The Recession Opens the Door for Organized Labor

Workers have been hammered by cutbacks; if companies don’t address the needs and expectations of employees, they will look to third-party support. Pro or con?

Pro: Employees Are on the Tipping Point

Almost 3 in 4 employees say the economy has affected their career in the past two years, according to a recent Glassdoor.com Employment Confidence Survey. In the past six months alone, 57 percent of workers reported reduced pay. In fact, nearly 1 in 3 is making less money than he or she has historically. Employees are also taking on more work without receiving additional compensation or advancement. Many feel stuck in their current positions because of the dire job market.

So what’s the message to employees? Keep working hard, do more for less, and stay put. How much more pressure without reward can employees take? An outside advocate is likely to step in and become an attractive option for employees.

The unionization of America the first time around happened because of bad working conditions and maltreatment. Many of the same underlying issues resonate today. Contemporized, more sophisticated unions can use their experience to unite employees to negotiate pay increases, more reasonable hours, better working conditions, and greater job security.

Companies and their human resources departments have long lost the skills of union avoidance and could be caught flat-footed. If the Card Check Bill—officially known as the Employee Free Choice Act, which would change how unions can organize workers—passes, watch out!

Without swift and direct attention from employers, we may see the organizing of the workforce like we have never before.

Con: Employees Will Stand on Their Own Two Feet

In a tough economy, it makes sense that unhappy workers would band together in collective bargaining units to add heft to their negotiations with employers. But we’re not seeing that happening. If downtrodden retail workers, the ones that labor unions have been trying mightily to organize for the past 20 years, haven’t jumped on board, we’re not likely to see white-collar office types rushing to sign union cards anytime soon.

In a knowledge economy, negotiating en masse for pay and benefits makes less sense than ever. In a knowledge economy, the one-on-one, "hub and spoke" relationship between each employee and his or her manager becomes more important than a one-size-fits-all agreement between a team and its bosses. Perhaps that’s why white-collar employees have been shunning union organizing efforts in droves for decades.

As difficult as the job market is, and as stingily as employers have been in forking over pay raises or other rewards lately, most employees prefer striking their own deals to casting their lot with organized labor. That’s why union membership is at its lowest point in decades, if not ever. With the country’s manufacturing base heading overseas, American labor unions may well become a thing of the past.

Opinions and conclusions expressed in the Debate Room do not necessarily reflect the views of Bloomberg Businessweek, Businessweek.com, or Bloomberg LP.

Reader Comments

George Dorsey Rueff Jr

I disagree with both authors on a couple of points.

Rusty says that many of the same underlying issues resonate today that caused unions to grow strong.

Yes, some are there, but I am afraid to really get workers to play the union card: things like, for instance, the abolishment of OSHA, which many of our no big government friends favor, more deaths in the work place, no health care or our American money becomes worthless. It would take these kinds of serious maltreatments before workers will organize.

Liz believes employees prefer striking their own deals to casting their lot with organized labor. I believe that is because organized labor is not a choice for them. Organized labor is simply not there and when a union is there, they fail to make the employees of the union understand that dues alone do not make a union. Unions only succeed with workers standing together and working on there own time to organize.

Unions are dying because Americans no longer have the guts or vision to work with each other to better their lot in life. They want it handed to them on a silver platter. When that does not happen when they pay their dues to the union, they walk away from labor unions. Americans, back when labors unions were organized, went to church, knew their neighbors and were an altogether different animal than today's stay in the house gamers or whatever we have become that makes hide in our holes and take whatever the man is giving for as little as we can do.


Real World

Unions do not create job growth or job security, except for the chosen few. Everyone else in the country has to pay more so that the chosen few can get more than the market will bear naturally.

With the economy being international, any attempt to artificially overvalue the labor force will immediately mean jobs moving to a more reasonable economic climate (offshore).

Liz Ryan

I've got to go with Real World on this one. We're in a global talent marketplace. As Real World says, any attempt to artificially overvalue the workforce is only going to push more jobs offshore. I'm going to respectfully disagree with George, who feels that people don't know how to (or aren't willing to) work hard anymore for what they want. In my work with thousands of working people and job-seekers every year, I don't see people looking for anyone to hand them anything on a silver platter. They are working harder than ever, more hours than ever, for less security than ever--all the points Rusty makes in his piece, above. It is not a happy time for the American worker. Entitlement has always been an issue for some subset of the working population, but if you want to talk about entitlement, we only need to look at the typical corporate executive suite. Working people are killing themselves right now, working multiple jobs and trying to stay afloat. I think the era for labor unions in the U.S. is definitely over.

Speaking of that, when they built the new Giants Stadium, did they find Hoffa?

Sam Fistel

I would love to see our two authors address why unions are successful with the highest paid workers on our planet, literally. What makes these highest paid workers come together and negotiate with their employers for fairer pay and safer working conditions?

I also agree with George's point above about union members needing to actually participate to make it work.

Whether Liz and Rusty know it or have it in the forefront of their minds as they write this, they already know of many union representatives who earn 100's of times as much money as they do, partly due to their union work. And it doesn't affect their abilities to have their individual salaries tied to their individual abilities, as experienced, more productive workers routinely earn 20 times as much as less productive workers in their fields.

But they are able to make their work environment safer. They fight to ensure their workers are taken care of after they retire, that they have adequate health care to help with the problems their professions create for them. And one union in a dangerous profession is currently fighting to keep management from expanding their work schedule by 12.5% right now!

I'll name a few for you:
Tom Brady
LeBron James
Kevin Youkilis
Dwyane Wade
Mike Mussina

Jeff Becker

Rusty is right on. Making matters worse is that too many employers believe that in a bad economy, workers have no options. They're wrong. Most managers have no idea why workers seek unions. They think it's to get more pay, while research has indicated that's way down an employees' list of reasons. At the top of employees' list is (1) lack of appreciation for work done and (2) not feeling involved in things at work. Shortsighted employers neglect these, even though they are cheap or even free. Job security is not far behind

Liz misses on a couple key points. First, the reason white collar workers rejected unions for so many years/decades is they felt unions were for factory workers and others below their station. And for a long time, white collar workers were treated well: good pay that went up, comprehensive benefits at low cost, very often pensions as well. Pay that goes up is gone, they're lucky to have any benefits, even at huge personal cost, and pensions are disappearing faster than snow from a freak April storm. And now that job security is so tenuous, a perfect storm is brewing. The biggest reason for workers to not seek union representation these days is that they fear being fired if the boss finds out they are involved. Second, while manufacturing unions continue to fade, if Liz thinks unions are going to be a thing of the past, she should tell that to the SEIU.

Many of my former colleagues are in senior HR roles at top companies, and virtually all are experiencing some combination of pay cuts or freezes, benefits cost increases, or coverage rollbacks, and policy changes impacting employees' pay--often without any involvement from employees.

And many employers are still afraid of talking directly with their employees about unions and the company's philosophy of dealing directly with employees, thinking that if they talk about it, their employees will all of a sudden begin to contemplate it.

Talking to employees about unions is like talking to your kids about drugs and sex: If you don't talk to them, someone else surely will, and it will not be as accurate, and the outcomes are guaranteed to be less desirable.

Liz Ryan

Jeff,

Want to share some of the white-collar groups that have joined unions recently? My point wasn't that people don't have good reasons to be frustrated, but that they're not seeing unionization as the answer. Union membership in the U.S. in 2009 was at around the 12 percent mark, down from one-third of workers in the 1950s.

Kim

I often wonder why some people are so afraid of unions. Advocacy is a wonderful thing, and from where I sit as a proud card-carrying union member for the past 26 years, workers rights are human rights. The American worker is entitled to human rights. What is wrong with collective bargaining? It is alright for the CEO to negotiate her/his salary and benefit package, so why is the same not true for the unionized worker?

I am privileged to represent workers in negotiating their contracts and resolving their work grievances.

As for white collar unions, I don't know how much more "white collar" you can get than AMA, NFL, MBA, NHL, Screen Actors Guild, and teachers.

Bob

I have never liked unions. They also look at such a narrow slice of the job without taking into consideration the overall requirements.

That said, something needs to be done. Manufacturing is being moved overseas because that is what the CEOs want, nothing to do with the global market place. European countries protect their home-grown labor force and pay better salaries. We in the USA have to do something about executive pay. I have seen companies announce that no raises are available because the of the economy and then announce in the same statement that their CEO is one of the highest paid in the country. The guys at the top are grabbing all of the money, leaving nothing for the rest of the workers. That is not capitalism. That is a dictatorship. Want a better economy? Reinstate the 90% tax rate to people who make more than $20 million a year. That would go along way.

Robert

I have union friends who have been out of work for almost 2 years and their union votes for a $4/hour wage increase (thereby causing fewer people to hire union workers).

I can hire a union contractor and pay them $12/hr more than non-Union (same skill set) just to pay for their benefits (if you recall in the health reform debate over Cadillac plans, it was the unions who had a problem with it as most of the Cadillac plans are via unions).

Furthermore, if you unionize in an industry that can be outsourced, chances are that the corporation will minimize the number of people and shift to using other labor.

Unions to protect safety and working conditions are a valuable resource. At the same time, if they protect incompetence, there is a huge problem.

We all know of an incompetent teacher who keeps teaching because they have tenure. That teacher thereby hurts generations of children, all due to the impact of a union. (My son had one of those teachers, the same teacher that our neighbor's son had 15 years ago and who had such a bad experience he didn't continue school after high school).

There is a place for unions, but it's on a case by case basis.

Strategery

If most Americans knew that productivity increased 75% over the last 30 years while real wages only increased 22% over the same period, union membership would hit record numbers. The fact is, most of the benefits of productivity increases and "free trade" have been kept by a select few. For most workers, real wages have actually fallen--not only in the USA but for citizens of our trading "partners."

tim Garrett

Having been on the front lines in union organizing campaigns, and having successfully fought off more than 15 serious campaigns, I understand why employees seek out unions, and how unions try to convince employees to join their ranks.

I agree with many of the above comments on both sides of the argument. I will share at this time two viewpoints.

First my concern is how well companies are managing through this period of economic challenges. There seems to be what I refer to as a "race to the bottom," where companies are taking action that has a negative impact on employees simply because the economy is serving as a cover. I am not referring to actions necessary to remain a viable company, but actions such as eliminating any program or event that was originally put in place to express thanks and appreciation. Actions that send a message that employees are not truly valued and that bottom line performance is the top priority. Additionally it seems many companies have also become less respectful of employees in terms of how they are treated since there is an ample available labor force today. In short, some companies have allowed the economic downturn to alter the way they treat employees.

Second, typically in difficult times when people are concerned about simply having a job, they will not risk what they have by seeking out a union. However, when the fear of losing a job passes, this risk increases dramatically. As I shared with one organization, when this day passes and it will, your employees will reflect on how well you managed through this time, and you will either derive a benefit or a consequence. My fear is many companies will derive a consequence and that will open the door for the unions.

Laura

I work for a company that has organized labor. I am paid well, have good benefits, and they even chipped in to pay for college. I am doing better than most, and can afford to live this life that I have. How is that a bad thing? Why are more and more people struggling? I attribute my good fortune to the labor union that negotiates on my behalf.

Todd

Organizing to improve working conditions is one thing, but organizing to increase salaries is another and not beneficial in this day and age. I like the point Robert made and how unionizing actually can cause fewer workers to be hired.

People need to wise up and understand that nobody should feel entitled to a job. Especially in this information age where techology changes grow at seemingly ever increasing speeds, leading to further evolution of industries on a global scale.

Workers would be better off thinking how to improve their skill sets and marketability than thinking about organizing.

RB

Perhaps the reason you don't see many 'white collar' unions is that those that hold those types of positions are educated and mature enough to realize they are responsible for their own actions. I have worked side by side with trade unions for years, and they served no other purpose than to protect the ignorant, lazy, and incompetent from receiving the dismissal they so deserve. If these people spent half as much time doing their jobs as they did trying to find ways of avoiding work, they would actually be comptetitive in the market place. As it is, however, their increasingly ridiculous demands are forcing more and more American job losses and decreased ability to compete in a global market.

Mark-Anthony

I have a single issue with unions, and it's simple socio-economics 101, the only way for a union to exist is a competitive industry is for the government to force consumers to bear the cost in some form or another. Steel workers, they use tariffs. Teamsters, they use local ordinances. Aircraft mechanics, federal laws and subsidies, etc. When you force me to pay more so you can get wages and benefits beyond the market price for your labor, I have a problem with it. You have the same right to negotiate for your salary as shareholders and consumers have rights to dispose with their money. I would be fine with unions without government intervention.

PS. CEOs job is to get the best return on someone else's money; labor is no different from capital. Also the Europeans "protect" their workers from outside competition. That's probably why my best friend in France is dealing with a 26% unemployment rate for people in their 20s. How many new jobs are they creating, on a continent whose work force is actually shrinking?

jay

I don't know why this can be complicated. If unions were so bad that there are now very few unions in the U.S., then we shouldn't have an unemployment crisis. It is just a made up statement that companies will lose from competition. U.S. companies today have profits that are far larger than an entire poor nation's GDP. Unions are bad because CEOs can't have that $50 million bonus? This senseless debate is a reason why companies happily ship more jobs overseas.

Lauren

Labor unions are smart for all workers and that is why business owners and corporate CEOs hate them.

However, without capping what goods and services can be shipped onshore and without taxing the hell out of companies that do not hire Americans and who also dump their foreign made garbage on our ecomony, ti will continue to run America toward a third world nation. If we were wise, we would place import tarriffs and annual quantity restrictions on everything made offshore (services and manufacturing).

When all American workers are barely able to survive, who will buy any products or services that anyone produces? Small government and unlimited freedoms will drive us toward an economy similar to Mexico's, where the best bet to earning a survival is to join a drug cartel. Is that so great? If you want to live like Mexicans, then go there, please!

I want to see business opportunities increased so that more of today's US workers can become corporate competitors--not labor.

Place high taxes (70%) on business who cannot prove that the majority of their employees americans. Also place the same high tax on companies who cannot prove their products or services were manufactured and created in the US by US workers.

We nead to create a tax incentive for any company (domestic or foreign) to employ higher paid American workers. Give tax incentive on a increasing worker-salary graduated tax write-off for business when employing US engineers, computer programmers, accountants, etc. (Remember, many of those jobs have been lost to foreign nations and are not coming back). For example, provide a small tax break for companies who employ a certain number or percent of $20,000 to $40,000/year salaried employees. Provide an even greater tax break for companies who employ Americans and pay them $40,000 to $60,000 a year, etc. This would incentize companies to want to support an American technological society instead of destroying it, which has been happening over the last 40 years.

When current trends and practices are allowed to continue, the US will continue to fail until there is no US any longer. Where are you going to live when this happens? Foreign nations will not want you if you are past the age of 40 and do not hold at least a bachelors and masters degree or you have health problems.

Foreign countries are smarter than we are.

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