Cracker Barrel on Regulating Responsibility

Business and the Environment

Unions by any other name.

Overall, union membership is trending downward globally though the growth of unions is tied to the business cycle and changes within the labor movement as a whole.  If we were to truly concentrate on labor market outcomes then we might be better able to reject labor unions or adjust their strategies to achieve real benefits for members while “offering employers services that employers value” (Wallerstein and Western 2000, 354).  Because of the heterogeneous nature of labor unions we are unable to reliably reject the hypothesis that unions are good or bad in an absolute sense.  The link between quantity of union members and benefits bestowed to members still needs to be explored.

Farber and Western (2001) survey unions in the private sector during the years 1973-1998 and assert some of the same arguments for union decline as Clawson and Clawson (1999): union and non-union sector growth rates and changes in the NLRB (National Labor Review Board) -supervised election rate impact growth in membership and density.  Farber and Western conclude that the fate of unions is actually outside their control owing to market and regulatory changes.  The market forces that diminished the role of unions did so because “unions could no longer guarantee their workers higher wages while maintaining reasonable levels of job security” (459).  Farber and Western attempt to answer a specific policy question: does increasing organizing activity increase union membership?  And, if so, is it then a good mechanism to revitalize unions?  Farber and Western come up with two scenarios that would make it likely that unions would resurge: the U.S. would have to withdraw from the global economy, if only partially, or the NLRA would have to be modified – which has proven politically infeasible.  Farber and Western self-consciously admit that the two scenarios they offer are highly unlikely to occur.

One key finding of Farber and Western is that union memberships have always grown in spurts, but remain unsure about how to trigger them.   The article focuses on how to increase the quantity of individuals organized into a union but does not discuss any of the gains these organizations can be expected to achieve.  To be sure, having more members makes strikes more effective but other mechanisms within U.S. labor law cited by Clawson and Clawson make it unlikely that strikes will lead to net gains for strikers.  As Farber and Western point out: “Many workers are skeptical that unions can provide real value in the workplace without sacrificing job security; employers actively resist union organizing efforts; and the NLRA, as currently administered, makes the organization process drawn out, expensive, and uncertain” (478).

This circles back to a question that is not directly addressed by the articles we read: How valuable are unions to members?  Are unions useful for employers?  Maybe there is a tipping point where marginal returns become greater for both parties – once the NLRA hurdle is passed, organizing may become easier and more effective way to see gains in the workplace for workers.  Farber and Western conclude that for union growth to increase then “owners of capital [should be] indifferent between investing in the union and nonunion sectors” (482).  This seems unlikely because of the confrontational nature of many union movements and other factors mentioned earlier.

Wallterstein and Western (2000) begin to approach the “why” question of what benefits unions can uniquely provide.  Wallerstein and Western look specifically at centralized wage setting as a key task of labor unions and not that “incentive pay schemes and profit-sharing arrangements subvert negotiated wage scales” (356).  Wallerstein and Western find that an important effect of centralization of wages is the effect on equality of wages.  As wage setting becomes more decentralized – set by employers and not by industries – inequality increases.  Wallerstein and Western survey the literature in the debate over what really matters in wage setting – is it partisan governments, is it the independence of the central back? – and are inconclusive.

A key claim of Wallerstein and Western is that “the benefits of unionization depend on the proportion of the work force organized, but the cost of organization to the union depends on the absolute number of new union members recruited.  As a result, the optimal level of unionization for the union falls as the size of the labor force increases” (360).  As discussed, unions also experience greater strength in environments where wage bargaining is centralized.  In an environment where employers have more control over wages, it is more likely that they will resist unions and block the kinds of gains unions are meant to provide.

Clawson and Clawson are more alarmed by the “larger loss of efficacy” (97) among remaining union members than by the declining rate of union membership.  Unions are becoming less involved in, and perhaps less good at, tasks where they have historically been useful.  For instance, increased use of grievance systems and new work rules that facilitate and solicit worker involvement individually (see, for example, Lean Manufacturing and other participatory management systems) threaten key tasks of unions, create competition for their services and make unions less of a vehicle for worker involvement.  Unions can, and in the absence of other mechanisms should, serve a social purpose for rank-and-file workers and “create a new culture among workers, developing their abilities and transforming their political understanding” (107).  Capacity building is a crucial issue for workers in global supply chains and unions serve a cultural and educational role that is promoted by numerous Western donors as a theory of change for sweatshop working conditions.

Clawson and Clawson provide a more nuanced argument about union growth and strength.   It is in finding ways to turn these challenges into new opportunities for organizing that unions can regain strength.  Clawson and Clawson cite Banks and Metzgar’s (1998) argument that “employee involvement should be treated as a form of ‘union organizing on a new terrain,’ and used as an opportunity ‘to enhance worker and union power’” (105).  Clawson and Clawson offer an interesting discussion of breaking the idea of “union” and thinking strategically about the outcomes that workers and employers truly value and using these alternative strategies to make gains.  This is an approach that can be tailored to specific situations and enhanced over time to provide workers and employers with outcomes that they value, regardless of the gains in union membership.

Note: This blog post is based on a literature review of three pieces on labor union decline.  I am happy to provide additional source information upon request.

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