What will replace unions?

By Felix Salmon
January 10, 2011
Jim Surowiecki has an excellent column this week on the declining influence, and increasing unpopularity, of labor unions:

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Jim Surowiecki has an excellent column this week on the declining influence, and increasing unpopularity, of labor unions:

The advantages that union workers enjoy when it comes to pay and benefits are nothing new, while the resentment about these things is. There are a couple of reasons for this. In the past, a sizable percentage of American workers belonged to unions, or had family members who did. Then, too, even people who didn’t belong to unions often reaped some benefit from them, because of what economists call the “threat effect”: in heavily unionized industries, non-union employers had to pay their workers better in order to fend off unionization. Finally, benefits that union members won for themselves—like the eight-hour day, or weekends off—often ended up percolating down to other workers. These days, none of those things are true…

Labor may be caught in a vicious cycle, becoming progressively less influential and more unpopular. The Great Depression invigorated the modern American labor movement. The Great Recession has crippled it.

I can’t envisage unions ever getting their mojo back in the US private sector. At the same time, however, I can envisage a world in which the pendulum of power starts swinging back towards labor and away from capital. What I’m very unclear about is how that’s going to happen. Unions have lost their power, and Marxian rhetoric in general, about class or rent extraction or the balance of power between capital and labor, is treated with great suspicion by the broad mass of the population.

Meanwhile, of course, as Chrystia demonstrates, the people who control capital are willing and even eager to take money they would otherwise use employing middle-class Americans, and spend it on cheaper and equally productive workers abroad.

If the era of the union is over, as it seems to be, what other countervailing force will work to preserve the value of labor? Somehow I doubt that an epic shift to a new human age will manage to do the trick.

15 comments

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I thought people supported unions because they thought the only way to stand up to the immense power of management was through collective action. Maybe they simply no longer think that is necessary in the world of the modern regulatory state, relatively uncorrupted government, and Monster.com.

Posted by OneEyedMan | Report as abusive

I grew up in an American Steelworkers Union household, and in a company town (I mean that literally; the steel company built the town from scratch). My civics courses through high school included a heavy indoctrination of the organized labor point of view. In the 1960s and early 1970s, the balance of power was decidedly tilted toward organized labor.

With the tacit cooperation of management and the active intervention of the Federal government, I saw the union make the steel industry uncompetitive. It served its purpose, but was a relic of an earlier era. As an adult professional coming of age circa 1980, I was confident enough in my own abilities to rail against the union’s fundamental belief that all workers were equally capable and motivated.

If we fast-forward to the dotcom boom, professional skilled labor largely had the upper hand, even in an era where outsourcing was becoming increasingly common. A few years later, capital seems ascendant. My point is that what goes around comes around. Given a few years, it is highly likely that skilled labor will once again gain the upper hand.

The flip side of that is that unskilled labor remains in serious trouble, and I don’t see that changing.

Posted by Curmudgeon | Report as abusive

I do think that “monster.com” and the move to more portable retirement plans provide more power to workers than collective bargaining did, at least in some ways; more portable health insurance would be another step in that direction.

My understanding is that Supreme Court decisions from the sixties and thereabouts more or less required that unions in this country be pretty reliably antagonistic to management and capital, whereas in Europe common sense and cooperation are often permitted. If this understanding is to a substantial degree correct, perhaps what we need is a move toward something that looks like a labor union, but is freer to work with instead of only against management, and must, for the time being (for both political and legal reasons), be called something else.

Posted by dWj | Report as abusive

Just because unions are unpopular outside of their industries won’t make them go away. Unions can still stitch up selected industries very successfully, especially government provided industries where breaking the union might lead to the loss of elected members. It’s equivalent to selective support for localised companies who employ lots of staff in marginal seats, which hasn’t gone away yet.

Posted by willderwent2010 | Report as abusive

Labor may be helped when China eventually reaches a high average standard living. Most workers in US manufacturing are rightfully terrified of losing their jobs to overseas workers.

The bankruptcy of GM and Chrysler, the towering icons of American manufacturing, was the worst kind of body blow for unions. Whether true or not the consensus view is that the unions took them down. Unions have eaten their young. At GM and elsewhere, young autoworkers have been pushed in front of a train, getting just 50% of what you get if you are grandfathered in for the same work.

Needless to say, those young people don’t feel warm and fuzzy about unions.

Posted by DanHess | Report as abusive

Um, ultranationalist movement(s)?

Posted by Uncle_Billy | Report as abusive

dWj, I once taught at a school whose union (albeit formally called an “Association”) exemplified that approach. Of course they still pushed for better pay and benefits, but they also worked closely with management on appropriate rules and procedures. The system worked pretty well and without noisy friction.

I do believe there is an essential role for unions in public education. As long as the funding process is heavily politicized, there will remain small-time politicians who try to throw their weight around when their son or daughter receives a poor grade for poor work. That happens even today, more frequently than you might imagine, but (thanks to the unions) you can’t dismiss a teacher without cause and thus they can do little more than make the teacher’s life miserable for a while. And no, I’ve never been the focus of such retribution — but people I respect have.

Posted by TFF | Report as abusive

Uh, I think Curmudgeon is actually channeling me; I still have an old membership card for the steel workers local from my late father.

But, my own experience with the AFL-CIO was not as good as my father’s. As a member of the SEIU, working grocery stores during college, I found the leadership utterly corrupt, my local representative a drunk and an incompetent. As a manager in a government IT shop I found the union only came around to ‘defend’ people that suffered from serious personality disorders; literally so dysfunctional that if they lost their jobs they were headed to homeless babbling on the street. Actual work contribution from them was not something the union was concerned about, so the affect of the union was to cripple the organization and wash their hands.

The U.S. needs to do four things for it’s workforce

1) Improve the defined contribution process, and insure that people leave the money alone. With a highly mobile workforce, DB plans are probably no longer possible. The Feds themselves moved that direction when they switched from CRS to FERS.

2) Health care, especially during periods of unemployment

3) Re-education opportunities

4) Some form of transitional income during the retraining process. High enough to stay alive, low enough to provide an incentive to seek alternatives.

I don’t hear the AFL-CIO making that their priorities, I see them trying to prevent change. That’s always a losing proposition.

Posted by ARJTurgot2 | Report as abusive

“I can’t envisage unions ever getting their mojo back in the US private sector.” You seem to have forgotten that the largest private employer in the United States is Walmart. Let me say that again, in nearly 40 states, more people work for Walmart than any other private enterprise.

It is true that the broad mass of workers in this country do not see unions as the solution to their station in life. For 1.5 million workers means little or no control over their hourly schedule – including how many hours they are scheduled to work in a week. It means earning wages just above the federal minimum wage and having no retirement account, paying out of pocket for health insurance, and most likely, putting their kids onto state-funding public health care, food stamps and the like. This is the new America and this is America’s future unless we collectively decide that we want something different or better.

Wall Street had a collective panic attack at the idea of labor law reform in this country and business interests succeeding in terrifying Congress that giving workers a fair shake at joining a union would signal the end of our democracy. If you accept that premise, than you must accept that the Walmart employment model is the model that shapes the future for my children and for yours.

The only way to level the playing field – which means Walmart associates need to earn a little more money, they need to have enough to put into a retirement account, they need to have affordable health insurance and work enough hours so that they no longer qualify for public assistance – is to change the rules so that associates can advocate in a fair environment for themselves. And that will mean that the Walton heirs and their collective fortune might shrink a tiny bit. Personally, I think America deserves to get a little bit of that money back…spread down into the paychecks and bank accounts of the 1.4 million workers who ring up the sales and stock the shelves of every Walmart store in America.

Posted by uniongal | Report as abusive

Well, that’s the rub, isn’t it, uniongal? We love Walmart’s low prices. Even when they aren’t the lowest, Walmart is so large that it sets the price standard for everyone.

When I was growing up in that company town, there were few alternatives for commerce beyond the company store, and we lacked the information needed to compare prices, and the shopping alternatives. Today, hundreds of prices for dozens of comparable products can be had in a few minutes, and we can have our selection shipped right to our house.

As consumers, we love that. It empowers us and gives us the choice we never had thirty years ago. But we have to work in that same world, which means that we work harder than ever, for wages and salaries that don’t reflect our increasing productivity. Throw in the rest of the world, which is pleased as punch to do as good a job as we do for a fraction of the cost.

The only response I’ve seen from unions to that dilemma is to call for more unionization (only we can solve the problems that we have no idea how to solve), restricted trade, and penalties for outsourcing. In all likelihood, those responses will make us poorer, not richer, in part because we lose the low prices on which we as consumers have come to depend.

I wish I had an answer, but I don’t. And I am pretty sure unions don’t, either.

Posted by Curmudgeon | Report as abusive

I think you have to separate public sector from private sector unions. Private sector union jobs are disappearing b/c they tend to dominate high fixed cost industries that are dying in the US. Nevertheless, I don’t see them as “unpopular.” Alternatively, public sector unions are going to continue to become less popular as the public begins to view them as getting “rich” on the public dime.

Posted by Boyardee | Report as abusive

Curmudgeon, why do you say “we” love WalMart’s low prices? I almost never shopped there, even when I was a dirt-poor graduate student. I don’t think WalMart is an economic or social necessity. By contrast, the disappearance of unions has, in the U.S. at least, removed the constraints from business interests that motivated them to act decently. Now the dominant business model is to develop fiendishly complex business schemes that allow the lucky few insiders to walk away with unimaginable wealth, while the broader public is left with debt.

Posted by ChristianPinko | Report as abusive

I’m sorry, Christian. The goal of unions is to benefit their members through higher pay and benefits, and more political power for themselves. That’s not the same thing as getting business to act decently. Now, I’m not saying that business behaves any different; rather, I’m saying that unions are fighting the last war, rather than looking at the forces that are bringing about the changes we see. We are not going to reverse globalization (if we try, we will end up poorer), so unions and management have to look at adapting the workforce to this change.

And yes, I think the American consumer has voted on lower prices and the ability to price compare from the comfort of our living room, and the vote is a resounding yes.

Posted by Curmudgeon | Report as abusive

Reuther though, did not feel totally comfortable about the direction they went on the wages and benefits issue. He tried to get the government involved in a national health care system in the ’60s and finally gave up and simply did it for union members. GM, etc. was glad to buy him off with better benefits packages. Lots of very old chickens are now coming home to roost.

One of the things I found interesting during the takeover of GM was the reporting that came out after the lid came off about its internal operations. For all the BS and posturing and blaming things like labor costs, they didn’t seem to have systems in place to do things like simple cash flow management.

Posted by ARJTurgot2 | Report as abusive

I’m so late to this thread that few will probably read this but my two cents on who will replace Labor unions in the fight vs capitol is AARP.

AARP is already fighting hard to defend social security which for the first time is a negative income stream for uncle Sam. Keeping that promise was easy when it meant billions coming in for congress to steal for other uses… during the recession it meant that briefly billions were going out as so many were unemployed and so many filed for early retirement benefits.

The number crunchers think that negative cash flow will temporarily reverse back to positive… but only for a couple years at most. Soon the outflows will exceed inflows permanently. Then each budget battle in congress will include a fight over social security and Medicare.

AARP will organize an army in the tens of millions to fight for the benefits they have been promised. There will be rallies, marches, town hall meetings, all of it. In the end I think they will succeed in keeping social security largely untouched… taxes will be raised on the affluent.

Medicare as it is currently structured is toast. My wife’s grandfather, a war hero, a 45 year contributor in the work force and a great guy all around was life-flighted 3 times (this at 77 and twice at 79 years old)from the rural hospital near his home to a major hospital. He probably spent 3 months in an ICU at what $2,500/day?

That math can never scale as the population of seniors skyrockets.

Preventive care will be covered, generic drugs covered,
but helicopter rides to the ICU for a 4 week stay that buy you another 4 months of a low quality life won’t last the fiscal reckoning that has already begun.

The old (retired, semi-retired and retired) will join hands with younger workers demanding that corporations and their affluent shareholders support those who have less.

Posted by y2kurtus | Report as abusive