If Unions Couldn’t Save HuffPost From the Ax, What Could?

Antitrust is a powerful sword against Big Tech—which is vacuuming vital ad dollars from publications.

Five years ago, a wave of unionization at digital media companies suggested that labor was making a comeback. But this week’s mass firing of 47 American HuffPost employees, 33 of whom were unionized, gave a harsh reminder that organized labor is no match for a declining industry.

HuffPost’s union, a unit of the Writers Guild of America East, does not deserve blame for the layoffs. But collective bargaining can’t stop the forces squeezing the media business. In particular, as the Washington Monthly’s Phillip Longman recently explored, a Google and Facebook duopoly has cornered the digital ad market, choking off a revenue source for the media outlets that actually produce content.

How exactly to reduce systemic inequality and strengthen the middle-class has been grist in Democratic circles for what seems like forever. The schools of thought were roughly personified in the Democratic presidential primary. Sen. Bernie Sanders championed universal government programs delivering public goods and wealth redistribution. Sen. Elizabeth Warren stood for the unrigging the rules of the market to break up consolidated industries and wealth. And Joe Biden, in some contrast with his moderate persona, often spoke of the importance of unions.

Of course, there was plenty of overlap among those three candidates—for example, nobody was anti-union, and Warren was celebrated for her redistributive wealth tax proposal. Now as president, Biden is moving on multiple fronts, with nods to his former rivals.

Through the American Rescue Plan that he signed on Thursday, Biden is launching an expansive, redistributive child tax credit program designed to provide monthly checks to poor and middle-class families with school-age children. He has tapped anti-monopoly advocates for key administration posts. He is openly encouraging the unionization of an Alabama Amazon facility, and supporting House legislation to ease union organizing.

As these differing schools of progressive thought are not mutually exclusive, Biden and his fellow Democrats needn’t choose between them. But they should understand which has the most realistic shot at broadening and boosting the middle-class in the short term, and which is a long-term play.

Widespread unionization can certainly generate broad-based prosperity. The Nordic countries and Belgium all have at least half of their workforces unionized, and generally speaking, they boast high average wages, with a small share of low-wage work. Icelandic workers are automatically enrolled in unions, though a few opt out, and the island nation has the lowest poverty rate among the 37 developed countries in the Organisation for Economic Co-operation and Development.

In stark contrast, among the OECD countries, the United States has the highest percent of workers earning low wages, and it also has one the lowest unionization rates. For 2020, the American rate was 10.8 percent. (Among private sector workers, the rate went from 6.2 percent to 6.3 percent.) That happens to be up from the record low of 10.3 percent in 2019. But the raw number of union workers is actually down from last year by 321,000; the percentage of unionization is only up slightly because of the massive job losses from the pandemic.

It stands to reason that if America can turn its labor numbers around to look more Scandinavian, our wage numbers would turn around, too. (While we in America fight about how much the minimum wage should be, Sweden, Norway, Demark and Iceland don’t even have minimum wages; their unions set wages at livable levels.)

The problem is: When it comes to unionization, America starts from a very deep hole. Moving from a 10 percent unionized workforce to a 50 percent unionized workforce over a span of a few years is impossible to imagine. The Democrats’ Protecting the Right to Organize Act has breezily passed the House, but it is likely to meet resistance in the Senate. Even if the bill passes the filibuster gauntlet—or if the filibuster obstacle is removed—it may not pass the muster of the corporate-friendly conservative Supreme Court majority. And even if the bill is upheld by the Court, reaching Nordic-level unionization rates would still likely take decades. (During peak unionization in the U.S. in 1954, just under 35 percent of the labor force was unionized.)

Regardless of the bill’s prospects, Biden can continue to use his bully pulpit to encourage labor organizing, but it will still be a protracted process to organize a large share of America’s approximately 100,000,000 nonunion workers, one business at a time.

Biden has moved fast to reduce inequality with the American Rescue Plan and its expanded child tax credit program, which will give most families $300 a month for each child under 6 and $250 a month for children between 6 and 17. The new law also increases subsidies to purchase health insurance through the Affordable Care Act. (These are technically temporary one-year measures that Democrats hope to make permanent in subsequent legislation.) However, more cash doesn’t help achieve job availability and security.

A policy which holds out hope for a stronger job market that works for workers is market deconsolidation. As the Open Markets Institute, which advocates vigorous use of antitrust laws, “merged corporations tend to cut jobs” and consolidated industries have “few employers competing to hire or retain each worker, thereby putting downward pressure on wages.” Trying to break up behemoth corporations and resist major mergers is hardly without political challenges, but it can be pursued by the Biden Justice Department using existing antitrust law, bypassing the narrowly divided Congress.

In the case of the media business, targeted action against the Google-Facebook digital ad duopoly would be a faster and more effective remedy than unionization. Disruption of the news industry has spread from venerable midsized newspapers to what were once considered ascendent online publications. As the industry continues its decline, unionization helps workers manage that decline by ensuring decent severance pay, but it is largely powerless to fend off consolidation and the resulting layoffs.

Take HuffPost. After it exploded on to the news landscape in 2005 as The Huffington Post, it became one of the most attractive media companies around with its huge audience, mix of news and celebrity, and the eponymous Arianna Huffington at the helm. It got snapped up by AOL in 2015 for $315 million, which in turn was bought by Verizon in 2015, a move which presaged AT&Ts purchase of Time-Warner, and the push from telecoms to grab “content.” Last year, BuzzFeed bought HuffPost and vowed to keep it as a stand-alone product. But, of course, there are layoffs. Consolidation did the publication no favors.

This is where antitrust comes in. If media companies, digital-only like HuffPost and legacy print publications, were able to reclaim ad revenue from the likes of Facebook and Google, more of them could survive and more jobs would remain. Antitrust is a worker’s sword when it comes to media in troubled times. Unionization is more of a shield.

You need both. Stronger worker power through widespread collective bargaining is vital, but for beleaguered industries like media, it takes time that many don’t have. Antitrust is a sharper weapon, and Biden is honing the blade.

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Bill Scher

Bill Scher is the host of the history podcast "When America Worked" and the co-host of bipartisan online show and podcast "The DMZ"