To many Americans, the word "union" brings to mind a pot-bellied,
cigar-smoking, aging, male labor leader. Intertwined in the public imagination
with steel mills and assembly lines, unions are often thought of as anachronisms.
They had a role to play in the old economy, but not in the new.
There's more than a grain of truth in the belief that unions are out
of step with the times. The most powerful postwar unions blossomed in
big factories and big firms. By bargaining with industry leaders and then
spreading wage and benefit standards through pattern bargaining, they
helped create the demand that kept America's economic engine running.
In the factories, unions negotiated work rules linked to narrow jobs.
Managers were responsible for thinking, workers for doing - a split that
contributed to adversarial labor-management relations.
Since 1970, international competition, deregulation, and new technology
have undermined the stable oligopolies and regulated monopolies within
which unions prospered. The growth of the services, in which unions never
represented many workers, hastened their decline. Only 9.4 percent of
workers were union members in 1999.
As long ago as 1928, a U.S. Chamber of Commerce official famously remarked:
"American trade unionism is slowly being limited in influence by
changes which destroy the basis on which it is created. ... The changes
- occupational and technological - which check the advance of trade unionism
appear likely to continue. ... I see no reason to believe that American
trade unionism ... will become, in the next decade, a more potent social
force." Will similar predictions today turn out to be more accurate?
Should we worry about the possibility of life without unions? What Makes
the New Economy "New?" To answer those questions, we need to
consider what makes the New Economy "new." One striking fact
is that very few jobs today (we estimate 5 percent) are broken down and
scripted in classic production-line fashion. Most people now perform tasks
that vary unpredictably, because they're working in a hospital or a restaurant
or an office.
In the New Economy, productivity gains come, as in the past, from technology.
Voice recognition means telephone companies need fewer operators; electronic
data transfer means organizations need fewer clerks and low-level managers.
But productivity improvement today depends more than ever on what we call
"economies of depth" - the ability of employees to solve problems,
customize services, and improvise - and on "economies of coordination"
- the ability to work cooperatively so that the conference runs smoothly,
the insurance policy gets issued in days instead of weeks, and hospital
patients get the care they need when they need it.
The good news is that economies of depth and coordination remain largely
untapped. If we can learn how to exploit them, we can enjoy a new era
of extended prosperity that offers more satisfying jobs and a better quality
of life.
The bad news is that the New Economy is largely failing to generate
the worker skills it needs to function at peak efficiency. One reason
is that firms no longer expect to employ workers indefinitely (in the
extreme, until retirement). This exacerbates an old problem: Firms have
no incentive to train workers who may soon be "downsized" or
quit.
In theory, workers themselves could pay the bills for acquiring the
skills employers desire. But many young and low-wage workers cannot do
so. Besides, if they have no assurance of a better job when they finish
their training, why should they risk a substantial investment? And even
when workers, firms, or the government do pay for classroom training at
educational institutions, this rarely transmits the often tacit, context-specific
know-how essential to peak performance in customer-contact, human service,
information, and technical work.
If unions are able to adapt, they could help solve the "free rider"
problem that makes firms reluctant to invest in training. They can do
so by drawing on the rich legacy of craft unions. Like the guilds from
which unions first arose, craft unions have always defined themselves
as defenders of quality. In the construction industry, unions negotiate
arrangements under which contractors share the costs of jointly managed
apprenticeships. These programs integrate classroom training with on-the-job
mentoring to consolidate workers' practical knowledge. They develop the
skills essential to wire a home properly or weld a cross- county pipe.
Construction also illustrates what happens when unions weaken and decline.
Starting around 1970, non-union construction firms expanded by undercutting
union contractors. They pushed down wages, driving experienced workers
from the industry, but hardly ever contributed to apprentice training
programs. Today, the industry is starved for skilled workers. What homeowners
and other construction customers have gained from cheaper labor, they
lost in lower productivity and shoddy quality.
As in construction, unions rooted in New Economy occupations and industries,
rather than in individual firms, could promote training and peer learning.
They could make occupations the new locus of job security. Unions that
cut across employers could help provide portable pensions and health care.
Relieved of individual (though not collective) responsibility for employment
and economic security, companies would have the flexibility to adjust
their workforces to meet demand. With less to fear from downsizing, and
with less inequality within and across employers to feed resentment, workers
would be more willing to cooperate to improve performance.
America will never become a nation composed only of New Economy software
engineers and other "knowledge workers." There will always be
demand for what are now low-paying, labor-intensive services: in nursing
homes, hotels, trucking lines, theme parks, and child care centers. There
is no escaping it: Policies that raise the quality and status of what
are now low-paying service jobs must be part of any strategy for expanding
the middle class (just as industrial unions lifted auto workers into the
middle class). We cannot create enough good jobs without more collective
bargaining at the bottom of the labor market and without a major increase
in the minimum wage.
Is Labor Up To the Challenge? Many labor leaders who began their careers
as far back as the 1950s have been bewildered by the decline of the old
economy. But now a generational transition is bringing to power men and
women who have only known a world in which union power has been declining.
Their starting point is that the balance of power in the United States
is out of whack - corporations and the rich have too much power; ordinary
working people and unions have too little.
To New Democrats, the often militant rhetoric of new union leaders and
their "New Leftover" staff may sound more backward-looking than
that of their predecessors - as if rather than adapting to the New Economy
all the situation called for is a heavier dose of militance. Still, despite
public gestures and habits that New Democrats view as pointing to the
past, the House of Labor is beginning to innovate. Across the country,
unions are laying the foundation for a labor movement that meshes with
the New Economy:
Manufacturing unions spurred the creation of
the Wisconsin Regional Training Partnership, which now includes 56 firms
and 60,000 workers. The partnership addresses skill shortages and work
reorganization that help local firms compete, thereby creating new high-wage
jobs in the Milwaukee area.
In Las Vegas, the hotel workers' union and major hotels joined to
form the Culinary Training Institute. The Institute has trained 14,000
new employees for the area's worker-hungry hotel and restaurant industry.
In Philadelphia, the United Child Care Union has launched a multi-faceted
organizing campaign designed to improve the quality of care as well
as jobs, in part by creating an area-wide occupational association for
child care workers.
In Pennsylvania, two major health care unions have joined with industry
and professional associations and advocates for the elderly to promote
"culture change" in elder care - loving care instead of the
life-draining care delivered by low-wage, higher turnover Medicaid mills.
The unions recognize that simply locking horns with providers cannot
give workers dignity and job satisfaction.
In San Jose, the local council of labor unions - led by the young, charismatic
Amy Dean - is seeking to adapt to the Silicon Valley economy, in which
as much as 40 percent of employment is in temporary, part-time, contract,
or self-employment. The council set up its own nonprofit organization
and temporary agency, which has supported the creation of a modularized
associate's degree that office workers can rely on to seek career advancement.
The final pieces of the puzzle to date: an advocacy effort and an association
of temporary workers. These seek to raise employment standards in the
short run, and they point toward the possibility of a craft-like union
of "entry-level information workers" in the future.
Increasingly, the AFL-CIO under John Sweeney is supporting local innovation.
For example, two programs - "Union Cities" and "A New Alliance"
between local AFL-CIO councils and state federations of labor - are bringing
strategic planning to subnational labor bodies, an essential first step
to unions' reorienting themselves to add value as well as values to state
and regional economies.
And the AFL-CIO has created the Working for America Institute that is
focusing on how to promote "high road" economic strategies based
on economies of depth and coordination and on expanding opportunity for
workers. The institute is also delivering critically needed technical
support to new labor-management training partnerships popping up across
the country.
Broadening the Effort
How can we help unions adapt to the New Economy? Giving union innovators
more visibility and support would be a start. This would send a strong
message to the labor movement that it could broaden its public base by
engaging with the New Economy rather than condemning it. For example,
the Commerce Department's coveted Malcolm Baldrige awards go only to individual
firms on the old economy presumption that firms bear most of the responsibility
for productivity improvement. Why not create a new category of awards
to encourage occupational and professional associations, multi-employer
organizations, and labor-management partnerships? Wouldn't it be good
to recognize teachers' unions such as those in Cincinnati and Toledo,
Ohio, for embracing peer review and peer-mentoring programs that measurably
improve teaching? To engage unions more deeply with the New Economy, we
need to increase state and local, as well as federal, seed funding for
labor-management partnerships linked with key industries. The Department
of Labor has just awarded nine grants of about $750,000 each to union-supported
regional training consortia - for technology occupations in Washington
state, farmworkers in California, nursing homes in Florida, and information
jobs in New York, among others. In occupations such as computer programming
and systems support, new unions that operate mentoring and apprenticeship
programs would do more to end skill shortages than college programs leading
to degrees in computer science or bringing in more foreign "guest
workers." A third step would be to encourage employer neutrality
when workers seek to form unions. Without anti-union campaigns, labor-management
relationships would not start off as poisonous and would be more likely
to lead to strategies that serve consumers and the public as well as workers.
In Philadelphia, in a sadly typical case, when the United Child Care Union
sought representation for 400 Head Start workers, the nonprofit employer
hired an anti-union consulting firm. When the union won a certification
election anyway, by a 2-to-1 margin, the employer announced it would give
up its Head Start contracts. In the transition to new contractors, many
workers lost their jobs, others took large pay cuts, and no one gained
the union representation for which they had voted. Needless to say, the
children bore part of the burden. Although federal labor law limits what
federal agencies, states, and localities can do to protect workers' right
to organize, scope does exist for promoting true neutrality, particularly
when organizations receive public funds. In addition, federal contractors
that violate workers' rights to organize in union certification campaigns,
for example, could be denied public funds for several years thereafter.
In the long run, it will take a New Economy version of the Wagner Act
to generalize the shift from old to new unionism. The promotion of worker
voice and bargaining at the multifirm and occupational level will be central
to such a transition. The essence of the new social contract - the New
Deal for the New Economy - must be: Workers and unions will deliver responsible,
high-quality service; in exchange, society will support a union's right
to exist and all workers' right to economic security.
To those who find our proposals unpalatable, we offer a simple challenge:
Tell a convincing story of how America will restore widely shared prosperity
without a revival of the labor movement. We can't think of a way, and
we've been pondering this question - as opposed to willfully ducking it
- for years.
