Unions and Economic Competitiveness, edited by Lawrence Mishel and Paula B. Voos
Friedman, Sheldon
UNIONS AND ECONOMIC COMPETITIVENESS, edited by Lawrence Mishel and Paula B. Voos. M.E. Sharpe, Inc., 1991. 365 pp. $16.95. American management has always been vehement in its opposition to...
...If unions had spouses, these scholars doubtless would have concluded that they are no longer being beaten...
...The German model demonstrates that robust economic performance can go hand-in-hand with high wages and, contrary to the example of Japan, strong unions as well...
...Marshall advocates doing this on the basis of high wages and living standards, but he hastens to add that, if left to their own devices, corporations are equally if not more likely to pursue a low-wage path...
...Marshall's vision is insightful but inadequate...
...Freeman projects continued decline in union density, and concurrent decline of U.S...
...no longer limited to the option of "voting with their feet," less easily cowed union workers can stand and fight...
...They present new and sure-to-be controversial evidence that employee participation programs, in and of themselves, are of little if any value in nonunion workplaces...
...has dropped to levels not seen since the 1920s does not mean that today's labor movement has come to resemble the labor movement of the 1920s, as Freeman suggests...
...This book contains eight essays by an array of new and well-established scholars...
...On balance, however, Freeman finds the decline in union density to be alarming, and bad for the U.S...
...Rather than scrap Keynesianism because it can no longer stabilize economies at a national level, why not reconstitute it at a global level...
...Rather, unions increase their members' wages primarily by redistributing profits to workers, and by forcing employers to become more efficient...
...We urgently need new international economic rules that would put meaningful pressure on trade surplus countries (such as Japan) to bring their surpluses down...
...It also helps explain why declining union density since the 1970s has been accompanied by growing disparities of income and wealth, increased wage inequality, and a decrease in labor's share of national income relative to capital...
...It is Germany, not Japan, that offers useful lessons for the United States...
...Nevertheless, the book deserves high marks for demonstrating so convincingly that in the absence of unions strong enough to prevent it, U.S...
...Herein lies an important key to understanding the vehement opposition of American employers to unions, despite the overwhelming evidence that unions do not harm economic performance...
...An essay by Richard Freeman revisits the author's influential 1984 book, What Do Unions Do...
...nontraditional compensation schemes, such as productivity gainsharing...
...Clearly, it is in the enlightened self-interest of American workers and their unions to raise labor standards, at home and abroad...
...Ever the objective academic, Freeman concludes that there would be limits to the benefits of stronger unions...
...workers and their unions to help raise wages and improve conditions in other countries...
...Eaton and Voos find that participation programs and other innovations are more prevalent in unionized workplaces...
...Employer opposition to unions must therefore have less noble causes than their concern about the national economy...
...Freeman finds that far from harming economic performance, unions are a positive force in the economy...
...By protecting workers against arbitrary discharge and other forms of employer retribution, unions provide them with a "voice" in the workplace (and, though Freeman doesn't dwell on it, in the larger society as well...
...Why not tax those surpluses, and use the proceeds to fund economic development, as Lester Thurow has suggested...
...Turnover is lower in unionized workplaces...
...Why then, Turner asks, are U.S...
...Although fullfledged international collective bargaining may not be around the corner, there are plenty of concrete steps that can be taken here and now by U.S...
...Why...
...Unions are found to improve their members' wages not, or not primarily, at the expense of the larger community, as would be the case if union wage gains simply were passed on to consumers in the form of higher prices...
...Established unions in the 1920s turned inward by design...
...academics, news media, and managers so fixated on that less desirable model, Japan...
...Although it is good to have academic defenders of unions of Freeman's stature, quirks and "objectivity" notwithstanding, there is a weakness in his approach—empirical research with a theoretical perspective rooted in neoclassical economics...
...furthermore, the decline of unionization in the United States has been associated with the decline of the U.S...
...What Eaton and Voos merely assert is confirmed in a paper by Maryellen Kelley and Bennett Harrison...
...American management has always been vehement in its opposition to unions...
...Hardly anyone in today's labor movement would dispute the importance of organizing new members...
...He may turn out to be right, but if so, it will not be on the basis of either the theory or the evidence that he presents...
...When that happens, the entire economy can benefit...
...Changes in the world economy, regarded by Marshall as inevitable, have, he argues, rendered equally ineffective traditional Keynesian economic policies and traditional trade-union strategies of equalizing labor costs in order to remove labor as a factor in economic competition...
...In the new global economy, the proper role of both governments and unions is to make national economies more effective international competitors...
...Government must force corporations to take the high-wage path, first, by requiring them to invest heavily in worker training and second, by enforcing ground rules that enable unions to organize...
...The first three (by Thomas Karier, Dale Belman, and Jeffrey Keefe, respectively) focus on the relationship between unions and the trade deficit, firm performance, and the adoption of new technology...
...Setting aside the question of whether these programs really are beneficial to workers, unions, or even employers, the authors tackle the conventional wisdom that workplace innovations are less frequent in unionized settings...
...co-authored with James Medoff...
...profit sharing and employee stock ownership (ESOPs...
...Less turnover also makes firms more willing to invest in worker training...
...For those who need convincing on these points or who need evidence with which to convince others, these papers will be a valuable resource...
...Rather than scrap worker solidarity because it is no longer possible for national trade union action to remove labor costs from economic competition, why not reconstitute worker solidarity at an international level...
...Freeman's approach may be useful for interpreting and even for predicting marginal changes, but it sheds far less light on the prospects for or likely impact of more sweeping structural changes...
...corporations can and will pursue a low-wage path to economic competitiveness, with ugly consequences for us all...
...They conclude that in a unionized setting, workplace innovations are more likely to benefit management as well...
...Neither is true today, despite labor's serious difficulties...
...Prolabor scholarship in the cautious 1990s is a far cry from the eloquent partisanship shown by labor's intellectual supporters in decades past...
...The revitalized unions must facilitate the spread of new, post–mass production methods of work organization...
...In fairness, this approach was taken to demonstrate that even if you accept a narrow definition of economic competitiveness, there is no evidence that unions are detrimental to it...
...The relevant literature on these subjects is carefully reviewed, and new evidence presented...
...unionism...
...In addition to establishing a modicum of economic democracy, unions give workers a fighting chance to improve conditions that affect not only their daily lives but the performance of the enterprise and the overall economy...
...The fact that union density in the U.S...
...This critique of Marshall's paper suggests a shortcoming of the volume as a whole...
...To take one gratuitous and unproven example, Freeman doesn't think Scandinavian rates of unionization (more than 85 percent of the work force in Sweden) would be appropriate for the United States...
...They do not lead to higher productivity in nonunion workplaces, nor is there any evidence that workers derive benefits from such programs when no union is present...
...is not explicitly addressed...
...economy...
...and worker-participation schemes, such as quality circles, "employee involvement" programs, and participation in strategic business decisions...
...If union wage gains for their members came at the expense of 100 • DISSENT Books the larger community rather than from a redistribution of profits, the opposite outcomes would have been expected...
...But the resulting implicit assumption, that workers and their unions must now make common cause with their national capitalists in order to "compete," is deeply flawed...
...An essay by Adrienne Eaton and co-editor Paula Voos addresses the relationship between unions and a variety of workplace innovations, including new methods of work organization, such as team production systems...
...What disturbs me the most about this book is its defensive tone...
...economy...
...The final paper in the volume, by former Secretary of Labor Ray Marshall, draws on his work as a co-chair of the Commission on the Skills of the American Workforce, and the Commission's report, America's Choice...
...This book demonstrates convincingly that whatever the reasons for this, the impact of unions on economic performance is not among them...
...The problem can be illustrated by Freeman's fixation with union density, the proportion of workers who are unionized...
...Apart from cursory treatment in the editors' introduction, the question of "What is competitiveness...
...The authors conclude that there is no factual basis for the claim that unions have worsened the trade deficit, harmed the performance of firms, or impeded the introduction of new technology...
...Unions have facilitated the adoption of such programs, and where they have been adopted, the presence of a union makes it more likely that the programs will be successful...
...Quite the contrary...
...The focus is not so much on the good things unions do, but the bad things they are falsely accused of...
...Cornell's Lowell Turner argues that the current WINTER • 1992 • 101 fascination with Japanese methods of management and work organization is misplaced...
...Because "unions bring [an] organized collective voice to the workplace . .. ecessary to insure the genuine participation of workers in decision making " Eaton and Voos also explain how the presence of a union makes it possible to shape "workplace innovations" in ways that avoid harm to workers and to increase workers' resulting gains...
...America's economic performance has declined relative to that of other countries, such as Germany, which have far higher rates of unionization than we do...
...On the economic and social reform front, labor's emphasis on broad issues such as health-care policy has, if anything, increased...
...they had little interest either in organizing nonunion workers or in political action around a program of economic and social reform...
...Unionized workplaces, by contrast, are more efficient than their nonunion counterparts, while providing workers with a higher degree of job security...
...Governments can no longer control their national economies, and unions can no longer take labor out of competition, because economic competition has become global...
...A unionized work force can keep management on its toes, forcing it to do its job better...
Vol. 39 • January 1992 • No. 1
