This will be the introduction to a five-part commentary on the changing face of labor unions in the U.S. It is clear that private sector unions are in a state of serious decline. I believe that some good background material is my 2005 commentary on the precipitous fall of private sector unions, which back eleven years ago had a market share of 7.9%. Today private sector unions represent 6.7% of the USA private sector workforce. That 2005 article was entitled "Are Unions Dead?" Here it is.
ARE UNIONS DEAD?
In the private sector, if they are not dead, they are in a near death condition. Latest statistics from the U.S. Department of Labor show that private sector unions now represent LESS THAN 8% of workers.
A number of profound changes have occurred that have contributed to the death spiral for private sector unions. This commentary will address ten fundamental reasons for labor's decline.
1. TRADITIONAL BASE IS DISAPPEARING
Latest figures show that only 12.5 percent of workers, including both the private sector and government, were enrolled in unions in 2004, down from 12.9 percent in 2003. For the private sector alone the number declined from 8.2 percent to 7.9 percent. This represents a dramatic drop from labor's peak in 1956, when 35 percent of private-sector workers belonged to unions.
Traditional union jobs in manufacturing companies are rapidly declining. But, the decline of organized labor extends far beyond traditional manufacturing jobs. Deregulation in the 1980's has taken its toll. Both the trucking and airline industries have been changed dramatically by deregulation, and union membership percentages in those industries have dipped sharply.
2. MANAGEMENT IS FAR MORE SOPHISTICATED IN COUNTERING THE THREAT OF UNIONS
Unions are participating in far fewer NLRB elections. The number of union organizing elections held in the private sector are hardly half of what they were a few decades ago. Union organizers are having a difficult time selling employees on the idea of signing a union card because management knows how to stop the cardsigning by using completely legal methods.
3. CRIME AND CORRUPTION HAVE DEVASTATED THE PUBLIC IMAGE OF UNIONS
While some people believe corruption in labor unions ended with the disappearance of Jimmy Hoffa, it seems that weekly there are reports of various types of union scandals and mob influence.
4. STRUCTURE OF LABOR UNIONS MAKES THEM INEFFECTIVE
A major problem with unions is that they are too political. Democratic elections are mandated by the Landrum-Griffin Act - every three years for locals, every five years for international unions. This legislation was passed in 1959 as a follow up to congressional hearings exposing deep-seated union corruption and mob influence. The byproduct of this is a focus on re-election, not effective management.
5. MULTI-EMPLOYER BARGAINING IS FAST DISAPPEARING
Unions were at the peak of their power in the years following World War II. Corporate management saw this strength. They came up with a strategy to counter it - multi-employer bargaining. Employer associations were formed to negotiate with unions on behalf of a large group of employers. Such bargaining became common in the retail industry, particularly grocery stores. Hotel and restaurant bargaining associations became popular in highly unionized areas. One of the biggest employer associations developed in the trucking industry. Out of this came the Teamsters National Master Freight Agreement. As events unfolded, however, management came to understand that multi-employer bargaining was doing no more than propping up weak unions. This kind of bargaining is fading away.
6. ADVERSARY STRUCTURE OF THE NLRA IS THE WRONG MODEL FOR LONGTERM UNION SUCCESS
The National Labor Relations Act is premised on a management vs. labor philosophy. That may have been true back in 1935 when the original Act was passed, but it has little relevance today. Organization structures have become flattened. Cooperative work teams and problem solving committees are routinely the management style of the day. The labor act philosophy of a union-management adversary relationship is hopelessly out of date.
7. WORKER PROTECTION LAWS HAVE LESSENED THE NEED FOR UNIONS
To a degree, organized labor has been a victim of its own political success. From the early 1960s on, we have seen the passage of strong worker protection laws. Among the most important of these are:
Should we be surprised that, with all these protections now available to employees, workers no longer feel the need for union representation?
8. MANAGEMENT IS MORE RESPONSIVE TO EMPLOYEE NEEDS THAN THEY WERE DECADES AGO WHEN IT WAS EASY FOR UNIONS TO ORGANIZE
Management today generally takes the "high road." A "low road" management style was far more prevalent in the era when unions had their greatest organizing success. Today, employers typically have solid employee benefit programs, structured communications programs and competitive and forward thinking wage structures. As a part of their program to be responsive to employee needs, employers will regularly create internal union-free programs.
9. THERE IS NO ONE TO REPLACE THE GREAT UNION LEADERS OF THE "GLORY DAYS"
At their core, the unions of yesterday were about getting their membership involved and about creating emotion and enthusiasm. In most cases, this was the product a strong and charismatic leader. These were leaders who were able to communicate to their members a vision - John L. Lewis, Walter Reuther, George Meaney, Jimmy Hoffa, Caesar Chavez. Union leaders of this quality are nowhere to be seen today! When was the last time you heard the phrase "Union Movement"? It isn't a movement anymore! Movements need a charismatic leader.
10. RISE OF MANAGEMENT-SIDE LAWYERS AND CONSULTANTS HAS MADE IT TOUGH ON UNIONS
Seldom is this issue discussed as a contributing factor toward the decline of organized labor. One need look no further than NLRB election campaigns. While unions over the years have continued to win in the ballpark of 50% of the NLRB elections, they are participating in far fewer elections and the number of employees in the voting units are becoming smaller. A major reason for this downturn is the use of consultants and lawyers who are well schooled in countering a union campaign.
The Conclusion - Long term trends are working against unions. While organized labor might weather the storm in the public sector, they are in bad shape in the private sector. Cosmetic changes such as mergers or reorganizing the AFL-CIO won't work. Neither will vague rhetoric about "re-energizing."
In the next several Wessels Sherman Client Alerts, I will analyze and explain the labor movement's shift away from private sector unions toward public sector unions, explain how public sector labor relations is vastly different from the private sector, comment on the huge impact of state right-to-work laws, further analyze the decline of private sector unions to what is now a pretty clear death spiral and, finally, I will comment on what non-union private sector employers need to do.
Questions? Contact Dick Wessels in our St. Charles office at (630) 377-1554 or by email at [email protected]