UNION WEEK: BUILDING WHOSE WEALTH, WHERE?

First off, I want to second John Etorre's recommendation (in the comments on my last entry) to read this article in Sunday's New York Times Magazine.

Now for the question: Why does it matter that so many Cuyahoga County jobs pay too little to support a family, with some money left over for savings?

The conventional answer is that it's not fair. People who work full time should be able to get ahead. Hard work should earn a piece of the American Dream -- a house, a vacation, a step up the ladder for the kids. Wal-Mart wages foster inequality and violate our sense of equity.

Of course I agree with this answer. Maybe you do, too. But let's be frank: "fairness" has a pretty small constituency among Cleveland's movers, shakers and talkers -- even those proud liberal Dems who make a point of visiting a union hall every year or two. "Fairness" sounds so... redistributionist. And we all know that creating wealth, not redistributing it, is where it's at.

So let's talk about low wage jobs and community wealth building.

In general, a community gains wealth to the extent that a) its members create economic value, and b) the economic value created by its members becomes their income. The fact that it's made here is no reason to assume it stays here. Money that's made by business activity in northeast Ohio, but ends up in accounts in Texas, London, or Shanghai, is not "Cleveland wealth".

But money that flows from local business activity to local workers is Cleveland wealth. It circulates back into local stores, pays local rents and mortgages, supports local churches. Most important -- if there's enough of it, it enables the earners' families to save and invest. It allows them to build retirement accounts, acquire home equity, start small enterprises, pay tuitions. It takes earners' families beyond subsistence and empowers them to start creating new value on their own... if there's enough of it.

From an economic development standpoint, the worst part of Cleveland's increasing dependence on low-wage occupations is that we get the poverty, while the profits -- the asset additions of shareholders and top managers -- mostly go elsewhere.

Look again at the list of low-wage occupations in Cuyahoga County. Where do these people work? Where are the new openings for unskilled and semi-skilled workers in the Cleveland job market?

Retail (cashiers, sales). The Cleveland Yellow Pages lists fifteen "department stores" with more than one location. For some reason they don't include Kaufmann's, Sears or Marc's, but add these in and you get about 110 stores under eighteen names. Of these only Marc's, with 24 locations, is owned and operated locally. Count the men's and women's apparel stores with four or more addresses, and you find another thirteen chains operating here, of which just two -- Dot's and Diamond -- are northeast Ohio companies. That's thirty-one significant chain retailers selling adult clothing (among other things) in Cleveland-area malls and strip centers -- and only three firms are controlled by local managers and investors.

Think about the rest of the familiar names at the mall -- shoe chains, toy chains, consumer electronics, office supplies, etc. -- and you'll see the same thing. In the convenience store niche, Dairy Mart of Hudson is now owned by a Canadian company and competes with 7-Eleven of Texas and Convenient Food Marts of Chicago. Our big two supermarkets, Tops and Giant Eagle, are now headquartered in New York and Pennsylvania, respectively -- leaving only Dave's and Heinen's here. Even the drugstore market, with two strong local players (Medic and Discount), is increasingly dominated by CVS (Rhode Island) and Walgreen's (Illinois).

Hospitality (housekeepers, counter clerks.) There are no locally owned downtown hotels, and few if any in the region. Marriott (Maryland) and Hilton (California) together own almost 2,000 of the 3,800 hotel rooms downtown. I could go on, but you know the other names as well as I do.

Restaurants (waiters, bartenders, dishwashers, etc.) Okay, this is more mixed and harder to track down, and there's more local franchising of national brands. But a quick tour of the malls and interchanges will confirm the increasing dominance of national chains in this market as well. And with fast food outlets, national brands are the whole ball game.

Well, I could go on, but you get the point. The companies that employ the largest number of Cuyahoga County's lowest-wage workers are not, for the most part, locally owned or managed. Their CEOs don't bring their seven- and eight-figure salaries home to Cleveland suburbs. Their investors are elsewhere -- in most cases, spread throughout the stock-owning world. The people who run their northeast Ohio operations are middle managers, not movers and shakers, and they bring the region neither wealth nor clout.

In other words, the only way these national retailers, hotels, restaurant and fast food chains (and movie chains, and food service companies, etc. etc.) are going to increase the wealth of this community is by leaving more money here. There's absolutely no regional logic to helping WalMart, Target or Marriott increase their Cleveland market shares, and send more money back to head offices elsewhere, by paying subsistence wages to local workers.

Which is why it's in the interest of the whole region to have more of those workers organized, and bargaining effectively (i.e., collectively) to keep a bigger share of the value they help to create.

That's what unions are for. Whatever you may think of specific unions, or the labor movement's role in politics or the community, there's no more effective way for wage workers to get bigger slices of the pies they help to bake. For undervalued workers, their families and immediate communities, union organization is one of the most effective economic development tools available.

In Cleveland's present circumstance -- needing to build wealth and jump-start enterprise at every level, but smothered in subsistence-wage chain outlets that generate profits everywhere but here -- the unionization of low-wage workers should be welcomed by virtually everybody. Yes, even the Greater Cleveland Partnership, the Convention and Visitors Bureau and the guys at Baker Hostetler.

I'm not saying that unionization is appropriate in every Cleveland workplace, or that there aren't rational reasons for some employers (and workers) to avoid it, or that unions aren't sometimes as dumb and backward-looking as the rest of us. Like many a union loyalist (see the NYT article linked at the top of this entry), I'm sure the labor movement needs to re-think its roles and strategies on many fronts.

But support for collective bargaining to get living wages for local residents at places like WalMart, Marriott, the national food and building service companies, the big restaurant chains? From the standpoint of building wealth and reducing poverty in greater Cleveland, this is just a no-brainer.