U.S. Labor Movement Is Facing World Change

The 100th birthday of the American Federation of Labor (AFL-CIO) slipped by last December almost unnoticed - an indication of irrelevancy that explains much about unions in America today.

Abuse of unskilled workers was horrendous in the 1800s.  Long hours, subsistence wages, hazardous working conditions, exploitation of women and children were commonplace.

It was not that employers were heartless.  Those engaged in industries with near monopoly markets often provided exceptional benefits in model communities.  Owners of highly competitive companies, requiring only unskilled workers, paid as little wages as possible in order to survive.  Pay scales were set in the open labor market by waves of immigrants anxious for work.

Early labor unions regarded employers as a privileged social class which, out of greed, withheld money justly due the "working class."  The law of supply and demand in regulating prices of "things" was not yet understood to apply also to "services" such as labor.

The union movement grew slowly, painfully as a class struggle.  The Great Depression of the 1930s finally convinced private-enterprise Americans that there was a need for some kind of public participation in labor affairs.

Union membership skyrocketed. Aggressive organizing, militant strikes and newly cooperative politicians won concessions from employers.  The concessions were possible because of two contributing factors.

First, industry wide bargaining imposed wage costs that were identical to all firms in the same competitive niche.  Thus, one company could not gain an advantage by cutting wages.

Stated another way, wage costs were an equal burden on all employers.  Increased labor costs could be passed along to customers without concern.  This was the start of spiraling inflation which gradually priced big, unionized companies out of business.

Second, the United States had, in itself, a mammoth market able to support higher prices for many years.  Indeed, this market still today is the engine that drives the world economy.

Unfortunately the U.S. market now is fragmented among a host of trading partners we can no longer ignore.  Free trade is an official U.S. policy which has built an unprecedented prosperity worldwide.

However, this policy is in jeopardy because not all national work forces are unionized.  All national governments do not legislate minimum wages and working conditions.  American firms compete with one arm tied behind their backs.

World competition has brought U.S. unions back to square one.

Membership Peak

Union membership peaked in 1945 at 35 percent of the non-farm work force.  Today, union membership has dropped to less than 18 percent and compares with that of the years just before the Great Depression.

Membership in the United Steel Workers, United Mine Workers and United Auto Workers has fallen off by approximately half in the last 10 years.  Their industries have shrunk because of more efficient workers overseas.

Interestingly, union membership among government employees has increased, while the blue collar representation took a nose dive.

This poses some special problems for both the U.S. economy and, paradoxically, for government employees.

Government administrators are easy marks for union organizers.  Bureaucrats enjoy monopoly powers which permit passing along all costs to taxpayers.  In addition, public officials facing elections are mortally afraid to "oppose" collective bargaining.

Public employees facing pressures from organizers on the one hand, and observing silence from supervisors on the other hand - are easily persuaded to join unions.  It is no coincidence that public employees now make more than private sector workers of comparable skill.

Nevertheless, by joining a union, employees give up their independence, opportunities for flexible work rules, merit pay raises and promotions for above-average ability.  Also, they pay union dues which often support politicians and causes they do not approve.

Damaging System

Unionized public employees constitute a potentially damaging system in which inspectors might penalize nonunion owners, firemen drag their feet in battling a "sweatshop" blaze, trash collectors bypassing non-union businesses.

Recent congressional hearings on the federal Hobbs Act prohibiting labor extortion disclosed that unionized police in Lancaster, Pa.,  Port Huron, Mich., and Maui, Hawaii, failed to enforce laws against violent strikers.  Because of this "brotherhood,'' management personnel were injured and property destroyed.

To avoid these conflicts of interest, more and more government administrators are switching to private firms to provide vital services such as mass transportation, trash removal, building maintenance, tree trimming and janitorial work.

Unions are important in dealing with powerful producers, but are inefficient in coping with competition beyond control of a friendly government.  Much progress in working conditions has occurred in the past century, but much remains to do in adjusting to the future.

The world is changing rapidly.  Unions must keep pace else the rest of us might go down the tube with them.

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