September 1, 2006  Volume 107 Number 17

The State of the Unions

In 1884, the early labor union Knights of Labor declared it would observe the first Monday in September as Labor Day. Three years later, Labor Day became a federal holiday.

Though picnics came to replace parades as the preferred observance for the union faithful Labor Day remains a day to celebrate union victories for working people. But union victories are few this Labor Day, which comes in an anti-labor year, in an anti-labor era dating back 5, 25, or 33 or 59 years.

Unions are under political attack.

A Washington, D.C., group with links to the U.S. Chamber of Commerce said in August it will buy $1 million of television and newspaper ads in the coming months targeting unions in states like Oregon. The ads attempt to discredit and disgrace unions using crude stereotypes about overpaid union bosses and snarling government bureaucrats.

2006 is the fifth year of a White House Administration that labor leaders regard as the most anti-union in living memory. In five years, the president has met with just two labor leaders (Carpenters president Doug McCarron, and Teamsters president James Hoffa Jr.). To federal agencies in charge of workers’ rights and protections, George W. Bush made pro-business and anti-union appointments, from the Department of Labor and the National Labor Relations Board to the Mine Safety and Health Administration.

Political attacks matter, because almost everything about the way unions operate is defined by law. And changes in the law, going back as far as 59 years, have fueled labor’s decline.

The National Labor Relations Act of 1935 set up a process for unions to be certified as the exclusive bargaining representative for groups of workers, and it ordered employers to negotiate when a majority of workers declared support for a union. Unfortunately for unions, the law didn’t have sufficient penalties to force employers to negotiate. But workers were feeling their power, and used the strike to get employers to make concessions.

The National Labor Relations Act also said workers had the right to strike, and couldn’t be fired for striking. But they COULD be “permanently replaced,” said the U.S. Supreme Court three years later.

Then, in 1947, the Labor-Management Relations Act (better known as Taft-Hartley) rewrote the National Labor Relations Act, hemming in labor and foreshadowing its decline. It outlawed the closed shop, allowed states to ban the union shop, limited unions’ use of boycotts, and set up tight restrictions on picketing and fines on unions that violated those restrictions.

That 1938 Supreme Court decision lay mostly unused. Employers could permanently replace strikers, but they didn’t, because such conduct was considered beyond the pale. Until August 1981. When 13,000 air traffic controllers struck the Federal Aviation Administration, Republican President Ronald Reagan fired them and ordered replacements to be hired and trained. If the highest office in the land could do it, so could America’s corporations. Employers’ ability to permanently replace strikers reduced the effectiveness of labor’s ultimate weapon and reduced unions’ ability to win gains for members.

Despite the political defeat of Taft-Hartley, unions continued to grow as a proportion of the workforce — for six years. Union membership peaked in 1953 at 32.5 percent (one in three workers) and has fallen ever since. Today it’s 12.5 percent (one in eight workers).

According to the most recent data from the federal Bureau of Labor Statistics, 15.7 million Americans were union members in 2005.

Oregon had 213,000 union members in 2005, or 14.5 percent of the workforce, down from 22.3 percent in 1983.

Judging by annual reports filed with the Labor Department, most Oregon unions have lost members in the last five years.

Membership at most Oregon building trades unions declined slightly from 2000 to 2005, but in the last year, a construction boom has brought in new members and kept existing members fully employed.

In Oregon, two exceptions to the overall decline are the public employee unions American Federation of State, County and Municipal Employees, and the Service Employees International Union Local 503. AFSCME grew 6 percent in five years; Local 503 grew 47 percent in five years, though almost all of that growth was due to a single victory — the unionization of low-wage in-home health care workers.

In general, the public sector is the only area in which unions are growing. For the most part, public sector workers didn’t get the right to unionize until after labor’s peak.

Today, the difference is startling: Nationally, 36.5 percent of government workers were unionized in 2005, compared to 7.8 percent of private sector workers.

But the growth spurt of public sector unions may be slowing now too.

“We’re sensing more tendencies among public employers to adopt private sector methods of union resistance,” said Dick Schwarz, executive director of the American Federation of Teachers-Oregon.

Why does union decline matter? Because unions have been the number one vehicle for working people to claim their share of the nation’s wealth.

First and foremost, unions help their members, enabling them to get greater pay and benefits than similar workers who don’t have unions. This is referred to as the union premium. In 2005, the union premium was 14.7 percent. That’s the amount union wages exceeded non-union wages, given the same industry, occupation, education, experience and other factors. Unionized workers were also 28.2 percent more likely to be covered by employer-provided health insurance, 28.4 percent more likely to have employer-provided pensions and are 24.4 percent more likely to receive health insurance coverage in their retirement. Unionized workers also got 14.3 percent more paid time off.

But union wins for their members also benefit working people as a whole: higher union wages may set a standard for other employers to follow, either to attract the best employees, or to avoid unionization.

But declines in union clout may have put the fortunes of working people in jeopardy.

Here’s what’s happening: U.S. productivity rose 16.6 percent from 2000 to 2005, but inflation-adjusted wages for most workers have been flat or falling. In other words, American workers were producing one sixth more wealth than five years prior, but the fruits of the growth were increasingly flowing to the top, particularly the top 1 percent.

Without strong unions, workers’ ability to claim their share of the new wealth is weakened.

On the ground, for union members, it means reduced expectations: Unions are fighting just to stand still, particularly with health care.

Asked to name the three thorniest issues in contract bargaining, AFSCME Oregon Council 75 Executive Director Ken Allen responds: “Health care, health care, and health care.”

Employers are increasingly trying to limit the burden of rising health care premiums, and unions are resisting. Often, preserving health benefits comes at the cost of smaller wage increases.

Will labor’s fortunes turn around? It’s hard to imagine labor regaining clout without regaining members, and regaining membership will be hard without change in the law or the spirit of the times among working people.

But some labor leaders look for hopeful signs.

Vehemently anti-union Wal-Mart is on the defensive, and may make some positive changes to improve its public image.

Oregon AFL-CIO President Tom Chamberlain is encouraged by the thought that the president’s low poll numbers may lead the more pro-labor Democrats to take back the U.S. House, and the Oregon House, for that matter.

Public anxiety about the trade deficit and offshoring — of manufacturing, high-tech, call center, and any number of other jobs — could create political pressure to do something.

Until then, Labor Day may need to become less about looking backward to victories and more about looking to the present to protect them, and to the future to win back the gains of the past.