With the United States firmly in its second Gilded Age, the creators of this period of epic income inequality, growing racial violence, and undermining of our democratic institutions are already beginning to pass from the scene. One of these is Jack Welch, who died last week at the age of 84. Most of the national obituaries of Welch focused on his outsized personality and aggressive management style. Those things did help change the trajectory of American capitalism, but the obituaries left out or downplayed Welch’s greatest impact in shaping the unequal and unfair America of today: unionbusting.
For many years, General Electric was one of the largest corporations that had a stable relationship with its unions. Under Gerald Swope’s leadership, GE had come to terms with labor unions in a system of collective bargaining that created a profitable stability. While Swope’s successors at GE were not as favorable to unionism as he, the company was a stalwart of union power for decades.
When Jack Welch took over GE, he brought a very different perspective to the question of unions. He wanted them out. He was no outsider. He has worked for GE for twenty years before becoming CEO. But rather than learn how unions can sustain a workplace where workers feel valued, where they have safe and healthy jobs, and where they make wages that allow them to live with dignity, the lesson Welch took was that unions got in the way of maximizing profits. That Welch came to power the same year that Ronald Reagan ushered in the new era of unionbusting by firing the air traffic controllers in 1981 was coincidence, but a fitting one.
Moreover, Welch’s rise coincided with American corporations began moving millions of industrial jobs overseas, helping to undermine organized labor and reorient the nation to concentrate wealth in the top 1 percent of income holders, which very much included Welch and other GE executives. He made GE one of the leaders in corporate mobility. As he infamously said, “Ideally, you'd have every plant you own on a barge.” He closed union plants in the north and reopened them in the non-union south or overseas. The era of unfettered capital mobility went far to undermine the postwar stability of the working class. American steel companies laid off forty percent of their workers between 1979 and 1984 while United Auto Workers lost half their members between 1970 and 1985. As late as the 1990s, there were tens of thousands of jobs in textile plants in the South. But these were the last remnants of a once robust manufacturing base. Beginning in 1995, Fruit of the Loom closed a series of Alabama mills and moved production to Mexico, Central America, and the Caribbean, a process that continued through 2009, when two last factories closed, laying off 270 workers. Jack Welch was not the only person responsible for the outsourcing of union jobs, but no one celebrated it with more obnoxious fervor.