The Death of Unions

Organized labor is in the midst of being an afterthought. Throughout the union heyday of the fifties and sixties, a member of a union was guaranteed a reasonably steady income with a retirment package that would sustain them through their later years. It was good deal for the workers.

It was such a good deal that employers felt like they were getting a bad deal; rising costs forced the unions to increase benefit costs; which were then passed on to employer. Employers were courted by nations in Asia and elsewhere and realized that their bottom line showed a greater profit if they moved manufacturing overseas. China and Taiwan replaced Evansville and New London.

In the meantime, the unions banked on there good will with the Democrats who at that point were entrenched in power. They supported the Democrats blindly and the prospective candidates bowed down to the AFL-CIO and AFSCME's power. So much so that local unions in Philadelphia, northern New Jersey and NYC had election day written in their contracts as paid days off. The union's to this day will send battallion's of members to drive people to the polls and get out the vote. Sometimes legally, sometimes not.

While enjoying the sunny glow of shacking up with incumbent politicians (generally Democrats), the union's failed to see the US working environment changing. Instead of manufacturing, the US became a service oriented country. Lots of small businesses started up and the bigger corporations were centered on high technology manufacturing and research and development. The workers in these types of occupations were not the under educated type that led to the rise of unions, but well-educated people who were paid good money right out of college and didn't want or need union affiliation.

For those who don't understand how unions operate, here's a short primer. Let's look at the labor-type unions. Generally, a laborer will join a local and be placed on a list. A construction contractor will win a bid to erect a new building, such as a library. The contractor will call the local and request 10 workers. The workers will be put on the payroll of the contractor after the contractor signs an agreement with the local. The contractor will pay not only the salary of the worker, but also into a benefits fund. The benefits portion is 1/2 to double the salary portion. This is a huge added expense to the contractor, but more so to the corporation or municipality who is paying for construction.

The laborers work at the site and get paid every week, which is another burden on the contractor as they must expend time and resources on collection and disbursement of payroll checks.

When the work is completed, the laborers are laid off and they return to the hall. Some of the better workers will be carried by the contractor and utilized on other job sites.

If the construction sector is going full-bore, as was the case over the last few years, the hall is generally empty and everyone is working. When things slow down, the hall fills up and a waiting list is employed that determines who works and when.

Now, unions are being tossed aside as smaller construction firms, such as those who build homes, are utilizing skilled, non-union labor. These workers tend to work for less money but receive benefits such as health insurance and vacation time that is paid for by the employer.

Here is a good, if somewhat dated, synopsis from 1998:

New employment legislation has made it easier for workers, without the assistance of a union, to challenge unsafe working conditions, job discrimination, workplace harassment, and unjust dismissals. Compensation provided through unemployment insurance and welfare benefits can also replace traditionally union-provided benefits and services. Some evidence suggests that increased government expenditures on social services have created less of a perceived need for unions in the workplace.4 Furthermore, federal deregulation and the 1948 Taft-Hartley right-to-work provisions have transformed the organizational climate facing unions.

Here's a pro-union blog that seems to be updated often.

Getting back to unions and politics; where I live in the northeast, unions have immense pull and their backing can almost ensure that a candidate wins an election. The problem arises when they have to repay their debt. An great example was when Jim McGreevey was elected Governor of New Jersey, one of his first acts was to force contractors who win state work to use union labor.

The New Jersey Business and Industry Association summed it up thusly:

"Without so much as one public hearing on the issue, Governor McGreevey has gift wrapped billions of taxpayer dollars and given it to the labor unions," Stoller said. "This order will create a virtual monopoly for labor unions. It will effectively shut out hundreds of qualified contractors and thousands of nonunion workers from participating in state public contracts. Every public works project impacted by this order will cost taxpayers more."

That order still stands even though McGreevey is long gone.

The public, however is becoming hip to the fact that using union-only labor increases costs dramatically. The aforementioned smaller contractors are making a lot of noise and that noise is slowly being heard.

This post is not meant as pro or anti-union, it is meant to comment on the state of organized labor in the US. The power that unions once held over state politicians is slowly eroding away and with that erosion will come a new day where unions will be forced to compete on a level playing field or they will die.