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Unions: The Great Divide


On Mar. 1, the House passed the Employee Free Choice Act, a bill that would change the rules of labor elections by replacing the secret ballot with "card check," a system allowing for union certification if a majority of workers simply signs up. In their Mar. 12 Welch Way column, "The Unemployment Act," Jack and Suzy Welch noted that the bill had been flying under the public radar and blasted it as an insidious threat to U.S. competitiveness. That set off a deluge of letters and e-mails. On at least one point, the Welches were unassailably correct: Many readers were unaware of the bill and thanked Jack and Suzy for bringing it to their attention.

Sorry, Jack and Suzy, but your anti-union mindset hasn't moved much past 1912. Unless you have been living in a cave (or the penthouse suite), employers introduced "intimidation," as you fear unions will, long ago.

As for the bloated economy of the 1970s and 1980s being the fault of labor, that was as much a collapse in managerial leadership as well as the work ethic. Remember, it was the design engineering committee that gave us the fabulous Vega, Pinto, and Maverick—not the American union worker.

Need more reassurance that unions won't kill our economy? Look at Southwest and Delta Air Lines. (DALRQ) One is a robust business, the other is in bankruptcy. Guess which company is heavily unionized and which is not? — Steve Filson, Danville, Calif.

As a former union activist who has been helping companies fight off unionization attempts, I have been attempting to draw attention for nearly two years to the devastating impact that the EFCA will have on U.S. companies and their workers. Unfortunately, business has been late on this one and still seems to be missing the boat. Although President Bush has vowed a veto, a congressman I met with recently stated matter of factly that the EFCA is not going to go away. In fact, Hillary Obama Edwards (our tripartite future President) has vowed to pass IT. — Peter A. List, Founder & CEO, Kulture LLC, Fairfield, N.J.

In an era when manufacturers, trying to meet the ever-lower price demands of Wal-Mart (WMT) and other big-box stores, jettison their entire workforce and move production overseas, it's patently nonsensical to blame unions for the collapse of U.S. industry. American businesses plot their own downturn when they sacrifice their workers: By cutting off employees from a source of steady income, they amputate their own consumers' buying power. That, in turn, leads to demand for even lower prices (from the now unemployed workers), and the business declines even more.

If corporations truly perceived their workforce as the corporation—as the assets that allow it to invest in itself and continue to prosper—the resurgence of unionism wouldn't be occurring. Yet because the execs in those corporations look at workers as costs, they consider them expendable. The Welches would have corporations treat workers like livestock, thinning the herd whenever weather turns bad. If senior executives think the only way to make companies more efficient and more productive is with layoffs, automation, and offshoring, it's time to send those perk-addicted self-preservationists back to B-school. — Peter Altschuler, Santa Monica, Calif.

I enjoyed "The unemployment act" and agree with you on the danger to competitiveness. I also agree that the secret ballot is a critical component of democracy as it mitigates the probability of retribution. I have always wondered why the secret ballot was not applied to shareholder votes. I would be interested in your thoughts on why the secret ballot should not extend to proxy voting. — Scott Newquist, West Palm Beach, Fla.

For a response to the Welches' central contention that raising union representation in this country from the current basement levels will cause mass unemployment, BusinessWeek readers need only look north. Card-check representation exists nationally in Canada, where the soup lines are not exactly overflowing. — Chris Kutalik, Detroit

I strongly agree with you, but I believe our future is dependent on the "core" of each individual American. And we have seen this core degrade on all levels. From the employee to the manager to the owner, we have seen more and more greed and selfishness. The proverbial "what is in it for me" scenario. Once we abandon this mindset, there will be a revitalizing of America. But we may have to take a little bit of a beating first. — Joel Watson, Fort Worth

Hey Jack, we've got you scheduled to run sewing machine #13 when you get to hell. By the way, that's in a nonunion shop. — Ron Ritsema, Allegan, Mich.

Ultimately, the wealth of a society is determined by its productivity. Over the past 200 years much of humanity has experienced increases in our standard of living and wealth well beyond the wildest dreams of what even kings could imagine. The reason: our productivity has skyrocketed as we found continuously better ways to do things, vastly increasing the size of the proverbial pie. The pie is indeed very dynamic. Unfortunately, the view of unions is that the size of the pie is fixed, and it is just a question about how to divide it up. If unions had had their way 200 years ago, the vast majority of us would probably still be living in what today would be considered squalor. — Chris Waldorf, Redmond, Wash.

The Welches should be worried about efforts to make unionization easier. The economy that so richly rewards them and a few others is one in which unions are much less of a force. The rest of us, however, need to remain concerned about "the twin deficits, low-cost Chinese manufacturing, and intellectual property piracy." These things, not labor unions, threaten our middle-class way of life. — Richard A. Levins, Professor Emeritus of Applied Economics, University of Minnesota, Minneapolis

Thank you for expressing the urgency for business owners in this disastrous legislative effort. I am a management-side labor attorney who has been warning employers for months to pay attention and speak up. — Seth Borden, New York

To blame the demands of union workers for the demise of some companies is a shot at the wrong target. Was it union demands or corporate greed that hurt or destroyed the likes of Enron, Worldcom, Adelphia, Tyco, (TYC) and others? Were they union workers or company executives on perp parade in handcuffs? — Fred Mussel, Emmaus, Pa.

Thank you Mr. Welch for the heads-up on this major proposed legislation. Its potential impact is enormous, yet this is the first I (and I'm sure many others) have heard of it. There should be open congressional hearings on this matter, with competent experts testifying. — Paul D. Johnson, Bethesda, Md.

One problem with the Welches' Lehigh Valley example is that the decline of the American steel industry had more to do with cheap imports (and a strong dollar) than with the unions or the age of the plants. And steelmakers' wages are less important than the Welches might like to think. (The U.S. still imports more steel from the European Union than from China, for example.) Another problem is their assertion that the current election system works well. Alas, companies intimidate pro-union employees with ruthless abandon.

I would shrug off the wrongheadedness of this column if Mr. Welch did not have the stature in the business world that he does. Surely he remembers that when he was running General Electric (GE), there were hundreds of thousands of unionized workers. Was GE hobbled by its union employees? Were they all freeloaders, demanding "two people for every job"? I think not. — Tim Francis-Wright, Medford, Mass.


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