The Closed Shop, the Union Shop, and the Open Shop- 123docz.net

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MA RI CT NJ DE MD NH VT

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Figure 1

362 C H A P T E R 1 5

Certainly the most surprising addition to the ranks of right-to-work states was Michigan—long one of our most heavily industrialized and unionized states. When Republican Governor Rick Snyder signed legislation passed by Republican legislative majorities in 2012, Michigan became the 24 th right-to-work state.

The Taft-Hartley severely limits the extent of the closed shop (closed to nonunion members). However, unions have sometimes gotten around this prohibition by calling a closed shop a union shop (see the nearby box).

Taft-Hartley also prohibits jurisdictional disputes and secondary boycotts. A jurisdictional dispute occurs when two unions, each vying to organize a company, picket that company, which has no dispute with either union. A secondary boycott is directed against a company that isn’t party to a strike, such as a trade supplier or a customer or a retail outlet.

Landrum-Griffi n Act (1959) This law has four main provisions: (1) a “bill of rights”

for union members, (2) provision of election procedures, (3) limits on takeovers of locals by national unions, and (4) a listing of the fi nancial responsibilities of union offi cials.

Why was this law necessary? Consider this provision from its bill of rights: “No member of any organization may be fi ned, suspended, expelled, or otherwise disciplined except for nonpayment of dues . . . unless such member has been (a) served with written specifi c charges; (b) given a reasonable time to prepare his defense; and (c) afforded a full and fair hearing.”

Why outline election procedures? Because in many unions the leaders were able to perpetuate themselves in offi ce. Why limit takeovers of locals? Because this device was often used to silence opposition. Finally, the main reason to deal with union fi nances was to cut down on embezzlement of union funds.

Craft Unions versus Industrial Unions

As you can see from Figure 2, union membership rose spectacularly from the mid-1930s to the mid-1940s. The major impetus was the Wagner Act, which legitimized unions and facilitated their organizing workers in the nation’s basic industries of auto, steel, and rubber. During this time a split developed within the AFL, leading to the formation of the Congress of Industrial Organizations (CIO) in 1935. The split was caused by a dispute over whether to organize along craft lines, as the AFL had been doing for 50 years, or along industry lines, as advocated by the leaders of the CIO.

Craft unions are organized along the lines of particular occupations, such as air traffi c controllers, plumbers, operating engineers, airline pilots, or teachers. In general these are relatively well-paid jobs requiring years of training.

Closed shop

Jurisdictional disputes and secondary boycotts are prohibited.

Union membership rose spectacularly in the mid-1930s.

Craft unions are labor unions composed of workers who engage in a particular trade or have a particular skill.

Percentage

1900 1920 1940 1960 1980 2000 2020

Union membership as a percentage of the civilian labor force

Year

Figure 2

Union Membership, 1900–2012 Union membership as a percentage of the civilian labor force reached a peak in the mid-1950s and has declined steadily since the mid- 1970s. The best decades for labor organizing were the 1930s, 1940s, and 1950s.

Source: Bureau of Labor Statistics.

Labor Unions 363 Industrial unions , such as the United Steel Workers, the United Auto Workers, and

the United Mine Workers, are organized along industry lines, without regard to craft.

Lumped together in one union are skilled and unskilled workers doing varied types of work. What bonds them is that they all work in the same industry.

In some industries, particularly those with unskilled or semiskilled mass-production workers, it makes more sense to organize along industrial rather than craft lines. Unlike plumbers or airline pilots, the people who put together cars can be trained in a couple of hours—and replaced just as quickly. They simply don’t have a craft that sets them apart from their coworkers.

The confl ict within the AFL over whether to organize along craft or industrial lines led to the great schism of the organization in 1935. Most of the AFL leadership, who headed the craft and building trades unions, believed that machinists, for example, whether employed in autos, steel, or any other industry, should be organized into a machinists’ union. But the leaders of the breakaway Congress of Industrial Organizations believed all the workers in an industry should be organized into an industrywide union regardless of craft.

In the mid- to late 1930s there was a tremendous spurt of labor organizing by the CIO in steel, autos, rubber, oil, and other areas of heavy industry. The AFL also began organizing along industrial lines during this period. As we can see in Figure 1, these were the golden days of union organizing.

The Taft-Hartley Act unintentionally sparked efforts to reunite the AFL and the CIO.

The main obstacle to the merger was no longer the philosophical one of whether organization should be carried out along craft or industrial lines. That issue had been settled by the late 1930s when the AFL began to organize its own industrial unions. In 1955 the two groups merged to form the AFL–CIO.

As you’ll notice in Panel A of Figure 3, the most highly unionized states are all in the North, Midwest, and Far West. And the least unionized states are all in the South.

The states with very high unionization rates—with the exception of Alaska—have heavy

Industrial unions are unions that represent all the workers in a single industry, regardless of each worker’s skill or craft.

AFL–CIO merger The AFL–CIO is one of the nation’s largest labor organizations. It consists of craft and industrial unions, and promotes union organization and legislation protecting the economic interests of labor.

0 10 20 15

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Percentage

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Alaska Hawaii Washington Michigan New York

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18.9 17.5 Panel A: States with Highest Union membership

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North Carolina Arkansas

Virginia

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Panel B: States with Lowest Union membership

Figure 3

States with Highest and Lowest Rates of Unionization, 2011 Union membership varies widely from state-to-state. New York is the most highly unionized state, where 23.2 percent of all workers are union members. In North Carolina just 2.9 percent of all workers are unionized.

Sources: Panel A: http://www.hlntv.

com/article/2012/12/13/right-work-top-10- states-union-membership ; Panel B:

http://247wallst.com/2013/102/22/

the-states-with-the-stron g est-and-weakest- unions-3/4/

364 C H A P T E R 1 5

concentrations of manufacturing industries, which have generally been relatively easy for unions to organize. 1

New York, with a unionization rate of 23.2 percent, has by far the most union members of any state (see Panel A of Figure 3). At the other end of the spectrum is North Carolina, with a unionization rate of just 2.9 percent (see Panel B of Figure 3).

In general, the South is less industrialized than the rest of the country, and more likely to have right-to-work laws, both of which tend to hold down union membership.

Union Organizing since the 1950s

By the 1940s unions had become a well-established and widely accepted American institution. Indeed, we can thank them not just for the eight-hour workday and the fi ve- day workweek, but for paid vacations, health care benefi ts and pensions, safety regula- tions, bans on sweatshops and child labor, and other workplace advances we now take for granted. 2

The South continues to be the least unionized section of the country. Long the target of AFL–CIO organizers, this region has remained a tough nut to crack. Right-to-work laws, strong local conservatism, and anti-union feeling, as well as the economic power of the local fi rms, have kept labor organizing at a low ebb.

Union membership peaked decades ago (see Figure 2). In 2012 just 11.3 percent of the labor force was unionized—the lowest level since 1916. Millions of workers had shifted from manufacturing to service industries, and it is much harder to organize computer pro- grammers, insurance adjusters, and fi nancial analysts than it is to organize factory workers.

Walmart has 1.4 million employees in the United States, but not one is a member of a union. In 2000 the United Food and Commercial Workers did manage to organize butchers in a Texas Walmart, but two weeks later the company closed down its meat- cutting departments nationwide. In 2005 a store in Quebec, Canada, where employees voted to unionize, was also closed. 3

The only Walmart workers in North America covered by a union contract are the eight employees of the automotive department of a store in Gatineau, Quebec. A contract, imposed by a Quebec government arbitrator in 2008, is a three-year agreement that provides the eight employees with an improved wage scale, annual raises, and a griev- ance process for settling disputes.

Why has Walmart been such a tough nut for unions to crack? Aside from manage- ment’s fi erce opposition, there are two other important factors: Walmart has a large part-time, transient workforce and many Walmart employees work in southern states where unionism isn’t welcome.

In 2005 the United Food and Commercial Workers suspended its strategy of seeking to unionize Walmart store by store. “When you’re dealing with a company that’s so big and ruthless, you can’t even get enough leverage going store by store,” said Paul Blank, the union’s Walmart campaign director. “Even when you win an organizing drive, you lose because the company will simply shut down a store.” 4

While Walmart is fi ercely anti-union at home, it sometimes sings a different tune overseas. In 1999 it purchased Asda, a unionized chain of stores that now accounts for one-tenth of Walmart’s sales in Britain. Until 2006, the company did negotiate separate

1 If you’re interested in politics, it is striking that the 10 most heavily unionized states are all so-called blue states, which tend to vote Democratic, while the 10 least unionized states are all so-called red states, which tend to vote Republican.

2 See Philip M. Dine, State of the Unions (New York: McGraw-Hill, 2008), p. xix.

3 Was the store closed because Walmart wanted to keep out the union? Quebec’s provincial labor commission found that Walmart had good and suffi cient cause to close the store. The United Food and Commercial Work- ers Union took the case to court, and it fi nally reached Canada’s highest court. In 2009, that court upheld the decision of the Quebec provincial labor commission.

4 Steven Greenhouse, “Opponents of Walmart to Coordinate Efforts,” The New York Times, April 3, 2005, p. 20.

Labor Unions 365 collective bargaining agreements with the union in each workplace. But in that year,

threatened with a costly strike, Walmart reached an agreement that established nationwide collective bargaining for distribution center employees. The union, which is now free to recruit new members on the job, is hoping to establish a national collective bargaining agreement for Asda’s retail store employees as well.

Is Walmart the nation’s only large retail chain that’s nonunion? Hardly. Target, Costco, Walgreens, Best Buy, Home Depot, and Lowe’s are also nonunion.

The United Auto Workers, whose hourly workforce at the Big Three (General Motors, Ford, and Chrysler) has shrunk to just 139,000 from a peak of 1.5 million in the mid-1970s, is caught in a bind. It has been unable to organize in any of the foreign- owned plants (owned by Honda, Toyota, Nissan, and other companies), located mainly in the South. Until now, to make unionization less attractive, the foreign-owned factories have boosted wages very close to the UAW’s $25 an hour. But as they gain market share, the pressure to match Big Three wages will lessen. Former UAW president Douglas Fraser, now a labor studies professor at Wayne State University in Detroit, has observed,

“Sooner or later . . . the Big Three are going to say, ‘We’re becoming noncompetitive, and unless you organize the transplants, we’re going to have to modify the proposals we make to you.’” 5

Which is the biggest labor union today? As you can see in Table 1, it’s the National Education Association, with 3 million members.

Public sector unions have come under heavy political attack in recent years. In 2005, on the day he took offi ce as governor of Indiana, Mitch Daniels signed an executive order abolishing the right of public employee unions to collective bargaining. In 2011, at the behest of their governors, the legislatures of Wisconsin and Ohio also did away with collective bargaining. The Ohio law was overturned later in the year by a voter referendum, while the Wisconsin law was largely overturned by a county court judge. The state governments of Indiana, Wisconsin, and Ohio are under the control of Republicans who believe that public employee unions have been too successful in securing large pay increases and overly generous health benefi ts and pensions that are substantially raising their budget defi cits. The fact that these unions are major contributors to the Democratic Party has also been an important consider- ation. It is virtually certain that this struggle over collective bargaining will continue for years to come.

There has been a precipitous decline in private sector union membership over the last fi ve decades. Back in 1955 more than a third of American workers in the private sector belonged to a union. As late as 1973 24.2 percent of all workers in the private sector were union members, but just 6.6 percent were members in 2012

A private sector union is a labor union whose members work for private fi rms rather than for the government.

5 See BusinessWeek , June 10, 2002, p. 78.

TABLE 1 Membership of Largest Labor Unions, 2012

Union Membership

National Education Association 3,000,000

Service Employees International Union 2,100,000

American Federation of State, County and Municipal Employees 1,600,000

American Federation of Teachers 1,500,000

International Brotherhood of Teamsters 1,400,000

United Food and Commercial Workers 1,300,000

United Steel Workers 875,000

International Brotherhood of Electrical Workers 655,000

Laborers’ International Union 500,000

366 C H A P T E R 1 5

(see Figure 4). These losses were partially offset by the unionization of the public sector. In 2012, 35.9 percent of the public sector was unionized. In fact, the 7.3 million workers in public sector unions now outnumber the 7.0 million workers employed in the private sector. Union membership as a percentage of the labor force has been falling since the mid-1950s (see Figure 2), but the decline in big craft and industrial unions has been even faster. Which unions in Table 1 have large numbers of government employees? They are the National Education Association (number one);

the Service Employees International Union (number two)—a substantial minority of members are government employees; the American Federation of State, County, and Municipal Employees (number 3); and the American Federation of Teachers (number 4).

A public sector union is a labor union whose members work for government agencies.

Had the employers of the past generation dealt fairly with men, there would have been no trade unions.

—Stanley Baldwin, former prime minister, Great Britain

The Formation of Change to Win

Upset with declining union membership, fi ve large unions withdrew from the AFL–CIO in 2005, taking with them 40 percent of the federation’s members. The Teamsters, the Service Employees’ International Union, the United Food and Commercial Workers, the Laborers’ International Union, and UNITE HERE (which represents hotel, restaurant, textile, and apparel workers)—formed the Change to Win coalition. They were joined by the United Farm Workers, which left the AFL–CIO a few months later, and the Car- penters and Joiners, which had pulled out of the AFL–CIO in 2001.

The new 5.4 million member group had hoped to stanch labor’s decline by mount- ing a national recruiting drive involving entire industries. It targeted the 50 million workers whose jobs cannot be sent overseas or be replaced by machines. Many of these jobs pay poverty-level wages and include janitors, dishwashers, hotel maids, cashiers, nursing home aides, and security guards. Possible targets for unionization drives include Home Depot, Federal Express, and Walmart, as well as the large hotel chains.

Change to Win is a group of unions that split off from the AFL–CIO in 2005, largely because they were unhappy with the state of union organizing, and hoped to revive the labor movement.

Figure 4

Private Sector Union

Membership as a Percentage of Total Private Sector

Employment, 1973–2012 In 1973 nearly 1 of every 4 people working in the private sector was a union member. By 2012 fewer than 1 in 13 was a union member.

Source: Bureau of Labor Statistics.

24.2%

0 ’75 ’80 ’85 ’90 ’95 ’00 ’05 ’10

6.6%

Year

Percentage

To get the most current fi gures on union membership, go to www.stats.bls.gov. Use A-Z Index in the upper right corner. Click on “U” and then “Union membership.”

on the web

Labor Unions 367

Since the formation of Change to Win, the United Farm Workers joined while UNITE HERE and the Laborers’ International Union have left. In 2012 the coalition of unions had a total of 6 million members.

America is one of the least unionized industrial nations in the world. Among the nations shown in Figure 5, which has data for the year 2011, the United States and France had, by far, the lowest unionization rates.

Jobs: Exportable and Nonexportable

There is work that must be done in the United States, and there is work that can be done abroad. If we import a good or service, then obviously it can be produced in another country. Since the mid-20th century, four main groups of unionized workers have lost their jobs to foreigners—those in the auto, steel, textile, and apparel industries. Clearly, we can import cars, steel, textiles, and clothing.

One thing we can’t import is trucking deliveries. And that service is dominated by the International Brotherhood of Teamsters. Why do these folks earn well over $20 an hour, while millions of other Americans work just as hard for only $8 or $9 an hour?

How much someone is paid comes down to the supply of labor and the demand for that labor. But when that labor must be used locally, then that supply is limited to those currently residing in the United States.

Fifty years ago our largest unions were industrial and craft unions, most of whose members worked in manufacturing. Now, as you can see from glancing back at Table 1, a majority of our union members are service workers. And more to the point, their jobs are relatively safe from foreign competition.

The Economic Power of Labor Unions

Many people accuse unions of being monopolies. Indeed, they were prosecuted under the Sherman Antitrust Act during the fi rst two decades of this century. In a sense, of course, unions are monopolies. For example, the painters’, plumbers’, carpenters’, long- shoremen’s, and teamsters’ trades are nearly 100 percent unionized. Aren’t these monopolies?

We defi ne a monopoly as the seller of a good or service for which there are no close substitutes. Of course, labor is not really a good or service but rather a factor that helps

Labor is the capital of our working man.

—Grover Cleveland, U.S. p resident 0

20 40 30

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Percentage

United

States Germany Japan United Canada

Kingdom Italy Sweden

France 8

Australia

18 19 19

F igure 5

Union Membership as a Percentage of Labor Force, Selected Industrial Countries, 2010 or 2011

Source: Author’s Internet search.

The Closed Shop, the Union Shop, and the Open Shop

The Theory of International Trade

Our Trade Defi cit with Japan and China