4-17-07 - 151 lecture Why Have Unions Declined? Can they...

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Unformatted text preview: 151 lecture Why Have Unions Declined? Can they Revive? A. Demand and supply framework? --For economists, a natural starting point for understanding trends in unionism involves examining shifts in demand and supply curves, in this case the demand for unionism and supply of unionism. In each case, quantity is a function of the “price” of union membership. --On the demand side, ”price” in this context involves costs for members: union dues, time spent in union activities, risks involved in organizing a union or going on strike, etc. We can imagine a downward sloped demand curve. --The position of the demand curve will depend upon net benefits and workers’ preferences (e.g., stigmas for professional workers associating with industrial unions; or political changes—e.g. CIO slogan in the 1930s: “The President (FDR) wants you to join a union.”) --On the supply side, “price” involves costs for the union— costs of servicing existing contracts, representing workers during negotiations when a contract is up for renewal, organizing new members to hold an election, trying to win an election and then first contract, etc. --The position of the supply curve will depend upon changes in the legal environment, on changes in the composition of the workforce or workplaces, changes in employer attitudes and behavior, and changes in union interests in organizing new members versus servicing existing members. Employers are presumed to be rational—to compare the benefits of unionism (stable and cooperative workforce with no disruptions during the contract), with the costs (price of labor, intrusiveness into management decisions, etc.) B Factors shifting the demand and supply curves 1 1. Structural factors--demographics, shifting industrial composition, shifting geography of employment. 2. Decreases in rents to be shared when competition increases. 3. Increased employer resistance and changes in government policies. 4. Declines in union expenditures on organizing with resources allocated instead to servicing incumbent members. 1. Structural factors --Demographics: such as the increased number of women, minorities and immigrants in the workforce. Surprisingly, this is not a significant explanation. See slides on lack of gender and ethnicity gaps in CA unionism. --Shifts from industry to services, which have smaller worksites and are often in very competitive industries. This is important. --Shifts in employment location to the “Right to Work” states—24 percent of national employment in 1955 versus 38 percent in 2000. This is also significant. 2. Increases in competition --Deregulation since the early 1980s, of airlines, trucking, telecommunications. --Increased international competition as import shares have risen in many other industries. --As text says, these can translate into reduced benefits for workers and greater employer resistance as well. 3. Changes in employer and government behavior --Employer resistance visibly increased in the mid-19070s and especially in the 1980s. See slides on employer interference and on unfair labor practice charges. Response to profit declines in that period. --Government under Reagan sanctioned “permanent replacement of strikers’ (air traffic controllers strike), which was then adopted in the private sector and shifted composition of the NLRB and reduced its budget. 4. Declines in union organizing 2 --Many unions became more concerned with servicing incumbent members than with maintaining density and spend only a few percent of their budgets on organizing. --Henry Farber (Princeton labor economist) argues that job satisfaction has been increasing, leading to a decline in individual workers’ demand for unions. This study, which is cited in the textbook, is controversial; job satisfaction is a very indirect and very unreliable measure of interest in unions. --Richard Freeman (Harvard) and Joel Rogers (Wisconsin) argue that there is a huge “representation gap.” See slide. 5. Summary estimates (based more on Freeman than on Farber): --Structural factors (industry and region) account for about 40 percent of decline in the U.S. (but do not have that effect in many other countries). --Increases in competition and in employer and government resistance accounts for another 40 percent. --Declines in organizing accounts for the remaining 20 percent. C. Revitalization of unions? --New AFL-CIO leadership led by Sweeney and Trumka and elected in 1997, has tried to revitalize organizing, to get all the affiliates to allocate 30 percent of their budgets to organizing. The argument is that servicing members only is not sustainable if density keeps declining. This campaign has succeeded in only a few unions—notably, HERE, SEIU. --These unions have been especially successful in generating real although small increases in membership and density in California. --Other strategies: Community organization/labor union coalitions at the local level for living wages and equitable economic development strategies. These have succeeded in about 100 cities. 3 Working America. “open-source unionism” (independent community affiliation for nonunion members and retirees) using Internet. Just instituted this year by the AFL-CIO. It is too soon to assess its success. 4 a r t i c l e | Posted June 6, 2002 from The Nation Magazine A Proposal to American Labor by RICHARD B. FREEMAN & JOEL ROGERS Approximately 100 million private-sector American workers-including 91 percent of the total--have no collective representation at work. Our mid-1990s survey of worker attitudes found that most workers want some organization--ranging from unions to workplace committees of various forms--speaking to their everyday concerns at work: wages and benefits, statutory rights, technology and training, safety, work/family scheduling conflicts, etc. Applying our results to today's work force, about 42 million workers want an organization with elected representatives and arbitration of disputes with management. Another 42 million or so want an organization more focused on information, career assistance or consultation with management, but still operating independent of management. Together these roughly 85 million workers--a group twelve times the size of present private union membership--are the market for open-source unionism. Capturing even a small share of this market could massively expand the American labor movement and vastly extend its reach. [See Richard Freeman and Joel Rogers, What Do Workers Want, Cornell University Press, 1999. ] 5 ...
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