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Jewish World Review Sept. 28, 1999 /18 Tishrei, 5760

Michael Barone

Michael Barone
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Econophone

The unions go public

http://www.jewishworldreview.com --
NEXT MONTH the AFL-CIO meets in Los Angeles, and there is much speculation about whether the organization will endorse Al Gore or, at the behest of Bill Bradley supporters, stay uncommitted. Under the leadership of John Sweeney, the AFL-CIO spent more money on campaign ads in 1996 and conducted more-vigorous on-the-ground campaigns in 1998 than it had in recent years.

But the AFL-CIO and the union movement are not what they were a generation ago, and they do not exert their political muscle in the same ways or for the same goals. Despite occasional well-publicized organizing victories, union membership continues to shrink.

The high-water mark of unions came in 1953, when union members accounted for 27 percent of the work force. In 1998, that number was down to 14 percent. The bulk of union memberships in 1953 were in giant industrial unions, in the auto, steel, rubber, and garment industries, and in the skilled construction trades: These were the main components of the craft union AFL and the industrial union CIO, which merged in 1955. Union hiring halls controlled construction jobs in most big cities; industrial unions used political clout to get presidents to pressure companies for generous contracts.

For a long time, this system seemed to work. Academic admirers of unions compiled studies showing that union workers made more money than nonunion workers. The paradigmatic example was in the auto industry when the Big Three companies, pro-union economist John Kenneth Galbraith argued, could charge any price for their cars and generate any level of sales through advertising. Unions helped members by extracting money not from managers or stockholders but from consumers.

Shrinking muscle. If that view was ever correct, it is no longer today. The Big Three, it turned out, did get competition from foreign firms, and even the shrewdest advertising couldn't convince Americans to buy a shoddily assembled Big Three clunker every couple of years. Economists of all stripes now agree that virtually no firms have pricing power. They are disciplined closely by the market and, to make profits, must cut costs and improve quality. So there is no way for unions to extract money from consumers. Instead, they have been forced to agree to wage cuts and givebacks and the outsourcing of work to lower-wage firms.

Union grievance procedures, formed to protect workers from the time-and-motion studies of the 1930s, now block almost all modern management techniques. So private-sector unions are in decline. In 1998 unions represented only 16 percent of employees in manufacturing, 26 percent in transportation and communications, 18 percent in construction, and 12 percent in mining.

In contrast, public-sector unions have been thriving. Some 37 percent of government workers are union members. If private-sector unions can't squeeze money from consumers, public-sector unions have been able to get it from taxpayers. Soon a majority of union members will be public employees; already 43 percent are, and John Sweeney's old union, the Service Employees, gained many new members from public-sector jobs.

In some ways, this has strengthened the union movement generally. Since most corporate CEOs don't have to worry much about unions, they put little pressure on Bill Clinton and Democrats to support Republican measures to allow more-flexible management techniques. Businesses gave virtually no support when California Republicans tried to block unions from using members' political dues for political campaigns without their permission.

But there are signs that public-sector unionism has political vulnerabilities, too. Public-sector unions' incentives are to increase workers' pay and to insulate them from accountability. Especially vigilant are the teachers' unions, which for 35 years have opposed merit pay, teacher testing, and accountability for results. With a cache of dues money and articulate members, teachers' unions have been the most powerful lobbying force in nearly all state capitals.

But voters are finally bridling at paying teachers more and getting lousy results. Support for school choice, charter schools, and other alternatives has grown sharply. Voters have become as discontented with the services provided by public-sector unions in the 1990s as they were with the automobiles produced by private-sector unions in the 1970s.

But for the moment, the public-sector unions are setting the AFL-CIO's course. The United Auto Workers and other industrial unions want to avoid any presidential endorsement, in the hope of gaining concessions on trade issues from Gore and Bradley. But the public-sector unions, led by the American Federation of State, County, and Municipal Employees, are eager to endorse Gore and appear to have the votes. Gore's "reinventing government" policies, and the teachers' unions' recent moves to portray themselves as favoring reform, are attempts to respond to voters' discontent with union members' work output without threatening the power or dues income of the unions.

That has emerged as the AFL-CIO's top goal.



JWR contributor Michael Barone is a columnist at U.S. News & World Report and the author of the biennialAlmanac of American Politics. Send your comments to him by clicking here.

Up

08/31/99: China's strait flush
08/25/99: The first two contests
08/03/99: Paddling upstream
07/08/99: Taking Hillary seriously
06/22/99: Trying the lawyers
06/07/99: Facts on the ground

©1999, Michael Barone