Paul F. Clark
Pennsylvania State University
John T. Delaney
Michigan State University
Ann C. Frost
University of Western Ontario
Collective bargaining in U.S. private-sector industries is under siege. The unrelenting intrusion of global markets into corporate boardrooms and the general antipathy toward unions by managers have contributed to a substantial decline in union density since the 1950s. The inability of unions to organize new private-sector members, the rigid postwar legal framework regulating private-sector collective bargaining, and the passage of free trade agreements now threaten to make collective bargaining an anachronism. More importantly, because it has not been able to adjust to the new realities facing private-sector business, observers are beginning to ask whether the American system of collective bargaining is suited to satisfying the needs of workers and employers today.
This volume examines collective bargaining patterns in eight major industries in an effort to determine how the parties have responded to this challenging environment. While we make no claim that the sectors studied or experiences cited reflect perfectly the situation, we believe that the contributors offer an accurate view of the problems facing private-sector collective bargaining in the United States.
Over the past quarter century, the Industrial Relations Research Association (IRRA) has published three volumes of case studies examining collective bargaining in North American industries. Gerald Somers published the first volume in 1980 and Paula Voos the second in 1994. With private-sector union density having fallen to 9 percent in 2002, the contributors to this volume chronicle a very different set of experiences from the contributors to the previous volumes.
Jack Barbash’s assessment of the state of collective bargaining in the book by Somers, for example, emphasized the importance of power in collective bargaining (1980:587–88). At issue was how power should be exercised and how closely it should be regulated by government. This was an important consideration in the late 1970s because unions had consolidated considerable bargaining power in numerous industries during the first three-quarters of the century. This power presented a significant challenge to management and to government and allowed unions to play a strong role in determining societal outcomes.
By the early 1990s, power was still an important issue in bargaining, but observers no longer characterized labor and management as equals. Contributors to the volume by Voos, instead, expressed concern about management’s increasing dominance of labor relations. It was feared that firms were using their power to impose their will on unions and workers. For this reason, the role played by U.S. labor law was seen as a decisive factor. As Voos noted: “If we want to foster cooperative joint efforts—and our public policy interest in promoting high-wage, high-productivity outcomes suggests that we should—it will be necessary to change both the economic terrain and the laws that govern organizing and collective bargaining” (1994:19).
In recent years, the balance of power has continued to shift toward management’s favor. With no change in U.S. labor relations law and policy in sight, the outlook for unions is generally worse than it was a decade ago. While the decline of North American unions is not the focus of this volume, that stark reality is the context within which the chapters that follow are set.
In some of the industries examined in this volume, circumstances have changed so greatly in recent years that the very future of collective bargaining is in question. Most notably, the trucking and newspaper industries may be nearing the end of the bargaining road. The dramatic decline of bargaining in trucking is illustrated by the assessments of the authors of the 1980, 1994, and 2002 IRRA volume chapters on that industry. Writing in 1980, Barbash summed up the state of collective bargaining in the trucking industry as one of “weak employers confronting a powerful union” (1980:562). In his chapter on the same industry for the 1994 IRRA volume, Mike Belzer suggested that the situation was almost desperate for the Teamsters union. And in his chapter for this volume, Belzer reports that things have gotten worse. A confluence of forces threatens to eliminate the unionized portion of the trucking industry. According to Belzer, only a temporary delay of the implementation of the North American Free Trade Agreement (NAFTA) trucking provisions has given breathing room to unionized truckers. The delay may end soon. Ironically, if Belzer is correct, that will mean that Jim Hoffa will oversee the decline of the union built and made famous by his father. While emerging trends are less dire in some industries, unions in most sectors face a difficult future in the collective bargaining arena.
American unions face several critical challenges at the start of the twenty-first century. Perhaps the most significant challenge is bargaining in an environment of steadily decreasing union density. Over the past decade, the percentage of private-sector employees represented by a union has declined from about 13 percent to 9 percent. Similarly, representation rates in manufacturing industries declined from 21 percent in 1992 to less than 16 percent in 2001. As union density declines, so does union bargaining power. And as union bargaining power diminishes, so do the outcomes of bargaining for union members. For example, the union/nonunion wage differential has been affected by changes in union representation rates. Historically, union workers have earned about 15 percent more than nonunion workers in the same industry. In a 1997 National Compensation Study survey, the Bureau of Labor Statistics reported that the overall union/nonunion wage differential was 4.3 percent. Notably, the same survey indicated that the union/nonunion wage differential for blue collar workers was almost 38 percent. The results suggest that unions have been able to secure substantially higher compensation for employees with lower skill levels but not for higher skilled or service sector employees. This pattern, in turn, likely encourages employers to fight unionization efforts among lower-paid workers and discourages employees in high skill jobs and growing segments of the economy from joining unions. This one–two punch, in turn, reinforces the decline in union density.
Even in the auto industry, as Harry Katz, John Paul MacDuffie, and Frits Pil explain, declining unionization among parts suppliers has contributed to a reduction in wages in that segment of the industry. More telling is the fact that the United Auto Workers (UAW) has had very little success in organizing employees in firms outside of the Big Three (General Motors, Ford, and DaimlerChrysler). As the market share of those other firms grows and auto companies seek to expand modular production (which would shift some work from the automobile manufacturers to parts makers), the bargaining power of the UAW is diminished.
The chapters that follow suggest several trends and developments in collective bargaining. Some are continuations of long-standing patterns (e.g., auto assembly). Others appear to be new developments and are difficult to interpret (e.g., telecommunications). Some trends are ominous, such as the situation in trucking, though they may be a necessary precursor to the reinvention of the labor movement. Clearly, there are few instances in the private sector where collective bargaining proceeds today as it has for the past few decades. Following, we discuss some of the issues to consider when assessing the chapters.
Collective bargaining patterns and results vary considerably across the industries included in this volume. This, of course, is not a new finding. Workers in the auto industry, for example, continue to benefit from strong bargaining gains, while truckers and newspaper workers have generally seen their outcomes erode. There is also evidence of variation within industries. For example, airline pilots have negotiated generous outcome packages at a time when flight attendants and customer service employees have made less progress. Unionized drivers working for United Parcel Service (UPS) have negotiated solid bargaining gains, while other unionized truck drivers have been much less fortunate. Similarly, the wage structure in some professional sports (e.g., basketball) has been altered to reduce the initial salary for rookies. In general, these variations are a function of bargaining power. Differentials in bargaining power exist among certain occupations because of employee skill levels, the presence of solidarity, or some other unique attribute. A second phenomenon seen in many of the industries discussed in the volume is the inability of unions, with some exceptions, to prevail in traditional job actions against employers. This factor is a manifestation of bargaining power and has likely reduced employers’ fear of strikes. Moreover, the reduction of strike activity has created an environment in which the general public and perhaps some union members have little conception of what a strike is or does. As Howard Stanger’s description of the situation in the newspaper industry attests, without a credible strike threat, unions have difficulty winning significant improvements in compensation, benefits, and working conditions. In such cases, the benefits of joining a union are not obvious. Where union–management cooperation has been beneficial to firms, as in the telecommunications industry, unions have secured better outcomes than competitive marketplaces would otherwise allow. But it seems clear that many employers prefer a nonunion environment to one in which there is union–management cooperation.
A third finding that can be drawn from the chapters that follow is that collective bargaining generally plays a far less significant role in society today than in the past. Collective bargaining outcomes and events are in the news less often today than perhaps at any other time since the 1940s. For unions, “out of sight, out of mind” could come to be “out of mind, out of existence.” Unfortunately, another part of this trend is that the occasional news story about union corruption, violence, or ineffectiveness is not offset by positive stories about the benefits of unions or the gains to society that result from bargaining.
Fourth, a fundamental cause of the labor movement’s ineffectiveness in the collective bargaining arena is its inability to organize new workers. Despite a significant shift of resources into organizing over the past decade, unions have not been able to recruit enough new members to stem the overall decline in membership. And some of the areas in which the labor movement has had success may have limited upside potential. For example, the unionization of graduate assistants at U.S. universities will likely provide little of the secondary benefits that resulted from organizing the automobile industry seventy years ago.
At the same time, some external developments suggest that we are in a new era and that historical bargaining patterns (and their implied trends) may no longer apply. Collective bargaining has potentially been altered by international terrorism, changing workforce conditions and worker expectations, outmoded labor laws, and the imbalance created when unions organize on a national basis and markets operate globally.
Just as the general global environment changed on September 11, 2001, the threat of terrorism has raised new issues in many industries, including airlines, hospitality, trucking, and professional sports. The new environment could change the role and status of unions. Security concerns could be a critical issue in bargaining involving airline employees. As Nancy Brown Johnson suggests, those concerns have created interest in training programs focusing on such issues as self-defense, assessing passengers more closely, providing weapons to pilots, the screening of passengers and employees, and the incorporation of new background checks for airline employees. Union leadership in these areas could garner member and public support. Union interest, investment, and experience in training have historically been strong. This fact could help airline unions gain widespread public support, which would aid the union movement generally, and increase air passenger traffic. In particular, efforts to address some of the less popular security procedures adopted by airlines at the behest of the U.S. government could increase the support for unions among the traveling public.
One consequence of the September 11 attacks was a dramatic drop in demand for travel-related facilities and services. The hospitality industry was especially hard hit. As Jeffrey Waddoups and Vincent Eade indicate, members of the Hotel and Restaurant Employees Union (HERE) suffered approximately 11 percent (88,000 out of 800,000) of the layoffs occurring in the United States as a result of the attacks. While there are signs that the travel industry is recovering, the economic impact on hotel and hospitality workers has been significant. Moreover, the decline in attendance is likely to affect bargaining in unionized hospitality establishments into the foreseeable future. Prior to the terrorist attacks in the fall of 2001, the labor movement had been buoyed by its success in the hospitality industry. As one of its few significant success stories in recent years, the sector provided some glimmer of optimism to organized labor. The future of collective bargaining in the industry was inalterably changed on September 11.
As Belzer reports, security has also become a great concern in the trucking industry. Issues ranging from the issuance of permits to transport hazardous waste to granting Mexican drivers full access to U.S. highways have come under increasing scrutiny. These concerns could aid organized truckers enormously if they further delay the implementation of NAFTA provisions on trucking. The involvement of the union movement in efforts to oversee security concerns in trucking could also generate public, management, and government support.
The sports industry has similarly been affected by security concerns, albeit to a lesser extent. Attendance at sporting events could be impacted by the more stringent security measures that are being introduced in venues across the country. If attendance falls, revenues will fall as well. Clearly, this would have implications for bargaining in this high-profile industry.
Joint union–management initiatives regarding security could have a positive impact on union growth generally. As virtually every workplace receives mail, the anthrax incidents that followed September 11 are potentially relevant to all workers. Union efforts in this area, both individually and jointly with management, could be seen by workers and the public as a sign that organized labor can play an important role in the workplace. In light of September 11, few industries can ignore the possibility of terrorism. Bargaining over security-related concerns could provide unions with an opportunity to be seen in a positive light by both employees and the public. While it is not possible to predict the long-term effect of the September 11 attacks on U.S. employers or unions, clearly the ramifications of the events of that day are widespread and significant.
Technological change has long played an important role in union–employer relations. In recent years change has touched virtually every industry and has created a situation in which workers need to acquire new skills. Simultaneously, as markets have placed increasing pressure on firms to operate efficiently, the demand for skills has intensified among lower-level employees. This situation is apparent in the health care industry. Hospitals and health care facilities have increased the proportion of lower-skilled (and lower-paid) employees in their workplaces in an effort to cut costs. Health care workers have also experienced another common workplace phenomenon—the intensification of the pace of work in an effort to increase productivity. This is leading to widespread dissatisfaction in health care and is creating one of the more promising situations for union organizing.
In some industries, employers have used technological change to reduce the extent of unionization. As Jeffrey Keefe and Rosemary Batt indicate, unionized workers in the telecommunications industry tend to be concentrated in the wireline segment of the industry. This segment is growing more slowly than other segments and relies on older technologies that are quickly being replaced. Given that workers need to possess increasingly sophisticated skills to meet employers’ expectations, unions may discover an opportunity for organizing and bargaining in the rising pace of work that is apparent in many industries. At the same time, global competition has intensified the nature of work in many workplaces. Union efforts to lessen the intensity of work, accordingly, could create a situation in which a firm is unable to survive. Put differently, union efforts to change situations in firms will not alter the market pressure to compete. This could increase the outsourcing of union jobs to nonunion locations in the United States and other nations. Accordingly, union efforts to address the implementation of use of new technologies will become increasingly important in future bargaining.
Ironically, although increases in the intensity of work should cultivate employees’ interest in unions, it is not clear that this inevitably leads workers to desire representation. Richard Freeman and Joel Rogers (1999), in a widely cited book, reported that almost all of the union members in their study and about one-third of the nonmembers were interested in maintaining or acquiring some form of union representation (pp. 68–70). At the same time, survey respondents generally indicated that they preferred some form of representation that worked cooperatively with employers (p. 5) and that “existing institutions—from unions to EI [employee involvement] committees to government regulations—are either insufficiently available to them or do not go far enough to provide the workplace voice they want” (p. 154). Workers today want to participate at work. This finding has supported speculation that declining union density is due to a variety of constraints, such as antiquated labor laws or unfair tactics by employers.
There is another explanation. Although the sentiments expressed by workers in the Freeman and Rogers’s survey would seem to open the door for unionization, organized labor’s traditional approaches may not be desired by today’s employees. To the extent that unions are seen as opposing employers, they may be viewed as a suboptimal solution to the problem of employee voice. Employees may want representation—just not by a traditional union. It is also worth considering that employees may not desire traditional collective bargaining over wages, hours, and other terms and conditions of employment. They may wish input into the design of products, the selection of supervisors, or the processes used to produce a product or provide a service. If this is the case, collective bargaining, as currently practiced, will not provide the outcomes employees seek. The dearth of research in this area means that we do not know what employees really want from their cooperative interaction with their employers. Until we know more, it is unwise to assume they want a traditional bargaining approach or relationship.
As we have noted, U.S. labor law has been criticized for many years as being unfriendly to unions. Unions, as well as many independent observers, have argued that the National Labor Relations Board (NLRB) and U.S. courts regularly rule in favor of employers, nonunion workers who do not seek union representation, and conservative groups (e.g., National Right-to-Work Committee). In recent years, it has been argued that the politicization of workplace relations has prevented even minor changes in the existing system of laws covering employee–employer interactions. As Thomas Kochan has forcefully argued, it is time to create a new social contract—one that aligns today’s workforce with the institutions and regulations that govern it (Kochan 2000). Kochan’s concern is based on the growing problems arising from the incongruity between many Depression era laws and the reality of today’s occupational structures, global marketplace, and changing employee preferences.
Considerable evidence exists to suggest that there are aspects of U.S. labor law that create significant problems for unions. First, these laws cover an increasingly smaller proportion of the potential workforce. As exclusions grow, the power of traditional collective bargaining declines. Paul Clark provides an excellent example of this phenomenon in his discussion of recent U.S. Supreme Court decisions that address the issue of whether registered nurses are employees covered by the National Labor Relations Act (NLRA) or managers who are excluded. The underlying issue is the fact that the occupational composition of the workforce has changed dramatically since the NLRA was enacted. Because of the increase in managerial and professional work; the decline in manual, craftsman, and other laborer positions; and the increase in managerial duties for all sorts of employees, more employees have been excluded from coverage by the Act. The result is that the NLRA has become relevant to fewer and fewer workers over time (Sockell 1989).
Exclusion occurs because the workers are seen by labor tribunals as managers, independent contractors, or supervisors. The recent cases involving nurses suggest the courts may be moving in this direction regarding that profession. As most nurses direct the work of other health care employees, courts are increasingly defining them as managers who are excluded from coverage by the NLRA. Among other reasons, the inclination of courts to move in this direction is critically important because of the growing use of employee teams by employers. These teams are often given some say in decisions that the courts view as managerial in nature. Accordingly, it is inevitable that future interpretations of the NLRA will exclude more occupations from coverage. This will make it difficult for a greater number of employees to organize and bargain using traditional approaches.
Second, under the NLRA the scope of bargaining traditionally has not extended beyond wages, hours, and other terms and conditions of employment. This often excludes issues that are becoming increasingly important to employees, unions, and employers. Essentially, the existing scope of bargaining permits the establishment of an economic arrangement between employers and unions. Internal union affairs are left to unions alone to regulate, and employers have a virtual monopoly on decisions involving the business and where it should go in the future. At a time when the nature of jobs has changed and employees often have broader responsibilities, the existing scope of bargaining is increasingly out of step with employees’ desires. This likely reduces employees’ interest in traditional union representation.
Whereas many researchers have focused in recent years on legal impediments to unions in organizing campaigns, we believe the declining scope of coverage under the NLRA and the narrow scope of bargaining are equally significant problems. Even if the labor movement were able to win changes in the law that might make it easier to organize new workers, it is likely that, over time, the economy would render any such changes irrelevant. The structure of the economy is changing in ways that will accelerate the exclusions previously mentioned. And the narrow scope of bargaining creates a situation in which collective bargaining provides few benefits for employers and increasingly ignores issues of concern to workers. These factors will likely create pressures in all industries that do not favor union representation. For example, Stanger notes the problems that have arisen for newspaper unions attempting to address the growth of digital publications. Existing union rivalries, approaches, and conventions have worked to impede organizational success.
Interestingly, unions have engaged in few efforts to organize outside of the NLRA, and researchers have offered little advice on the likely success of such operations. Although this possibility seems to be viewed as a no-win situation, it may soon be one of the few avenues open to unions interested in representing workers. The current situation makes it likely that some organizing and bargaining efforts outside of the scope and protection of the NLRA are inevitable in coming years. Success in such efforts may allow unions to revitalize themselves and improve their image in society.
Unions were successful in the past, in part, because they were able to “take wages out of competition.” When all competing employers paid the same union wage scales, employers needed to compete on other bases. Today, in a global marketplace, it is increasingly impossible for U.S. unions to take wages out of competition. Firms regularly transfer operations to other countries in order to lower costs and improve economic results. This illustrates a dilemma faced by the world’s labor movement. Firms are increasingly organized on a global basis, while unions are organized on a national or local one. This makes it more difficult for unions to deal effectively with competitive decisions made by businesses. Moreover, global business organization ensures that labor laws favorable to unions in a particular country will likely come under pressure over time as businesses respond to the perceived disadvantage of such laws and relocate operations to other nations.
In several of the chapters, contributors mention the increasing efforts of unions to consolidate in an effort to better compete with employers. Until union movements coordinate their efforts more effectively on a global basis, employers will retain an advantage. As there are many factors standing in the way of such consolidation, it is difficult to be optimistic about the future of organized labor. To the extent that unions coordinate efforts, however, it may be possible for national unions to gain occasional victories in negotiations with employers.
Overall, the state of collective bargaining in the U.S. private sector in 2002 is mixed. In several industries, bargaining appears to be on the decline. In only a few does it appear that bargaining has the potential to play a greater role in the future than it has in the past. In virtually all of the industries studied, collective bargaining is going through a period of change.
The plight of collective bargaining is directly tied to labor’s inability to organize new workers. With few exceptions, union organizing efforts have not offset yearly membership losses due to plant closings, layoffs, and retirements. And while some observers contend that workers would join unions if there were fewer risks associated with doing so (e.g., Freeman and Rogers 1999), a good case can also be made that there is little clamor for bargaining from the people who could benefit most from it. Power remains a central theme in any analysis of collective bargaining in the U.S. private sector. If unions cannot organize more effectively in the future than they have in the recent past, union power will continue to erode.
Although the trends have been negative for many unions, considerable variation exists in the prevailing strength of bargaining across U.S. private-sector industries. In particular, unions representing employees in occupations that have strong bargaining power by virtue of their special skills and are thus difficult to replace (e.g., pilots, star athletes, etc.) continue to negotiate favorable outcomes. Bargaining unit members in other occupations, however, face increasingly difficult times in their efforts to secure gains.
In industries that have maintained union density in core jobs (e.g., autos, telecommunications), some bargaining power remains. The main challenge to unions, however, differs across those sectors of the economy. In the auto industry, the UAW must organize new competitors (often foreign transplants that locate in parts of the United States that have been traditionally unsympathetic to unions). The union must also work with Big Three employers to increase their market share. Such cooperation will create a difficult dilemma for the union, as it will face pressure from members to steer the gains of cooperation to members rather than managers or shareholders. Unless enough of the gains go to the firms, corporate investment in unionized plants will likely decline. If the UAW is not able to walk this thin line effectively, the UAW’s future may be dimmer than it otherwise might be. This issue will be especially salient in the next several years as Japanese firms seek to gain increased market share in segments of the industry that have driven profits for the Big Three (e.g., SUVs and large pickup trucks).
In telecommunications, the challenge is to ensure that firms allow unionized workers to participate in growing segments of the market, such as wireless communications and Internet protocol communications, rather than assigning such work to nonunion employees. While unions in this industry will also face pressure from both employers and employees, they will be required to lobby in concert with firms for regulatory actions that help the industry. As unions have long been active politically, joint efforts with employers in this arena could lead to enhanced options for unionized telecommunications employees.
The specific challenges in other industries differ, though unions uniformly must find a way to enroll new members and to gain public support. Depending on the circumstances facing specific unions, the trend may be toward productivity bargaining or de-unionization. At the margin, however, unions in every industry face significant pressure to change. Minor adjustments have not made organized labor stronger in recent years. When John Sweeney swept into power at the AFL-CIO, there was hope that an increased emphasis on organizing would help the labor movement grow. Investments in this area, however, have not produced the kinds of results necessary to change labor’s fortunes. Simultaneously, campaign finance reform legislation threatens to weaken unions’ political power. The current state of the labor movement raises the issue of whether the product unions are offering to potential members is an attractive one. The context provided across the chapters suggests some insight into the ways that different unions have sought to make their product more attractive. Attention to this concern may signal the industries that have a union presence a decade from now. At a minimum, the variation in union approaches across industries offers promise that some potential solutions will emerge.
The critical nature of the predicament faced by some unions may be the impetus necessary for change and revival. If this is the case, the trucking and newspaper industries merit watching. Pressure from several sources puts in doubt the future of bargaining in those sectors. How unions in these two industries respond will provide a clue as to the labor movement’s future. That future is tied inextricably to the rise of talented new union leaders—ones who are ready to jettison practices, and even tradition, if necessary to create a revival.
Many forces influencing collective bargaining are outside the control of unions. For example, recent court decisions mean that bargaining may be negated for many employees who have a possible managerial component in their normal duties. Depending on how courts view team-based arrangements in industries such as the hospitality sector, it is possible that recent union gains could be short-lived. In the past, national boundaries posed severe restraints on organized labor. Today, unions have likely reached a point where international combinations present one of the few opportunities to revitalize the labor movement. The political situation in the United States likely will continue to diminish the power of the union movement in the foreseeable future. And if a significant number of union leaders continue to be unwilling or unable to break with the past, mechanisms other than collective bargaining may arise to aid the interests of workers.
Does collective bargaining have a future in the American private sector? We invite readers to draw their own conclusions about this critical question as they read about the experiences of the eight major industries examined in this volume.
Barbash, Jack. 1980. “Collective Bargaining: Contemporary American Experience—A Commentary.” In Gerald G. Somers, ed., Collective Bargaining: Contemporary American Experience. Madison, WI: Industrial Relations Research Association, pp. 553–88.
Freeman, Richard B., and Joel Rogers. 1999. What Workers Want. Ithaca, NY: ILR Press.
Kochan, Thomas A. 2000. “Building a New Social Contract at Work: A Call to Action.” Perspectives on Work, Vol. 4, no. 1, pp. 3–12.
Sockell, Donna. 1989. “The Future of Labor Law: A Mismatch Between Statutory Interpretation and Industrial Reality.” Boston College Law Review, Vol. 30 (July), pp. 987–1026.
Somers, Gerald G. (ed.). 1980. Collective Bargaining: Contemporary American Experience. Madison, WI: Industrial Relations Research Association.
Voos, Paula. 1994. “An Economic Perspective on Contemporary Trends in Collective Bargaining.” In Paula Voos, ed., Contemporary Collective Bargaining in the Private Sector. Madison, WI: Industrial Relations Research Association, pp. 1–23.
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