Unions can shrink the growing wealth gap

Posted: June 11, 2012

One of the most destructive trends in our nation today is the growth of income inequality. The increasing concentration of wealth, the shrinking of the middle class, and the growing number of people who are working but still poor threaten prosperity and undermine democracy.

The frustration about this is palpable among many in my district. But the problem is so vast that many aren't sure how it can be addressed. Unions, it turns out, are part of the answer.

I recently learned of a struggling working mother in my district. Kobra Oden works as a contracted security officer at a hospital. She is dedicated to her job and works hard. But after six years in her position, her wages are under $10 an hour, and her health benefits are minimal.

Oden is doing everything right. But she says she is always behind on her bills and rent, and she struggles to meet her family's basic needs.

She is not alone. Private security officers are paid 49 percent less than the average Philadelphia worker. They are twice as likely as the average worker to rely on public assistance for health care; nearly 40 percent have no coverage at all.

This is true even though the security firms that employ these officers are among the largest service-industry employers in the city, and the largest security companies in the country.

But there are signs of change. Nearly 3,000 men and women working in private security in Philadelphia are taking a stand for decent wages and benefits. They have chosen to join Local 32BJ of the Service Employees International Union and demand the kind of compensation that will allow them to climb out of poverty, support their families, and live with dignity.

By raising the standards for wages and benefits across the industry, security officers and Local 32BJ will help the city. Even if their wages go up only enough to keep the average officer with two children off food stamps, that would mean an additional $140 million for security officers and their families over the next 10 years. The economic benefit to the city would be even greater, as security officers and their families would have more money to spend on rent and at local businesses and to contribute through taxes. A multiplier used by University of Pennsylvania researchers shows that security officers with decent wages and benefits could generate more than $230 million in economy activity over the next decade.

That is an enormous benefit, but consider how much greater it could be if the private security field serves as a model for other service industries. Service jobs accounted for 41 percent of employment in the city in 2010, up from 27 percent in 1980. Over that period, the number of manufacturing jobs dropped from 31 percent of the total to 13 percent.

The problem is that many service jobs pay too little for families to reach the middle class. According to a Pew Charitable Trusts report, nearly half of Philadelphia residents make less than $35,000 a year.

Private security officers are showing how unionization can change that. If other workers follow their lead, the impact could be huge. A 2007 study found that greater income as a result of unionization created $11 billion in economic activity and 64,800 jobs in Los Angeles.

We can stop the growth of income inequality. Getting decent wages and benefits for service workers is one important way to do that.

Bob Brady is a Democratic congressman representing parts of Philadelphia and Delaware County.

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