Unions: The Fight for Survival in a Changing Economy - Research Paper Example

 Running head: Unions: The Fight for Unions: The Fight for Survival in a Changing Economy? Abstract From self-sufficiency to sweat shops to the organized labor movement, unions in the U.S. have had a hard fight for survival. Today, in a weak economy filled with fewer jobs and growing business uncertainties, the survival of what labor unions are left is in a precarious state. People need to work, and employers are seeking to get the most for as few concessions from workers as possible. While union busting has been an ongoing activity in the U.S. since their beginnings in the early twentieth century, the activity is now flourishing in earnest, as evidenced by the recent Wisconsin decision to limit public employee collective bargaining. The pattern is irreversible, and it is unlikely that unions, as they exist, can survive the gathering economic storms. A History of Confrontation and Concession The history of labor unions in the United States can be traced as far back as 1765 and the Daughter’s of Liberty, a women’s organizational group who, through their making of cloth and other goods at home, supported the Revolutionary War movement. The first male trade unions formed in the late 18th century, and women workers began organizing in earnest in the 1820s. In general, and according to most trade union historians, the movement as a national power evolved after the Civil War with the National Labor Union (NLU) as the first federation of local groups, followed by its successors, the Knights of Labor and the American Federation of Labor (AFL), still powerful and active today. An offshoot, the Industrial Workers of the World (IWW, or "the Wobblies") came to being in the early twentieth century, often “using violence to promote the cause of unskilled workers” (History of U.S. Labor Unions, 2010, par 3). True union organizational growth saw its greatest surge in the period from 1900-1920, “thanks to support from the national government and working arrangements with business” (History of U.S. Labor Unions, 2010, par 2). By the 1930s, AFL leader John L. Lewis, a name widely associated with the American labor movement, formed the Committee for Industrial Organizations. Later merging with the AFL, it formed the still powerful (AFL-CIO), which according to its official site now boasts 12.2 million members-- teachers and miners, firefighters and farm workers, bakers and engineers, pilots and public employees, doctors and nurses, painters and plumbers” (AFL-CIO, 2011, About Us, par. 2). Other groups over time have become part of the matrix, including public sector employees in hospitals, postal workers, municipal workers police and fireman. Counterbalancing unions in existence in the public sector, union membership today in the private sector has “fallen under 8%--levels not seen since 1932” (History of U.S. Labor Unions, 2010, par. 5) due to lack of interest, illegal workers and undoubtedly workers who are fearful of loosing jobs in a progressively diminishing job market. Outsourcing as a contributing issue can not be discounted. As Dubofsky and Dulles (2004) found, “the forces of economic liberalization, capital mobility, and globalization have affected measurably the material standard of living enjoyed by workers in the United States” (p. ix). Pros and Cons of Unions and Union Membership Since the Industrial Revolution, unions have been credited with securing improvements in working conditions and wages. Beyond the obvious, in any discussion of unions one of the first points raised is exactly this: what are the benefits of unions and how do they represent the interests of the working person? Views are generally diverse, depending upon particular experiences and who is making the judgment. For instance, employers who wish more mobility in making economic decisions for their company or organization may find the demands of collective bargaining more than they can absorb, or, more than they are willing to absorb. On the other hand, a good collective bargainer can often come to reasonable agreement that satisfies both the employer and the worker. Obviously, much depends upon who is doing the bargaining and the extent or reasonableness of the demands, as well as the employer’s and union’s willingness to make reasonable concessions. Speaking more to the economics of union activity, according to Radcliff (2011) “The [real] power of labor unions rests in their two main tools of influence: restricting labor supply and increasing labor demand” (par 7). The union then is in essence putting the employer on the spot. By manipulating these factors unions may also be throwing business calculations regarding wage equilibriums off track. By fighting for things such as fewer working hours, they may be cutting into hours the employer needs to meet maximum production goals, and thus, profit. It makes sense then that unions can be counter elements to profit and capitalism, which today has come to mean ultimate profit at any cost. It is not surprising then as Radcliff (2011) found, unions are often perceived as coercive “cartels” (par 7)—not a very positive image in this day when such terms have a generally assumed negative connotation. This notion is supported by recent comments by Governor Chris Christie of New Jersey in calling the teacher’s union in that state, “bullies and thugs” (New Jersey Gov. Chris Christie, 2011, par. 4). Nonetheless, benefits of unions to both employees and employers have been studied as positive, although it may be hard at times to convince the latter. The effect of unions alone on a major aspect of employee concern—benefits—is quite impressive. According to Budd (2005), “unionized workers in the United States are covered by more extensive employee benefits than are comparable nonunion workers…16.4 percentage points more likely…to be covered by an employer-provided health insurance plan, and 18.8 percentage points more likely to participate in an employer-sponsored retirement plan” (par. 1). A summary of conclusions regarding what unions do for workers was researched by Mishal and Walters (2003). According to the study, unions raise both wages and benefits by an estimated 28 percent; reduce wage inequality between white and blue collar workers; improve wages for non-union workers in the semi-unionized workplace. They also say 23 percent to 54 percent are more likely to be involved in an employee pension plan. (par. 1-6) The upside to the last benefit is obvious in terms of security in retirement. The most significant advantages projected are in the area of health coverage. While Budd (2005) projects an advantage for union workers of 16 percent to 18 percent, Mishal and Walters (2003) estimate the advantage at 18 percent to 28 percent. This difference may be attributable to the two year difference in which the figures were gathered, since health insurance options and other fringe benefits for unions such as vacation and leave time are fast diminishing along with company profits in a poor economy. Aside from all the other advantages of collective bargaining, including worker educational training and protection from unfair dismissal, unions can also provide advantages for business. Though generally viewed as adversarial, examples of cooperation between unions and business can be cited as having a positive benefit for a business in trouble. In light of the current competitive business environment some unions and employers have worked together to preserve both capital and jobs for working people. According to Stuart (1993), in the 90s a cooperative effort between General Motors and the United Auto Worker union produced a result that brought 800 jobs back from Mexico to Michigan—a result that undoubtedly would not have been achieved without the power of the union and its negotiators behind it. In the interim strikes were avoided and the company continued on a path toward greater solvency. While the benefits of unions and union membership are in the obvious good for workers, there are well-publicized downsides as well, including in some instances mob influence and pressure on companies for unrealistically high wages and benefits. These costs, from a business point of view, are passed onto the consumer in the form of higher prices that more often than not either affect a company’s bottom line, or force it to offer products of lesser quality. Strikes and lack of consensus not only affect worker income but can seriously disrupt necessary services, as in teacher strikes of the past twenty years and as in Europe, recent transportation strikes that paralyzed rail systems. There can also be a degree of intimidation within the union itself on workers to go along with union initiatives whether they agree or not. All pros and cons of unions considered, it is clear that in today’s weak economy the role and power of unions is changing, and that unions themselves are in a period of decline. Why this is happening and what it implies for the future of unions is a discussion inextricably tied to the economy and, to some degree, politics. How this trend will affect millions of working Americans and their paychecks is a subject worth exploring. Union Decline: A Changing Workforce and Hobbled Economy Firstly, we accept the notion that unions are indeed in a period of decline. According to State Department (2011) figures, “While more than one-third of employed people belonged to unions in 1945, union membership fell to 24.1 percent of the U.S. work force in 1979 and to 13.9 percent in 1998” (par. 1). And summary of how and why this happened based on State Department (2011) explanations follows: Dues increases, continuing union contributions to political campaigns, and union members' diligent voter-turnout efforts kept unions' political power from ebbing as much as their membership. But court decisions and National Labor Relations Board rulings allowing workers to withhold the portion of their union dues used to back, or oppose, political candidates, undercut unions' influence. Management, feeling the heat of foreign and domestic competition, is today less willing to accede to union demands for higher wages and benefits than in earlier decades. It also is much more aggressive about fighting unions' attempts to organize workers. Strikes were infrequent in the 1980s and 1990s, as employers became more willing to hire strikebreakers when unions walk out and to keep them on the job when the strike was over. (U.S. State Department, 2011, par. 1-2) Automation and a shift to service industries have obviously also taken their toll. Office workers and professionals on the move, who see their future in a management context, are not favorably inclined to join unions and their historically working class and often corrupt image. “Perhaps the biggest reason unions faced trouble in recruiting new members in the late 1990s, however, was the surprising strength of the economy” (U.S. State Department, 2011, par. 6), and peoples perception that jobs were abundant and they no longer needed unions to promote their cause. Weakened through this period, former union workers now find themselves in a stagnant economy, fighting their cause for economic survival on their own, without union help and at the mercy of companies who can hire and fire almost at will. Perhaps a more insightful sociological explanation is that American workers no longer accept “processes of struggle” (Clawson & Clawson, 1999, p. 1) and have become more intensely individual and reluctant to relinquish their futures to the group. They assert that over the years unions lost their “oppositional character” (p. 1), became to cozy with management, and now find themselves weakened in the fact of business economic challenges vis a vis worker security and compensation. Decline Today: While it is important to assess decline over the years as factors of the economy, politics and social perception, the facts involving the reasons for today’s continuing decline are a specific matrix of economic decline, the growing power of the capitalist elite, worker disinterest and an expanding workforce of foreign workers more than willing to work under any circumstances at any price, with “the decline of private union membership at the heart of the issue, dropping from 19 percent to under 8 percent in just 25 years” (Kane and Sherk, 2006, par. 8). The question then is not whether unions as they exist are politically powerful but that unions as representatives of workers “are almost totally irrelevant economically in the 21st century workplace of individualization and technology” (par. 8). …the union philosophy sees the economy through a 1950s lens where only two agents negotiate how to cut the economic pie: management as the agent of capital and investors, and organized labor as the agent of individual workers. It assumes monopoly power for employers, lifetime employment for workers, and non-unique (lower-skilled) labor. Consequently, unions tend to prosper only in the rare cases where all three conditions exist-an increasingly rare situation in the modern economy. The economic pie is dynamic, and burgeoning entrepreneurship simply does not make sense to the union philosophy. (Kane and Sherk, 2006, par. 4). Entrepreneurship being the ostensible lynchpin of capitalism then, it is easy to see how a philosophy based on extreme individualism might perceive the group mentality of unionism as almost anathema to its economic cause. Extending this notion to large companies and corporations, unions a collective bargaining seeking to achieve the best result for workers actually end up handicapping companies ability to cut costs and maximize shareholder value. Taking a small startup company, for instance, the following scenario presents itself as standing firmly against a union workforce. The company is already facing hard economic times due to the turndown, and unless the company has an immediate and great source of market value and thus potential quick profit, unsustainable salary demands and benefits often put forth by unions stymie the operation and clip its economic wings in the bud, so to speak. By the time a business is stable over time it has a non-union workforce less than willing to sacrifice jobs to a promise of potential benefits in future. Even if a start up is willing to risk the formulation of a union, the prospect of unreasonably high salaries, benefits and other future demands are simply more risk than any economist might possibly advise. Entrepreneurs, in a risk prone environment to begin with, would naturally see a union for workers in an unfavorable light. Another theory also blames the decline in union membership on the downward trend in manufacturing, which makes sense when one considers a good deal of the large union membership in the past was largely blue collar workers who saw the unions as protecting job security. However, new high-tech industries are capital intensive, require fewer employees and their operations are spread out in many instances over the globe. This fact alone would be detrimental to the formation of unions, which need a concentrated base of workers with which to organize and operate effectively. Extrapolating from this, include the number of outsourced workers and new immigrants in the United States happy to simply have employment and the problem for union organizing becomes even more problematic. Conclusion So what then is the future of unions? Will they continue to decline, or is the current cycle just that, which will evolve into other cycles more favorable to union activity? I would say, no. The writing, as they say, appears to be on the wall—put there in essence by changing economic factors that are not at all favorable to union organizing. As the economy weakens, or struggles over an extended period (which seems to be the case)and new ways of doing business evolve, the likelihood becomes even more remote. Yet, while Clawson et al (1999) tend to counter this argument with scenarios that “might” reverse union’s decline, it is all hypothetical and based on a view of the economic and social possibilities quite different than the ones which have evolved since 1999. By the time current low wage immigrant workers produce leaders strong enough to organize unions, and given the current heated debate on so many illegals, that prospect, if at all possible, is far in the distant future. That the tide of outsourcing will be stemmed is also doubtful given the current economy that demands lower wage workers, not those who contract after contract will demand appropriate wages and benefits. These entities that basically control the world economy are simply too powerful. References AFL -CIO Website. (2011). About US. Available on: (Accessed 2 April 2011). Budd, J.W. (2005) The effect of unions on employee benefits: Recent results from the employer costs for employee compensation data. Available on: http://www.bls.gov/opub/cwc/cm20050616ar01p1.htm (Accessed 5 April 2011). Clawson, D., & Clawson, M. A. (1999) What Has Happened to the US Labor Movement? Union Decline and Renewal. Annual Review of Sociology, p. 95. www.questia.com. Dubofsky, M., & Dulles, F. R. (2004). Preface. Labor in America: A history. Wheeling, IL: Harlan Davidson. History of U.S. labor unions (2010). Available from: Retrieved 4 April 2011). Kane, T. & Sherk, J. (2006) Unions in decline and under review. WebMemo #1202, The Heritage Foundation website. Available from: (Accessed 4 April 2011). New Jersey Governor Chris Christie outlines teacher evaluation plan, calls union ‘bullies and thugs.’ (2011) . Huffington Education. Available from: (Accessed 5 April 2011). Mishel, L. & Walters.M. (2003). How unions help all workers. Available at: (Accessed 4 April 2011). Radcliff, B. (2011). Unions: Do they help or hurt workers? Investopedia. Available on: (Accessed 2 April 2011). . Stuart, P. (1993) Labor Unions Become Business Partners. Personnel Journal 72 (8), 54+. www.questia.com U.S. State Department (2011). The decline of union power. About.com. Available at: (Accessed 5 April 2011). Read More