Labor Unions: Is the Grass Really Greener on the Other Side?

Labor Unions: Aging Dinosaur or Sleeping Giant?

The Labor Movement and Unionism Background and Brief History

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Higher wages! Shorter workdays! Better working conditions! These famous words echoed throughout the United States beginning in “1790 with the skilled craftsmen” (Dessler, 1997, p. 544). For the last two-hundred years, workers of all trades have been fighting for their rights and “seeking methods of improving their living standards, working conditions, and job security” (Boone, 1996,p.287). As time went by, these individuals came to the conclusion that if they work together collectively, they would grow stronger to get responses to their demands. This inspired into what we know today as labor unions. “A labor union is an organized group of workers whose purpose is to increase wages and influence other job conditions for its members” (Parkin, 1998,p.344).

These labor unions can be divided into two types: craft unions and industrial unions (World, 1998). A craft union is “a union whose membership is restricted to workers who possess an identifiable skill” (Robinson, 1985,p. 69). These members tend to be better educated and trained, and more unified because of common interests (World, 1998). An example of a craft union is the United Food and Commercial Workers International Union (World, 1998). On the other hand, an industrialized union “is a group of workers who have a variety of skills and job types but work for the same industry” (Parkin, 1998, p. 344). Unions of this type include the United Steelworkers, United Auto Workers, and the United Transportation Union (Boone, 1996).

History from the 1870’s to 1900’s. The first national union founded in Philadelphia in 1869 in the pre-Civil War period was the Knights of Labor, which “intended to include all workers” (Encyclopedia, 1996, p. 630). For a decade, this organization grew at a slow pace due to operating in secrecy until the failure of railroad strikes that increased membership to over 700,000 in 1886 (Robinson, 1985). Their advance and efforts had persuaded legislation to enact the following laws: “abolition of convict-made goods, establishment of bureaus of labor statistics, and prohibition of the importation of European labor under contract” (Encyclopedia, 1996, p. 630).

In 1890, the Knights of Labor membership had declined to only 100,000 members and the number of members continued to decline and eventually disappeared. The decline is said to have been a result of “inadequate national leadership, opposition from existing craft unions, and the loss of major strikes in meat packing and railroads in 1886 and 1887” (Robinson, 1985, p. 57).

In December 1886, the American Federation of Labor (AFL) was formed in Columbus, Ohio. The AFL was originally named the Federated Organization of Trades and Labor Union back in 1881. The AFL was a “national union made up of affiliated, individual craft unions” (Boone, 1996, p. 288). The first president of the AFL was Samuel Gompers. On the contrary to the Knights of Labor, Gompers’ focus was to raise day-to-day wages, and continue to improve the working conditions (Dessler, 1997). After the formation of the AFL, the period included significant developments. In the early 1890’s, the United Mine Workers was formed, becoming the first major United States industrialized union (Robinson, 1985). In addition, a significant defeat occurred in organized labor. The defeat is known as the strike at Homestead, Pennsylvania. The “Amalgamated Association of Iron, Steel, and Tin Workers was eliminated from the steel industry” (Robinson, 1985, p. 58).

History from 1905 to 1920. In 1905, the Industrial Workers of the World (IWW) challenged the AFL, prior to the depression of the 1930’s. The IWW invited the unskilled and semiskilled workers that the AFL had denied and was a success from 1910 to 1915 (Encyclopedia, 1996). The results of this had decreased the AFL membership for a short period of time, but they fought back by bringing unskilled workers into the craft unions (Encyclopedia, 1996). The IWW had disappeared by the middle of World War I.

During World War I, membership of unions had increased– particularly those “industries involved in war production” (Robinson, 1985, p. 60). This success was due to the presidency of Woodrow Wilson. While being president, Wilson made sure that government contractors favored unions and collective bargaining, and he made sure that railroads were operated by the executive federal branch (Robinson, 1985). In addition, President Woodrow Wilson is responsible for the labor-management conference of 1918 which resulted in the National War Labor Board (Robinson, 1985). The significance was a decrease in strike activity that was a result to “labor reaction to rising inflation of 1917” (Robinson, 1985, p. 60). The 1920’s and post war was a time of continuous improvement.

History from 1929 to 1940. In 1929, the Great Depression began leaving millions jobless (World, 1998). Prior to 1929, business executives were seen as leaders and union members were referred to as “dangerous radicals” (World, 1998, p.12). However, this changed when Americans saw that these businesses could not beat out the depression and they started to favor the union (World, 1998). Then in 1932, the Norris-LaGuardia Act was passed in favor of labor unions. This act protected unions by decreasing management’s ability to obtain a court injunction to stop union activities (Boone, 1996). Before the passing of this act, employers could easily get an injunction to stop strikes, picketing, and membership drives (Boone, 1996). In addition, the Norris-LaGuardia Act also guaranteed each employee the right to bargain collectively ‘free from interference, restraint, or coercion’ (Dessler, 1997, p.549).

Continuing through the 1930’s and Franklin Roosevelt’s presidency, another act was passed in 1935 known as the National Labor Relations Act (Wagner Act) after Senator Robert F. Wagner of New York (World, 1998). This law, like the previous ones, encourages and protects labor’s rights. When this act was passed it added ‘meat’ to the National LaGuardia Act. “It did this by: (1) banning certain unfair labor practices, (2) providing for secret-ballot elections and majority rule for determining whether a firm’s employees were to unionize; and (3) creating the National Labor Relations Board for enforcing these two provisions” (Dessler, 1997, p.549).

Also in 1935, the Committee for Industrialized Organization (CIO) was formed. This organization is made up of individual industrial unions and focused on industries as a whole (Boone, 1996). The CIO became successful and challenged the AFL.

History from 1941 to 1950. In 1941, the United States entered World War II and union membership increased. Even though the government did not allow wage increases during this time, it did grant benefits. These benefits included paid vacations and holidays, company-financed hospital insurance, and retirement pensions (World, 1998). At the end of World War II in 1945, the United States experienced the most economic growth in history that it had seen(World, 1998). Also during this period, the employment of blacks and their union membership in the CIO increased. The result of this increase in membership of the CIO caused greater friction between them and the AFL because of the CIO’s open policy (Robinson, 1985).

In the years after the war, wartime regulations were lifted and unions started to fight for lack of wages during the war (Encyclopedia, 1996). Their first approach to acquire these lost wages were nationwide strikes. The effort of these employees led to the Taft-Hartley Act (Labor –Management Relations Act) in 1947 (Encyclopedia, 1996). According to Dessler (1997), this act prohibited union unfair labor practices and lists the rights of employees as union members and rights of employers.

History from 1951 to 1960. Several years later Dwight D. Eisenhower was elected president and the Republican party began taking control over congress (Encyclopedia, 1996). At this point in time, the AFL and CIO were seen as enemies but had moved closer together. Their first move in coming together was in the “promotion of the Marshall Plan to assist the rebuilding of Europe” (Robinson, 1985, p.64). Secondly, they began to cooperate in favor of forming the United Labor Policy during the Korean War (Robinson, 1985). Then, in February 1955, the American Federation of Labor and the Committee of Industrialized Organization merged together and became the AFL-CIO (Encyclopedia, 1996).

In 1957, there was suspicion that there was something going on among our labor leaders (World, 1985). After an investigation was completed by a committed led by Senator John L. McClellan of Arkansas, they found that the officials of the Teamster Union took union funds for their own use and had also be linked to organized crime (World, 1985). This particular incident led to the passing of the Landrum-Griffin Act (Labor-Management Reporting and Disclosure Act) of 1959 (World, 1985).

The Landrum-Griffin Act was “…aimed at protecting union members from possible wrongdoing on the part of their unions” and is also considered an “amendment to the National Labor Relations (Wagner) Act” (Dessler, 1997, p.552). This act required all unions to hold regular and scheduled elections of the union officers all by secret ballot and also must set a bill of rights for its members (Boone, 1996). This bill of rights was in response to Senator John F. Kennedy of Massachusetts. Its main purpose was “guaranteed freedom of speech, control over union dues, and other rights” (World, 1998, p.13). In addition, all unions must report and submit financial information to the United States Secretary of Labor (Boone, 1996).

History from 1960 to 1980. Throughout the 1960’s and 1970’s, we experienced trends that are contrary to what the United States had previously undergone. These trends involved federal, state, and local government employees; healthcare employees; and employees in higher education (Robinson, 1985).

The rapid growth of these public employees resulted from the following. The sources of rapid growth were an increase in willingness to join unions, transformation of unions to types of organizations with more of a traditional focus on collective bargaining, and lastly, an overall increase in public employees (Robinson, 1985). This trend of public employees joining unions is an upward trend in total union membership.

Although collective bargaining in healthcare dates back to the 1920’s, there was no significance until the 1970’s. The National Labor Relations Act of 1935 included healthcare employees and then the National Labor Relations Board withdrew the idea to include these employees (Robinson, 1985). Then in 1947, the Labor-Management Relations Act of 1935 removed healthcare workers from coverage and provided special procedures (Robinson, 1985) to resolve labor disputes.

In respect to higher education, union organization reached four-year college and university level in the 1960’s (Robinson, 1985). By the late 1970’s, thirty percent of all four-year public institutions had some type of collected bargaining agreement (Robinson, 1985).

Up to this point we have discussed, in brief, the history of labor unions; how they originated, and laws and acts that have passed. As a result, we have seen American labor membership increase up until the 1950’s, and it has decreased ever since (attachment 1). Now, the timeline leads us to the present—1980’s to today. The next section will discuss the current status of labor unions; causes of the membership decline that began in the mid- 1950’s; defensive strategies against the decline; and the predicted fate of labor unions in the future.

Status of Unionism —1980 to Present—and Why the Decline?

With Lane Kirkland taking over the role of AFL-CIO president in 1979, union supporters were hopeful that the decline in membership would cease. However, the rate of member loss only increased. Catalyst to this may have occurred in 1981 when President Reagan fired federal air traffic control workers who had gone on strike. This decision made it more difficult for union leaders to gain leverage since their striking tool lost some of its effectiveness. Furthermore, it was perceived that the labor movement became divided between union leaders striving for cooperation with employers against outsourcing while others were aggressive in defending their union members (Bernstein, 1995).

The eighties were marked as a “growing period” of white-collar representation in unions since the number of blue-collar workers was decreasing. Loss of blue collar workers threatened a reduction in bargaining power so leaders realized that they needed to expand unionism by targeting white-collar workers, whose numbers were on the rise in the workforce (Robinson, 1985).

Also indicative of this time period was a rapid growth of government unions. As laws were being passed that allowed organization, elementary, and secondary education teachers, college professors, and federal employees joined unions. Many large, public unions were started, such as the American Federation of State, County, and Municipal Employees, the American federation of Teachers, and the National Education Association (Robinson, 1985).

To organized labor, the future of the labor movement still looked bleak at the start of the nineties. In 1995, Kirkland insisted he would run for re-election regardless of urges not to. Ultimately, he resigned in August. In October, John J. Sweeney, president of the Service Employees International Union, was elected as AFL-CIO president (Gray, 1996).

The Decline in Union Membership—Trends and Statistics. As previously discussed, since the beginning of organized labor, unionism has experienced fluctuations over the years. A general tendency toward increased union membership occurred up until the middle 1950’s after which time a steady decrease was seen (attachment 1). Zooming in on the past two decades, the drop continued at a slightly faster rate, decreasing 6.2 percent which brought enrollment to its lowest level since the 1930’s (Gamboa, 1999). The U.S. Department of Labor reported that 13.9% of American workers were unionized in 1998 as compared to the 35% high of the 1950’s (Gamboa, 1999). Recent data suggest that union density has been trying to plateau during the late 1990’s (Whitford, 1998).

American Attitudes Toward Unionism. With the consistent decrease in union membership, what are American’s thoughts on today’s role of unions in the labor force? Data compiled by the Labor Research Association (LRA) in January of 1999 shows that 56.1% of voters feel that unions still benefit the U.S. while less than one third felt that unions are now a detriment (Majority Thinks, 1999). In 1995, this same pole showed a 49% preference for unions; therefore, over the last four years, union popularity has increased by seven percent, according to this report.

Another survey found that attitudes are not split as optimistically. Data from a 1998 study found that about half (48%) of the people asked felt that unions are no longer necessary in today’s American society. Furthermore, one in five of the sample population taking part in this survey were union members, and of these, 25% agreed that unions are no longer important (American Labor, 1998). The disparity in conclusions between these reports only begins to show the uncertainty facing the labor movement.

Who Benefits From Unions? Before accounting for the decline in union enrollment, it suffices to consider who is impacted by today’s unions? Literature is consistent in that members of strong unions tend to make more money and receive better benefits than non-union workers in the same jobs (Dessler, 1997). While unions generally protect all of its members, certain socioeconomic groups reap even greater benefits than others.

In Ohio for example, workers in lower-paying jobs, minorities, and women that are enrolled in unions receive pay that more significantly closes the gaps in compensation between: the non-educated and educated; women and men; and African Americans and Caucasians than do their nonunion equivalents (Gamboa, 1999). Median earnings of non-union Ohioans without and with high school diplomas in 1997 were $6.50 per hour and $8.75 per hour, respectively. A union member without a diploma, however, received $11.20 per hour (Gamboa, 1999).

Again, these data are similar for non-union and union women as compared to men, and non-union. Where union males made $2.50 per hour (median) more than non-union males in same jobs, union women made $3.50 per hour more than non-union females (Gamboa, 1999), and so on for African Americans versus Caucasians. Furthermore, union membership compliments higher wages for these affected classes with increased job security and with more equal and fair treatment than those not in unions (American Labor, 1998). In general, Unions assist women and minorities more significantly than they do white males.

What Caused the Decline? Since the beginning of organized labor, the work place has changed in accordance with the changes in society, thus affecting the role of American labor unions. The decline over the years can be attributed to many debated factors—too numerous to mention all of them. Some point at changes in the economy and demographics while others point to changes in managerial styles, the national political climate, or AFL-CIO leadership, itself. One thing is likely. The decline was a result of many independent and interdependent factors—both external and internal to Unionism.

Changes in Economy. Union membership has historically been highest in government, transportation, construction, and manufacturing sectors and low in such industries as wholesale, retail, finance and services. Over the years, more significant growth has been seen in the latter type jobs as opposed to the former types (American Labor, 1998). For example, those entering the workforce that in the past might have joined the unionized governmental arena were instead choosing industries where unions were not as influential. Incidentally, the downsizing of government jobs has also caused union membership to fall (Walters, 1999).

Many consider the global economy and globalization as problematic, as well (Whitford, 1998). The fact that U.S. companies are outsourcing to save money hurts the country’s economy in the long run. Such tactics rival union efforts to increase job security. As employees lose their jobs in the automobile industry, for example, unions lose memberships. An outstanding example of this issue resides in the United Auto Workers (UAW) concern with Mexican auto industry.

The UAW’s quest to keep employment up in jobs related to the auto industry is being challenged by Mexican companies that provide automobiles and parts to U.S. companies like the General Motors Corporation (GM). U.S. companies, including GM, began to outsource when they found they could obtain parts and vehicles for less cost than they could by supplying their own which, of course, raised their profits. Now, money-hungry corporations are needing fewer American resources so plants are being shut down, and people are losing their jobs.

In the case of Mexico, the problem is only growing as Mexican companies gain experience, knowledge and revenue and, as a result, increasingly offer more specialized, higher-tech auto parts. A Business Week article states, “Mexico now exports $19.2 billion in autos and parts—up from only $7.2 billion five years ago, and it already exports close to one million vehicles, almost all to the U.S. (Smith, 1998, p. 37).” Coupling this with the outsourcing occurring in different industries, the impact of the Mexican auto industry can be even more devastating to union membership than it already has.

National Leadership. Since 1980, three U.S. presidents have had their impacts on labor. During the Reagan administration, trade unions were hurt by outcomes of the 1981 air traffic controller’s strike, as previously mentioned. Reagan fired the strikers, and as a result, unions’ striking tool lost some of its power and harmed public opinion toward unions. Furthermore, there were perceptions that Reagan’s National Relations Board (NLRB), a committee organized under the NLRA, practiced “pro-manager” tendencies (Pollock, 1985).

Although Bush only resided for one term, he accomplished plenty in the eyes of labor. For example, Bush signed three executive orders that hurt unions:

1) Bush implemented the 1988 Supreme Court decision in “Communications Workers of America Vs. Beck” which allowed union members to retrieve any dues that went toward political actions,

2) Bush freed contractors from the pro-union Davis Bacon Act after Hurricane Andrew which had made contractors pay union-wages,

3) “Project agreements” became illegal which in the past excluded non-union contractors from working on major, federal, public jobs (Frum, 1993).

Organized labor had its hopes up when a democratic president took office. Democrats are typically known for “embracing organized labor” unlike republicans (Wojcik, 1992, p. 25). Clinton’s promises fell short; however, likely due to his largely republican Congress. Furthermore, under the Clinton administration, the 1994 North American Free Trade agreement was passed which will progressively remove tariffs off of auto and auto part imports (Smith, 1998). The implication of this compounds unions’ battles against outsourcing as previously discussed.

Changes in Demographics. The fact that demographics of American society have changed, poses a third potential cause for the decline (American Labor, 1998). It is no secret that the economy has become more service driven and increasingly less product driven. Associated with this is an increase in the quantity of professionals in the workforce today as compared to decades past. Census Bureau data shows that today’s workforce is approximately 26% college graduates while in 1960 this figure was less than 10% (American Labor, 1998). In addition, more people are making more money. The percentage of workers in the $75,000 income bracket (inflation adjusted) has doubled since 1970 (American Labor, 1998). Professionals with high incomes tend not to participate in unions; however, this trend may be changing as will be discussed later.

Changes in Management Philosophy. Looking at the history of management development can shed some light on yet another possible cause. The well-known Hawthorne studies resulted in a change in management approach that has been evolving for many years. These studies found that productivity not only depended on the scientific approach to optimizing production, but factors inherent in the workers could increase productivity, as well. Hence, the birth of the “human relatedness” approach to management occurred.

Coupled with management theories like McGregor’s Theory Y management style (Rakich, 1996) and recent continuous quality improvement philosophies taught by Deming, Juran and the like (Rakich, 1996), a focus on more human and productive relationships between the employee and employer has emerged. The perception has been that collective bargaining is no longer needed since the “factory-line” approach to management has been de-emphasized and a more positive, employee-empowering atmosphere is taking its place (American Labor, 1998).

Related to this idea are the attitudes that people have regarding organized labor. In light of the changing work environment, employees may be more apprehensive to scuff their “new bonds” with employers by associating with unions. Furthermore, results of American surveys suggested in 1985 that union leaders were ranked last among different types of leaders (i.e. business, religious, government, etc.) in having positive impacts on the U.S. (Robinson, 1985). The author of this resource stated, “…a large percentage of the general public regard union leaders and their goals with, at best, suspicion and perhaps hostility” (Robinson, 1985, p. 81).

Internal Factors— Lane Kirkland.The topics mentioned thus far have been forces external to organized labor that are perceived to have led to its decline in the United States. However, what internal factors adversely impacted organized labor within the last 20 years? More specifically, what strategies did John Sweeney’s predecessor, Lane Kirkland, possibly follow that may have perpetuated the decline? Kirkland’s 15 ½ year reign as AFL-CIO began in 1979 and expired in 1995 when he resigned. During that time, the drop in union membership continued its steady decline. While Kirkland was not solely blamed for the decline, environmental factors played larger roles, the general attitude was that Kirkland’s strategies to fix the problem and his leadership were weak (Bernstein, 1995).

Critics argued that Kirkland failed as a leader. Kirkland was thought of as unfocused and had no plan to revive unions. Since he seemed removed from domestic union problems, he reinforced the false idea that union leaders across the board were far removed from their union members—a public image that discouraged potential union candidates. According to Bernstein, Kirkland “…shunned TV interviews and spoke in endless Proustian sentences” (1995, p. 44).

Furthermore, Kirkland’s priorities were questionable since he tended to focus efforts on foreign issues instead of concentrating on U.S. labor issues. The Newsweek article recalls that he would spend $100 million of the annual budget in support of labor unions in other countries, and that he would “…spend an extraordinary amount of time dealing with Eastern Europe while we were going to hell in a handbasket” (Bernstein, 1995, p. 44).

The union leader was further criticized for idly waiting for a democratic president to take office, and once one did, the AFL-CIO leader idly waited for Clinton’s promises to materialize— which never did. Although subjective, it appears that Lane Kirkland’s weak leadership is worth adding to the list of possible causes that decreased membership over the eighties and early half of the nineties. Today, what is being done by Sweeney and others to reverse the trend?

It has been said that the labor movement in this country is very decentralized, and the success of unions depends largely on happenings of individual unions at the national, and especially the local level (Milkman, 1998). This being as it is, how can any one person or group reverse the seemingly out of control land slide that unions seem(ed) to be on? In the decade of the nineties, unions have been done in by many factors, one being poor leadership.

Obviously Lane Kirkland had a lot to do with the downfall as earlier mentioned. Many point back to Kirkland’s failure to mount a strong labor challenge to NAFTA and GATT, and numerous inside games with the White House as the source of his ultimate undoing (Cooper, 1995). Many union members saw the loss of labor’s clout along with failure after failure to pass labor favoring legislation and ultimately asked for Kirkland’s resignation in 1995. It seemed Mr. Kirkland wanted to rest on his laurels and just take the status quo, not trying to right the ship in any way.

A New Era. Enter John Sweeney. Sweeney was elected president of the Service Employees International Union (SEIU) in 1980 and served four terms. At a time when unions were declining, the SEIU doubled its membership to 1.1 million. The primary reason behind this surge in membership was Sweeney’s organizing tactics and abilities among low paid service employees, especially among women and minorities (John Sweeney to receive…, April, 1999). This was a welcomed change to the old stereotype of the prototypical union member being mostly older white males. Mr. Sweeney obviously had the background and accomplishments to stand on. His lofty campaign promises won over voters, and he was elected in 1995.

Blueprint for success. The main thing that Sweeney wanted to accomplish now that he was running the AFL-CIO was, and still is, to focus efforts on union organizing. Sweeney has increased spending on organizing efforts from 5% of the budget to 30% ($20 million) of the budget since he has taken over. This number is much greater than the 3% on average that unions spend on organizing. Employers today spend much more money on trying to crush organizing plans than they did even a decade ago. Given this, Sweeney has called on all unions to keep pace and spend more on organizing (AFL-CIO sets aside…, 1999).

Sweeney also called on members to give less to political parties and more to the organizing effort, hoping that registering a target of 4 million new union family voters will restore labor’s political clout (Germond & Witcover, 1997). Besides devoting more money to where it needs to go, Sweeney is also taking steps to appeal to minorities and women. He increased the AFL-CIO Executive council to 54 members, up from 35 members. In doing that, he named many women and minorities, expanding their share on the Executive Council from 17% to 27%.

Along with reaching to women and minorities, he is reaching to young people. His administration recruited over a thousand young adults to “Union Summer” internship programs where they developed skills and expertise on issues relating to labor (Milkman, 1998). Couple that with $40 million spent on new “feel good” commercials aimed at improving the looks of unions to the general public (Zapenski, 1997), and Mr. Sweeney seems to be doing al

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