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Labor Pains

Union strength has reached a low point in the Ninth District, with few bright spots. What brought unions to their knees? And will they rise again?

May 1, 2001


Douglas Clement Senior Writer

John Pejko, a 60-year-old union pipe-fitter in Great Falls, has managed to find a silver lining in the soaring electricity prices that cloud Montana's economic horizon. "If they decide to build a lot of power plants and stuff," he said, "they're going to come to guys like us to do those."

Montana could use a few good union jobs, Pejko observed, as he ticked off a list of those lost over the last couple of decades: a smelter in Great Falls that closed in the 1980s, taking 3,000 jobs with it; a smelter in East Helena that will soon close, taking with it about 240 jobs. Butte's copper mines and sulfur plant, the aluminum plant in Columbia Falls, lumber mills throughout the state—all union; all gone or going.

When he got out of high school, "everything was union. We had industry, everybody was working, everybody was union," Pejko recalled. "We just don't control the work like we used to." These days, he said, Montana is becoming a tourist site, a home for retirees, a service economy. "It's an easy place to live, and a pretty place to live," he acknowledged, "but I keep telling them, you can't eat the land." Like it or not—and most have strong views one way or the other—union members like Pejko have a hand in virtually every part of your life. They teach your kids, fix your plumbing, star in your favorite TV dramas and drive the city bus. They'll pilot the 747 you take on your next business trip and probably change the sheets on your hotel bed. If you stay in a Minneapolis hospital or a Wisconsin prison, they'll be watching over you. Chances are good that they made the paper you're holding in your hands right now.

But despite their seeming ubiquity, union workers are a dying breed, an endangered species. For smeltermen in East Helena, shoemakers in LaCrosse, Wis., and taconite workers on Minnesota's Iron Range, union jobs are disappearing, and union membership rates have plunged. In 2000, fewer than 14 percent of American workers belonged to a union, according to the Bureau of Labor Statistics, the lowest membership rate in 65 years, and a dramatic decline since the 1950s, when a third of the nation's workforce paid union dues. In the private sector, union "density," as it's called, was even lower: 9 percent. And falling.

While union membership rates are higher than the national average in traditional strongholds like Michigan (20.8 percent), Minnesota (18.2) and Wisconsin (17.6), and roughly the same in Montana (13.9), they're much lower in North and South Dakota (6.5 and 5.5, respectively). And local union activists can take little comfort in recent Ninth District trends: Compared to the 9 percent national decline over the last five years, union density has fallen faster in all Ninth District states but Wisconsin.

Indeed, it's hard to have a conversation about unions with anyone (other than a labor organizer) and not be filled with a sense that unions, particularly in the private sector, are facing an imminent death—that while they may rage against the dying of the light, their fate has been sealed by ineluctable forces of economic change and social transformation. "I tend to be very pessimistic about the future of the American labor movement," said Gary Chaison, a professor of industrial relations at Clark University in Worcester, Mass. "I can't see how an adequate number of workers can be organized each year to offset attrition. ... I see continued decline and loss of influence."

Union leaders aren't blind to these trends, of course, but they're not accepting defeat. Taking comfort in each new organizing victory and finding inspiration in past struggles, labor activists continue to fight what they see as a battle for workers' rights and economic justice. "To me the amazing thing is not that we've seen some decline in the absolute numbers," said Bernard Brommer, president of the Minnesota AFL-CIO, "but that we're able to maintain the levels that we are."

Union members, labor scholars and business people suggest a variety of explanations for falling union membership rates, from the decline of heavily unionized industries to the ascendance of individualism in American society. But a close look at the situation reveals that a few of these factors probably play a fairly small role in the decline of union density, and that others—some internal to unions themselves—may hold the key to the future decline, or potential renaissance, of the American labor movement.

In fact, for labor to rise again, unions may have to move past their proud historical traditions, acknowledge the transformations that have occurred in the global economy and go through a painful process of rebirth that will leave future labor unions looking very little like they have in the past.

The usual suspect: Not always guilty

What accounts for the dramatic transformation of American labor? The most obvious explanation—the one alluded to by unionists like Pejko—is the decline of industries that historically have had high levels of union density, especially manufacturing. At a local level, it seems a clear and powerful factor: If a paper mill shuts down in upstate Wisconsin, the town's union membership will plummet overnight. A careful analysis, however, reveals that such structural changes account for less of the fall in union density than seems apparent.

"The decline in manufacturing is not very important," said Richard Freeman, professor of economics at Harvard University and director of the Labor Studies Program at the National Bureau of Economic Research. Freeman points out that union density has dropped within the manufacturing sector itself, so that even if manufacturing were not a declining sector of the economy, overall union density would still have fallen. From 1973 to 2000, union density in manufacturing plunged by nearly two-thirds, from 38.9 percent to 14.8 percent, at about the same rate as density declined in the private sector as a whole. In most Ninth District states, union density has fallen even faster within manufacturing than in the rest of the private sector.

Scholars also point to Canada's experience to indicate that structural explanations have limited power: While both the United States and Canada have experienced similar changes in economic structure—a decline in the relative importance of manufacturing, increased entry of women into the workforce, more white-collar employment, for example—union density has actually increased in Canada. The most rigorous statistical analysis confirms that the impact of structural change has been modest, accounting for up to a third of union density decline from 1977 to 1984, but less than 10 percent of the decline between 1984 and 1991. Recent studies indicate similarly modest levels of structural influence in the 1990s. Structural explanations, said Chaison, are "often cited, but exaggerated."

Chart-U.S. Union Membership Rates

Free markets

So, what else is going on? What, for instance, would cause union density to fall over 11 percent in Minnesota private construction between 1985 and 1999? Ask the Minnesota Construction Trades Organizing Association (MCTOA), which staged a mid-March rally of 400 union members at Minnesota's state Capitol to demand the repeal of a property tax exemption given to builders of a 540-megawatt power plant in southern Minnesota.

The MCTOA claims the plant is hiring out-of-state workers to build the plant and undercutting prevailing union wage rates. The builders offer just $9 an hour for all workers, MCTOA Chairman Joe Rohrer told the Union Advocate, a local union newspaper, instead of the $13 hourly wage commonly paid in that part of the state for day laborers, and over $30 an hour for electricians and pipefitters. "That's 200 Minnesota jobs lost," said Rohrer. "How many more will we lose in the future if we allow this to set a pattern?" While the builders say the tax exemption was not contingent on using Minnesota union labor, the MCTOA wants the jobs for its workers and will use its clout to try to get them.

Management inevitably focuses on the bottom line and, in most industries, profitability has been squeezed as deregulation eliminates protection from outside competitors, and globalization opens U.S. markets to low-cost producers from around the world. In such an environment, finding cheaper labor is an undeniable attraction. The Minnesota power plant example—with lower-wage workers moving into the state—is somewhat anomalous: In a global economy, the work usually moves to the low-wage labor, rather than vice-versa.

Such competitive forces close mines, lumber mills and factories in the Upper Midwest and send work either to largely nonunion states in the South or overseas, where unions may not exist and prevailing wages are far lower. "We've lost hundreds of jobs at La Crosse Footwear because they've contracted the work out to China," said Terry Hicks, president of the AFL-CIO Central Labor Council in La Crosse. "We're frightened that the whole entire factory, after a hundred years, is going to be closed." Fifteen years ago, the footwear maker provided a thousand union jobs, said Hicks. "Now they're down to 134."

International pressures in the steel industry have forced the least efficient producers into bankruptcy and others to cut back production. In Hoyt Lakes, Minn., 1,400 workers, most of them members of the U.S. Steelworkers of America, lost their jobs when LTV Steel Corp. closed its iron mine and taconite pellet plant in January. Shutdowns announced by the Empire Mine in Marquette, Mich., will affect 800 union members later this year. More union jobs will be lost if Stimpson Lumber closes down its northwestern Montana mills due to the nonrenewal of the Canadian softwoods lumber agreement and the entry of low-priced Canadian wood into the U.S. market, as some predict.

Even when mines, mills and factories don't close permanently, global competitive pressures curb union demands for higher wages and benefits-the threat of job loss is more powerful than the desire for a raise. In early March, union workers at two Badger Paper Mills plants in Wisconsin agreed to wage, benefit and scheduling concessions to prevent mill closures and preserve their jobs.

It's clear that globalization and deregulation place enormous pressure on labor unions by eliminating trade barriers and labor restrictions that impede the flow of products and workers across borders and among sectors of the economy. Unions have fought back, forming international coalitions and raising issues of international workers' rights at World Trade Organization protests and in campaigns to improve conditions in Mexican maquiladoras and Asian "sweatshops." While these efforts have had some impact on industry—the Wall Street Journal reports that some industrialists are so anxious to complete international trade pacts that they're willing to incorporate labor standards into international agreements—the overall trends have surpassed labor's ability to countervail.

"Unions are having tremendous difficulty dealing with the impact of globalization," noted Clark University's Chaison. "And whenever they insist that sanctions be applied to countries with low labor standards, this comes off looking like protectionism to protect members' jobs, rather than as part of a human rights program to help exploited workers overseas."

Chaison and other economists point out that a prime attraction of unions to workers is their ability to offer high wages and job protection. "The full exercise of such power requires that unionized employers not face substantial nonunion competition," he noted, but "unions can't increase wages and benefits, and also protect jobs, when exposed to global competition."

Chart-U.S. Private Sector Union Membership Rates

Management opposition

Increased pressure on profitability has, in turn, intensified management opposition to unions. That opposition, argues Harvard's Freeman, is the "biggest factor" behind falling rates of union density. Because their demands for increased wages and benefits are likely to have a negative impact on profitability, explains Freeman, management has a clear incentive to oppose unions. And in the United States, unlike a number of other industrialized countries, labor laws allow management to directly oppose union organizing drives. Given both motive and opportunity, private sector management has fought unionization vigorously.

Judy Anderson, a pediatric nurse in Bismarck, N.D., says she's felt the brunt of management opposition. Last October, she and her union filed a complaint with the National Labor Relations Board (NLRB) against her employer, Medcenter One, alleging that despite 20 years of excellent job performance, Medcenter fired her in September "in order to discourage her and other employees' membership in and support of" the union.

Anderson had taken a lead role in organizing a union drive for nurses at Bismarck's Medcenter One and said the hospital fired her to crush the union. The hospital said she was terminated for performance reasons. With the NLRB's intercession, the parties settled their dispute in December: Anderson was offered her job back (she declined) with back pay (she accepted), and Medcenter, though admitting no violation of NLRB laws, agreed to post a notice to employees stating that the hospital would not interfere with unionizing efforts.

The Medcenter dispute became a cause célèbre in Bismarck, with public rallies, petition drives and a full-page ad in the local newspaper from the hospital's CEO. But unionizing efforts were squelched, at least for a while. "I think it's going to be a little slower now," said Shelley Seeberg, AFL-CIO state director for North Dakota and South Dakota, "just because of the scare tactic that they used. People are a little more cautious."

While it's illegal to fire employees for organizing a union drive—and Medcenter denies having done so—union leaders and academics say that dismissals and other measures which are legal (for example, warning employees that unionization might necessitate cutbacks, holding mandatory employee meetings to speak against unions) are an increasingly common and effective strategy used by management to discourage unions.

NLRB data show that in the 1950s, several hundred workers each year would file complaints saying they were fired because of their support for union organizing efforts, according to a Southern Methodist University study. By the late 1960s, reprisal complaints had climbed to over 6,000 a year, and during the 1990s, more than 20,000 workers filed complaints every year. "Many employers have come to view remedies like back pay for workers fired because of union activity as a routine cost of doing business," said Lance Compa, a Cornell University labor relations professor.

Another Cornell researcher, Kate Bronfenbrenner, said that during labor negotiations in the manufacturing sector, "70 percent of employers threaten to move overseas, yet fewer than 10 percent actually do." Unions win only 33 percent of election campaigns where such tactics are used, according to Bronfenbrenner, compared to a 51 percent win rate for all elections. So the warnings seem to work, she said, and even if workers do vote union, the employer will use the threat to keep the bargaining demands low. "It's perfectly legal to put up on the wall a photograph of a plant that closed in the aftermath of a union drive," notes Bronfenbrenner. "Perfectly legal, but it's clearly a threat."

Rules of the game

John Remington, director of the University of Minnesota's Labor Education Service, said the importance of employer opposition is illustrated by the difference in Canadian and U.S. union density. Canadian labor laws vary by province but tend not to permit employer opposition during union campaigns. "The employer can't take a position, and that's a real difference," said Remington, "[which] may explain why in the 1950s, Canada and the United States had unionization percentages about 33 percent, and today Canada is 47 percent and we're at 13.5."

Chart-Total Union Membership Rates 1964-2000

Other scholars argue that the quantitative impact of anti-labor management practices is difficult to assess, in part because the strength of management opposition is so closely intertwined with other factors, particularly global competitive pressures. Union density would undoubtedly be higher if management opposition were less intense, they say, but the fundamental point is that management will continue to oppose union organizing as long as it is economically sensible to do so.

Changes in U.S. labor law could alter the expression of management opposition, but all observers agree that such changes are unlikely at the national level, with Republicans in control of both ends of Pennsylvania Avenue. The last serious attempt to reform labor laws was the ill-fated Dunlop Commission. But the 1994 Dunlop proposals were ill-timed politically, emerging just as elections ushered in a conservative Republican House. "It was more than dead on arrival, it was like King Tut on arrival," commented Joel Rogers, a law professor at the University of Wisconsin-Madison.

Even at the state level, pro-labor legislators in the Ninth District often fight an uphill battle. North Dakota state Sen. Lonny Winrich brought three pro-labor bills before this year's Legislature and none of them passed.

One of Winrich's proposals would have altered management economics by forbidding the use of public funds to hire labor lawyers to advise management on anti-union campaigns. The measure, based on a California law, was a response to efforts by Medcenter One, which retained a Chicago labor law firm to help them deal with the nurses' unionization attempt. Arguing against the bill, Sen. Duane Mutch said it would require onerous bookkeeping for business and have a regressive impact on the state's economy. The bill was defeated 32-15, on a straight party-line vote.

Rise of the individual

Another reasonable explanation for the decline of unions is the sense that American culture has grown more individualistic. We no longer seek collective solutions like those afforded by unions, goes the argument; instead, we depend on self-help and individual responsibility. Sociologist Seymour Martin Lipset of George Mason University is a key proponent of this view, arguing that unions that were integral to American culture in the early and mid-1900s are no longer as essential in the atomized, self-oriented society of the 21st century.

Some economists give credence to this viewpoint, though conceding the difficulty of quantifying a cultural mindset. Others remain skeptical. "I think the 'rampant individualism' [argument] is vastly exaggerated," said Freeman, who points out that some segments of the American workforce that we perceive as highly individualistic are staunch union supporters. Graduate students and doctors, for example, are growth areas for union organizing. "And think of the most individualized people in the world: movie stars," Freeman said. "They're 100 percent unionized and they will die for their union."

Voting union

Leaving aside arguments of structural change, labor law inadequacies, management opposition, global competitive pressures and individualism, some of the decline in the percentage of American workers belonging to unions is undoubtedly due to factors within the labor movement itself. American unions have long struggled over whether to devote resources to servicing current members or organizing new ones. U.S. unions also suffer from poor public image and a lack of a forward-looking growth strategy. In essence, unions have done little to build demand for their product.

"Union, to a lot of people, is a four-letter word," noted John Forkan, business manager of Plumbers and Pipefitters, Local 41, in Butte, Mont. The image of organized labor as corrupt, old-fashioned and self-interested is a powerful stigma, fueled by scandals from the past and not-so-distant past.

"We have to fight a very bad image," observed Bruce Glover, the Minneapolis-based general chair of the northwestern U.S. branch of the Brotherhood of Maintenance of Way Employees, whose members build and maintain bridges, tracks and buildings for the rail system. The media portray union members as "gangsters with thick necks and big gold chains," said Glover, and suggest that unions are "corrupt organizations that take your money ... and keep unproductive, bad workers at the workplace."

The image is largely undeserved, according to Glover and other labor advocates. "We're not perfect, obviously," said the AFL-CIO's Brommer. "We've got our scars and warts and blemishes, but by and large, I think the labor movement has made a significant contribution to this nation. I'm proud of that."

Current opinion polls indicate that while labor's public image is below approval levels found in the late 1970s (as is true for most institutions in the United States), its reputation has improved in recent years. In 1977, 39 percent of those surveyed by Gallup said they had "quite a lot" or "a great deal" of confidence in organized labor. The ratings declined to 22 percent by 1991, but increased to 25 percent in Gallup's June 2000 poll. Other surveys have found that negative feelings toward unions have declined, as well.

Polls indicate that American workers may also be more likely to join unions than previously. Surveys by Peter D. Hart Research Associates ask respondents whether, given the opportunity, they'd vote for a union at their workplace. Forty-two percent of potential union members in Hart's January 2001 survey said they would, up from 30 percent in 1984.

"Obviously, saying you'd vote 'yes' on a survey may or may not mean you'd actually vote 'yes' under the conditions of a real organized drive," observed Guy Molyneux, senior vice president at Hart Research, but he considers the trend significant. He also noted that younger respondents were much more likely than older to say they'd vote union.

The level of "yes" vote sentiment is surprisingly close both to the percentage of the public-sector workforce currently belonging to unions (37.5 percent), and with the numbers reported by Freeman and Rogers in a recent book, What Workers Want, which reports on a survey conducted as follow-up to the Dunlop Commission. Freeman and Rogers found that 32 percent of all workers surveyed said they would like a union form of employee representation, a proportion that rose to 44 percent if, hypothetically, management did not oppose unionization. Of union members surveyed, 90 percent said they would vote in a new election to keep the union.

Don't mourn, organize

Whatever it is that workers want, American unions have yet to capitalize on what appears to be a significant market opportunity: the gap between the 30 percent or 40 percent of workers who say they want unions and the 13.5 percent who actually belong. By devoting little money and time to organizing new members, they've neither modernized the message of what unions can offer today's workers nor developed efficient recruiting methods. "The major failure of the American labor movement in the 1970s and 1980s was that they stopped organizing," noted Cornell's Bronfenbrenner. Faced with serious management opposition in the 1980s, "they stood like deer caught in the headlights for almost a decade."

Organizing drives are run largely by local union chapters, whose members may rationally decide that devoting resources to gaining new members is less important than servicing current members. John Sweeney, president of the AFL-CIO since 1995, has sought to counteract the "service" orientation, exhorting unions to achieve an annual target of 1 million new members. But organizing is labor-intensive and expensive: At an estimated cost of $1,000 per new member, achieving Sweeney's goal would cost up to $1 billion. Efforts over the past year fell far short, with the federation's affiliated unions reporting (optimistically, by most accounts) that they'd signed up perhaps 350,000.

Observers note that unions devoted major resources in 2000 to political campaigning rather than organizing, working in particular to elect Al Gore, an effort for which they now feel they're paying a price as the Bush White House takes steps viewed unfavorably by labor. And indeed, data indicate that organized labor did turn out union voters, helping Gore win a majority of the popular vote—an indication that unions are not as impotent a force as some might believe.

Local heroes

In the Ninth District, some unions have bucked the trend, devoting major resources to organizing new members, and tapping into potential "markets" that have heretofore largely been ignored by organized labor. "They look at these numbers just like you and I and they know that they have some real challenges," observed Duane Benson, executive director of the Minnesota Business Partnership. "Like employers when they have a worker shortage, they're moving into markets that they historically weren't in."

For the United Steelworkers, who've lost thousands of members to the closing of mills and mines, that has meant organizing nurses and other health care workers, about 2,500 in Minnesota over the last few years, including a major victory at Duluth Clinic in 1998. Other unions are hoping to organize high-tech workers, graduate students, physicians and immigrants.

"The unions have done a very good job of starting to go to a lot of people that they haven't gone to before, immigrant workers being one big part of that," said Larry Weiss, who recently launched an immigrant workers' rights center at the Resource Center of the Americas in Minneapolis. Five service and construction union locals have enrolled immigrant union members "in whom they see leadership potential, but who are hampered by their lack of English," said Weiss. The center offers English lessons taught in the context of workplace rights.

Weiss points to the growth of labor-church-community networks in the Twin Cities and elsewhere in the country as an organizing model that has begun to counteract labor's poor public image. In 1999, the Twin Cities network provided major support during the Hotel Employees and Restaurant Employees (HERE) unionizing drive at Minneapolis' Holiday Inn Express, during which immigrant workers were fired and then reported to the Immigration and Naturalization Service.

These networks and immigrant worker councils are models that labor historian and activist Peter Rachleff at Macalester College in St. Paul believes may help unions grow in the future. "They have a real possibility of being a building block, if not the building block, of a new labor movement," said Rachleff. But, he added, new kinds of unions have often "experienced a good deal of resistance from the remnants of the old labor movement."

More traditional arenas for organizing include the public sector, which is the Ninth District's biggest membership growth area, though density is largely stable. In Wisconsin, the American Federation of State, County and Municipal Employees (AFSCME) is actively organizing correctional officers in state prisons. In March, they launched a campaign to unionize administrative support workers in state agencies. And card dealers and waiters will be likely organizing targets if state policymakers agree to casinos in Kenosha and Hudson.

The only other major sector in a Ninth District state where union density has grown in the past 15 years is private construction in Wisconsin, where union membership rose 82 percent from 1985 to 1999, faster than employment growth. "In union construction, we've taken a huge part of our budgets and put it toward organizing," said Eric Anderson, business agent for the United Union of Roofers, Waterproofers and Allied Workers in Eau Claire, Wis. "We want to maintain our density."

Anderson says that management opposition is less a factor in construction union organizing where management has less daily contact with workers than in a factory setting. Moreover, "unions have gotten smarter," he said. "We're not asking for the whole pie, just for our fair share. ... We have to be sensitive to [the contractor]. We're the new union."

Unions elsewhere in the Ninth District emphasize the importance of offering training programs, both as a means of attracting members and to persuade management that hiring union workers will increase productivity. "We're starting to make more of an outreach into trade schools, and adopting changes to apprenticeship standards and training curriculum to recruit," said Forkan in Butte. "You've got to have some creative ways to stay in existence."

Labor gains?

Whether unions will collapse or revive depends on a number of forces beyond their control, and several that only they can affect. Some labor economists predict that unions will rise again only if the country faces a war or a massive economic downturn. But come what may, union members will doubtless continue the struggle.

John Pejko, the Great Falls pipefitter, says they're doing what they can. "Our numbers have grown a little bit," he observed. "We were going backwards until about five years ago, and then we had an all-out organizing campaign. And just like our general president said, we're no more than a whore, we're just trying to sell ourselves, you know. So that's what we've got to do, is make ourselves look as good as we can and do the best job we know how. ... And it's the truth. You've got to sell yourself to make your organization go on."

Douglas Clement
Senior Writer

Douglas Clement was a managing editor at the Minneapolis Fed, where he wrote about research conducted by economists and other scholars associated with the Minneapolis Fed and interviewed prominent economists.