have partnered with the Association of Flight Attendants-CWA on a project to explore the role a robust cash safety net — one that includes guaranteed income — has on building worker power and reshaping our economy towards justice.

We don’t yet know all of the answers about the link between a stronger safety net and worker power, but what we are witnessing does provide real-life examples of how workers and families would experience a post-neoliberal economy where stronger unions alongside a strong government-provided safety net can ensure power and prosperity for all. Unions and a strong safety net are both necessary poles in a mutually reinforcing dynamic of growing worker power and political support for an expansive role for government that provides an economic foundation for all families and communities. And our organizations are committed to learning more about how to get there together.

Natalie Foster is the co-chair and co-founder of the Economic Security Project and a senior fellow at The Aspen Institute Future of Work Initiative

Dorian T. Warren is the president of Community Change, co-chair of the Economic Security Project, and co-host of System Check.

Erica Smiley is the executive director of Jobs With Justice.