A union battle whose time has passed

Steven Pearlstein
Columnist December 15, 2012

When Michigan joined the ranks of “right-to-work” states last week, I had two seemingly contradictory reactions. The first was that it was a historic turn for the American labor movement. The second was that it was largely irrelevant.

For organized labor, there is a tipping point at which the threat of crippling strikes becomes credible and unions enjoy enough political power to protect their legal rights. On the way up, that tipping point was probably reached, at least nationally, during the 1930s. Last week’s news from Michigan, the birthplace of the United Auto Workers Union, provided stunning confirmation that the tipping point has now been breached on the downside.

Steven Pearlstein is a business and economics columnist who writes about local, national and international topics. View Archive

This development caps a 75-year campaign by the business community to snuff out the right of workers to bargain collectively. All that talk about defending the right of workers not to be forced to pay union dues is nothing more than corporate propaganda. The real aim is not freedom of choice for workers but the freedom of employers to operate in whatever way they please without interference from their employees.

The causes of the decline in union power are well known: labor-saving technology that reduced the demand for unskilled and semi-skilled workers; competition from cheaper foreign workers; structural shifts in the economy toward the service sector and smaller firms, both of which proved less amenable to unionization; and deregulation of transportation and communications industries that had been accommodating to unionization.

Much of the growth in union membership in recent decades has come in the public sector, but even that has proven to be a mixed blessing once voters came to realize it was they who were paying for all that job security and generous pensions.

And across the Rust Belt, there is also a growing resentment against unions whose over-reaching is widely viewed as contributing to the region’s economic decline. For years, places such as Detroit, Milwaukee, Cleveland and Gary, Ind., have had on offer everything a global manufacturing firm might desire: cheap land, empty factories, large pools of trained and experienced workers, well-established transportation networks and governments desperate to accommodate. If you ask manufacturing executives — as I have on many occasions — how they can pass up such offers, the answer invariably comes down to apprehension about unions and workers accustomed to a unionized work environment. That surely helps to explain why Wisconsin, Ohio, Indiana and now Michigan have recently enacted laws meant to signal that these state should no longer be viewed as union strongholds.

While there may still be great symbolic significance to Michigan’s right-to-work law, there is no longer much practical significance. This is an old fight about an outdated idea that has little resonance in today’s economy.

Back in the ’50s and ’60s, when firms began to move operations from New England and the Midwest for the South, right-to-work laws were surely part of the attraction, along with cheap land, low taxes, lax regulation and a pool of unskilled workers just off the farm and desperate for employment. Since then, of course, a lot has changed. Now, companies looking for cheap labor can go to Mexico or Vietnam, while the weakening of union power over the years has largely closed the gap between the cost of unionized and non-unionized labor.

Contrary to popular belief, state right-to-work laws don’t make it any harder to organize a union — those rules are set by federal law. All the state law does is make it possible for workers to opt out of paying their fair share of the cost of negotiating and implementing contracts. Yet even that doesn’t result in much of a difference. The percentage of workers in right-to-work states who chose not to participate is only 10 percentage points less than it is in non-right-to-work states. There are even right-to-work states, such as Nevada, where voluntary participation approaches 100 percent.

It is easy to dig up statistics showing that right-to-work states have slightly lower wages, lower unemployment and higher job growth, just as you can dig up statistics that show those states have significantly higher on-the-job injuries, less health care, less education and lower living standards. But these are examples of correlation, not causation. There is little or no evidence that such differences can be attributed to right-to-work laws. These states tend to have a variety of pro-business policies and anti-union cultures that, in terms of their economic impact, are almost impossible to untangle.

Oklahoma offers a good case study. In 2001, the state enacted a right-to-work law in the hope of attracting lots of new investment and manufacturing jobs. But in the ensuing decade, the manufacturing sector shrank while the number of companies moving to the state fell by one-third. Over the same decade, Oklahoma saw its median household income go from being 15 percent above the national average to 3 percent below. Is all this the result of right-to-work laws? Of course not. But it also casts doubt on specious claims that such laws are the magic elixir for economic development.

The larger truth is that right-to-work laws have become increasingly irrelevant — along with the old model of labor-management relations that no longer works for almost anybody.

In that old model, unionized workers looked to stable employers to provide them with lifetime jobs, free health insurance and generous pensions, with pay based on longevity and job classification based on seniority. Little of this is now possible in a world in which competition is global, workers are mobile, companies are regularly sold or go out of business, and more work is done by independent contractors and part-time employees.

At the same time, workers now find it almost impossible to form a union in the face of a company determined to use bare-knuckle tactics to defeat them, including the firing of ringleaders and threats of layoffs and plant closures. Even in cases where the union does manage to get certified, many firms simply refuse to negotiate a first contract. And if workers decide to go out on strike, they are likely to find that nobody is willing to honor their picket line — not the truckers delivering supplies, not the customers, and certainly not the workers who line up around the block to take their place.

In this new world, it may make more sense for workers to forget about plant-by-plant, organizing and go back to an older “guild” model in which individual workers join a union that provides them with a range of vital services and negotiates on their behalf with a wide range of businesses and employers.

Those services might include training and job placement, supplemental unemployment services, health insurance and pensions, consumer loans and credit cards.

And those negotiations could take many forms. They could be with industry associations representing the top employers for an industrywide contract. Or they could be with government regulators, who could be pressed to establish standards for pay or benefits or working conditions. Or they could be with banks and financiers or ratings agencies or consumer groups, any of which could be pressed not to do business with companies that failed to meet certain minimum standards. Union negotiators could get their leverage from the threat of disruptive industrywide strikes, from the clout that comes from political organizing and by marshalling of public and consumer opinion at a time of heightened concern about economic inequality.

The Service Employees International Union showed how this could be done years ago with its successful Janitors for Justice campaign in cities across the country, in which owners of large office buildings were coerced, largely through political pressure and public opinion, to sign contracts with union locals.

In New York City, the Taxi Workers Alliance has used the threat of strikes by independent cab drivers to win rules changes from the taxi commission and better arrangements with vehicle owners.

In Los Angeles, day laborers are trying to create a modern version of the old hiring hall, offering a reliable source of experienced workers in exchange for higher pay and modest benefits.

And in Chicago, the Service Employees International Union has been experimenting with trying to organize retail and fast-food workers citywide as an alternative to traditional organizing campaigns.

It was there, at the bottom of the economic ladder, that the union movement got its start.

It was there, at the grass-roots level with sit-ins and boycotts and general strikes, that the union movement first got its power.

It was there, with industrywide organizing, that the union movement first got its toehold in the garment factories, the steel mills and the coal mines.

And it is there, I suspect — not defending $35-an-hour jobs for auto workers or $100,000 pensions for retired prison guards — that the union movement will have to return for its revival.

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