Unions and the New Administration

...The Board should also be empowered to find that, in first contracts, an employer's proposals to reduce existing wages and benefits may, in many cases, be an unfair labor practice...

...Clearly there is something missing from the facile assumption that nonunion industry is more competitive than industry in a unionized environment...

...Reform of labor law, to be consistent with a new union role in an advanced economy, should have several facets: I. INVOLVING WORKERS AND THEIR UNIONS IN LONG-TERM FIRM DECISIONS: First, the law must become biased in favor of employee and union participation in a firm's decision making...

...And we should redefine the standards of trustees' and plan managers' fiduciary responsibility so that pension fund investments can be used to insist on long-term and socially responsible perspectives for public corporations...

...Canada's economy grew at an average 4 percent rate while unionization went from 32 percent to 36 percent...

...This is a gray area, and a matter of increasingly restrictive regulatory interpretation—where to draw the line between lawful "hard bargaining" and unlawful "bad faith" bargaining...

...Although many of these option schemes were touted as enhancing executives' commitment to future performance, in practice they have permitted early exercise of options and measures to immunize executives against downturns...

...In recent decades, it has become excessively difficult for employees to achieve union representation...

...Perhaps victims of discrimination should also be permitted to recover damages in civil suits...

...Conservative economic theory would have us believe that if cross-training were profitable, market imperatives would force business to undertake it...

...The NLRB should have authority to order punitive damages, both to victims of discrimination and to unions, in the case of unfair labor practices...

...The American economy cannot return to its glory days of the 1940s, either...

...Unions also increase productivity because employee involvement in quality is greater in union plants...

...and second, giving employers somewhat greater incentive to train workers to be more flexible and have greater understanding of the overall production process...

...they found unionized firms' productivity to surpass nonunion firms' by over 20 percent...

...the Board cannot normally order the inclusion of any element in a contract...

...We now find ourselves trying to save jobs in competition with China, the Caribbean, and Mexico, by lowering our wages and living standards...

...However, this is not a constitutional but a legal issue...

...Reich has announced a commission to examine labor-law reform...

...Cross-training is expensive...

...They will likely try to enhance the likelihood that employers will make greater investments in technology and in worker training...

...To encourage greater responsibility on the part of union leaders who become involved in this broader collective bargaining, a labor-law reform agenda should revive the LaborManagement Cooperation Programs (LMCP) of the Department of Labor...

...The bill makes sense as family policy, though it is only a first step, since it makes no provision for income protection for workers who take advantage of this right, and many workers will not be able to afford it when their families are in crisis...

...There must be a speed-up in NLRB procedures...

...They often speak of a need for more high-wage manufacturing jobs, and they decry the decline in wages that manufacturing workers experienced during the Reagan-Bush years...

...Under current law, employers must "negotiate in good faith" about the terms of employment...

...Do unions thus impede economic growth, since lower profits make fewer funds available for investment...

...On the other hand, while American unions declined, our economy grew at only a 1.6 percent annual rate...

...In a reformed labor law, product quality, market strategy, and internal pricing should also be mandatory bargaining subjects...

...Reining in our excessive executive compensation levels is necessary for reasons of basic fairness, but this reform also has two important economic bases: First, it is hard to imagine how a firm with such a disparate salary distribution can inspire worker loyalty and effort, which is necessary for world-class competition...

...This decision took labor law in exactly the wrong direction...

...The National Labor Relations Board's rules for determining employee choice have, over the last fifty years, increasingly shifted the scales towards the rights of employers to discourage unionization and away from the rights of workers seeking collective bargaining...

...It is hard to computerize the workplace, for example, without expanding the realm of employee decision making and blurring the distinction between workers and supervisors...

...In the 1980s, the biggest companies raised executive pay by four times the percentage that their workers' pay went up and three times the percentage that their profits went up...

...The spectacle of workers' pension funds getting a "free ride" on stock run-ups stimulated by leveraged acquisition battles (battles that ultimately destroyed the participants' own jobs and livelihoods) symbolizes the limits of that narrow perspective...

...The list should include union security and dues check-off provisions...

...The challenge facing unionists will be how to present the case for labor law reform so that increased union membership can be shown to be consistent with initiatives like family leave or expanded worker training, rather than with featherbedding or uncompetitive wages...

...The debate around family leave offers a model for how the case for labor-law reform should be presented...

...Under present Board law, the NLRB is required to expedite investigations only of unfair labor practice charges filed against unions, that is, illegal picketing...

...Implicit in this call We welcome comments from informed readers that agree or take issue with some of the ideas expressed in this article — Ens...

...And, as a consequence of these changes, unions may have to fashion a different kind of appeal to win majority support in organizing campaigns...

...A similar proposal was also part of the 1978 congressional reforms...

...Not only do these union members not fear reprisals for suggesting reforms, but a few unions have negotiated job security guarantees in return for cooperation in implementing efficiencies...

...A first step should be changes in the NLRA to facilitate union organizing...

...It may make it more difficult to operate a business with maximum short-term efficiency, since there are essential workers whose positions need to be filled at all times...

...While its unions gained strength, Germany's economy grew at an average per capita rate of 2.4 percent a year...

...In return, the administration may be willing to endorse amendments to encourage union organization...

...Despite lower profits in union plants, pension funds make unions a net contributor to national savings...

...The largest Japanese businesses, whose high-quality products have won shares of many of our markets, make extraordinary commitments to their workers...

...Just as American business must have a 160 • DISSENT The Future of Unions longer term perspective than it had in the quick-buck eighties, so must American workers...

...To address this problem, the Labor-Management Cooperation Programs of the Department of Labor should have an expanded mandate— establishing institutes to provide union representatives with the financial skills needed to evaluate capital investment plans...

...Insistence on a "management's rights" clause that excludes worker involvement in these decisions should be defined as an unfair labor practice...

...The majority-supported Packwood amendment would have banned permanent replacements only if an employer rejected settlement recommendations made by a government "fact-finding" panel...

...Further, union demands for wage increases frequently put unionized firms at a competitive disadvantage against foreign firms with lower labor costs—especially in industries where higher wages were previously based on market power now eroded by international competition...

...Unions represent our nation's best attempt to give democratic voice to those who do the work...

...Organized plants also use more advanced technology because they have higher pay than nonunion plants...

...These data lend credibility to findings that union labor in America, in many cases, is more, not less productive than nonunion labor...

...We should require that union and joint labor-management pension funds invest a small, though meaningful, share of their assets in the firms that employ plan participants...

...Those seeking an explanation of the administration's apparently sympathetic stance toward union organizing should look more to the competitive advantages of collective bargaining than to purported political debts owed organized labor by President Clinton...

...Yet the law is significant for another reason...

...There are fewer effective or timely remedies in present law for workers who are fired or discriminated against for attempting to organize unions, and NLRB rules often permit employers to effect pretextual discrimination without penalty...

...One of the most tragic consequences of the casino atmosphere of the 1980s was that our notions of fiduciary responsibility prevented even union-controlled pension funds from defending participants' long-term interests against irresponsible shortrun profit maximizing decisions taken by corporate managers...

...If we argue, for example, that workers and unions must be involved in a firm's decision making, it becomes more difficult to preserve a union's right to use the confidential information it obtains in a "corporate campaign" that aims to destroy that firm's market share...

...Efficiency may be lost when union firms can't easily correct or fire unproductive workers, but greater efficienSPRING • 1993 • 161 The Future of Onions cies are lost in nonunion plants where poorly trained supervisors, fearing loss of loyalty, overlook absenteeism or low output of favored employees...

...Though not all Japanese workers have lifetime guarantees of employment, many of those working for Japan's largest firms are retained during sales downturns and, when permanent loss of markets makes jobs redundant, they are placed in other jobs in the firm's related companies...

...Further, even where an employer is found by the NLRB to have engaged in "bad faith" bargaining, the only remedy within the Board's power is to order that the parties resume bargaining in "good faith...

...Reasonable procedures for recognition of union bargaining rights should be instituted...

...Indeed, unions today represent a smaller share of the American work force than they did before the passage of the National Labor Relations Act (NLRA) in 1935...

...American workers' jobs were sacrificed when firms restructured in the leveraged buyout frenzy, when bankruptcy courts set aside their union contracts, when plants closed because a new location (often in a low-wage third world country) promised lower costs, or because of the recession of recent years...

...Unions, academic economists assert, generally insist on rigid work and seniority rules that prevent industry from responding flexibly to international competition...

...Resistance to the notion of giving union representatives access to the workplace to respond to employer speeches, films, or meetings has always been based on respect for employers' private property rights...

...Permanent replacements would also have been permitted if a union refused panel recommendations...

...There was a noteworthy development in the U.S...

...Workers in nonunion "quality circles" were often unwilling to speak their minds, fearing retaliation or discharge...

...metalworking and machine tool plants...

...In the 1980s, however, some unions began to promote worker involvement, including work teams and bargaining about capital investment or product design...

...Yet the Clinton administration may sponsor far-reaching reform of the nation's labor laws, attempting to establish what Labor Secretary Robert Reich has referred to as a "level playing field" between unions and management...

...This was because selfishness and profit maximization led to a corporate focus on short-term results while our international competition was forswearing immediate rewards to invest in technological advances and future market share...

...One way to accomplish this is to reconsider the provisions of ERISA, the Employee Retirement Income Security Act, which require pension fund trustees, many of whom represent union members, to adopt the same short-term profit maximization strategies that have hobbled American finance in the 1980s...

...EXPANSION OF UNION ORGANIZING RIGHTS: A second facet of labor-law reform covers the expansion of organizing rights...

...Convinced that international competition requires near total flexibility, American firms have reduced the security of our working people...

...Arbitration of contract disputes, with authority granted to representatives of the public as well as to labor and management, may be one form in which the right to strike could be modified...

...FUTURE ORIENTED THINKING BY UNION OFFICERS AND PENSION Furor) TRUSTEES: A third facet of labor-law reform includes provisions that require unions to exercise their powers with the same long-term perspective that we want to require of management...

...This includes the right of union organizers to equal time for responses to employer speeches before captive audiences on paid working time...

...capital investment now come, to an important extent, from over $2 trillion in private pension funds...

...Labor-law reform and a redefined and expanded union role, therefore, could be a central part of the Clinton administration's new economic agenda...

...This penalty is much too weak...

...American industry will never be able to call on its most valuable asset, the knowledge and experience of its workers, if those workers don't have greater job security than they do now...

...As late as 1970, 31 percent of all American and 37 percent of West German workers belonged to unions...

...A labor-law reform agenda for the 1990s cannot return unions to their glory days of the 1940s...

...Senate debate last spring about striker replacement legislation...

...In 1978 economists Charles Brown and James Medoff compared "value added" per production employee per hour for different manufacturing industries...

...membership had shrunk to 17 percent while West Germany's had grown to 43 percent...

...Labor-law reform should repeal the 1980 Yeshiva decision, in which the U.S...

...Most union organizing campaigns today are defeated in significant part by professionally prepared speeches, slide shows, and films, shown during paid working time to employees required to attend...

...Clinton has also proposed eliminating tax deductibility for excessive executive compensation, and this pledge is also tied to his emphasis on revival of long-term business thinking...

...But this, according to the new Democratic view, is myopic thinking Market forces alone have not compelled business to plan for long-term success...

...Employers must, in a contract, agree to limited rights for a union to process grievances about the terms and conditions of employment, must afford employees representation in disciplinary matters, and must agree to permit union representatives access to working areas for the purpose of investigating grievances...

...Union contracts give managers incentives to enforce work rules consistently...

...These innovations resemble the productivityenhancing "works councils" of West Germany, legally mandated (and usually union-dominated) participation structures...

...Unlike other substantive matters, the Board will require an employer to agree to these provisions because they are considered to be inherent in the union's status as the employees' exclusive representative...

...Conventional economic wisdom contends that unions hurt the competitiveness of American industry...

...The logic of reversing Yeshiva may also mean, however, that unions will have to accept increased participation of first-level supervisors and foremen in bargaining units...

...Unionism's decline encourages American business to pursue low-wage strategies...

...by small group meetings with professionally trained management consultants...

...The reasons are not hard to fathom...

...Effective remedies where employers refuse to negotiate a first contract after a successful union organizing campaign are also needed...

...Swiss growth averaged 4.6 percent, nearly triple the U.S...

...With higher wages in union plants, it is true that corporate profits are lower...

...In addition, American corporations have made work less secure by using more part-time workers or by leasing rather than hiring employees...

...This development threatens the Clinton administration's economic plans, which aim to create "high-wage, high-skill" jobs and force industry to abandon its obsession with short-run profit indicators...

...During this time, West Germany sustained a trade surplus with the United States...

...Under NLRB procedures, justice is often denied by lengthy delays, sometimes created by employer attorneys who file appeals over frivolous issues...

...With an expansion of mandatory bargaining subjects, unions may have to accept some restrictions in their right to strike...

...There must be effective remedies for unfair labor practices, and more reasonable standards of proof for unions protesting unfair labor practices...

...We can't have a new kind of union contract to promote flexible and participatory workplaces if we don't have any unions...

...and the provision of name, address, and phone lists of workers to union representatives at early stages of an organizing campaign...

...By 1987, Swiss union membership was 33 pe;cent...

...q SPRING • 1993 • 165...

...If the regional director of the NLRB finds a violation, he or she is required to seek an immediate judicial injunction...

...Employers are not required to agree to any particular proposal, no matter how reasonable, 164 • DISSENT The Future of Unions so long as the employer is willing to bargain with a union until "impasse" has been reached...

...Since then, unions' influence has waned, American workers' average earnings have dropped to $345 a week in 1990 from $388 a week in 1979 (in 1990 dollars), and American industry has lost markets to nations like Germany, which have a technological edge—in part because their workers participate in decisions that affect their firms' success, and because their employers have greater incentives to invest in the upgrading and training of workers...

...and by one-on-one "conversations" with trained consultants...

...Workers cannot be expected to make intelligent collective bargaining decisions, in which wage and benefit improvements are balanced against needs for investment in plant or technology, if those workers and their representatives are not conversant with their firms' long-term market opportunities and the technologies available for meeting them...

...It is in this context that Clinton's strong support for the family leave bill, vetoed twice by Bush, is significant...

...The necessity for such access should be obvious...

...The family leave bill restructures incentives, so that American business is required to take small steps in two directions: first, giving workers somewhat greater security so they know their jobs will not disappear after an unforeseen family emergency...

...Increasingly in the 1980s, employers took militantly regressive positions in first-contract negotiations, prepared to bargain endlessly without making concessions...

...Yet most such efforts failed: many firms adopted "quality circles" only as temporary measures to defuse worker discontent that might otherwise invite union organizing...

...Graduates could be awarded certified competencies to engage in the more sophisticated collective bargaining required in the 1990s...

...rate, and, as a result, Swiss per capita income rose to $30,000 by 1989, compared to $21,000 for the United States...

...Meanwhile, the unions are restricted to efforts by their internal volunteer committee, who may speak about the union only during nonworking time...

...They do not, because funds for U.S...

...Thus, these economists believe, unions may cause the loss of American jobs in unionized sectors...

...But we have barely begun to learn how to compete with Germany and Japan by raising our wages, investing in the skills of our work force, and gambling that we can again succeed with creativity and ingenuity...

...In the 1970s, unions organized 200,000 workers a year...

...In the 1980s, in an increasingly imbalanced legal climate, organizing success fell to less than half that...

...Unions place a high priority on negotiating pensions, so that although union members make up less than one-sixth of the work force, roughly half of private pensions are for union workers...

...There are a few exceptions to these NLRB rules...

...On the other hand, Clinton and his advisers want to rebuild a strong manufacturing sector in the United States...

...or by professional organizers spending endless time tracking down employees at their homes after work...

...At present, mandatory subjects are limited mainly to economic conditions of employment...

...As labor relations expert Charles Hecksher remarks, "What that decision says is that any employee who has the discretion to think on the job, whose job has not been reduced to mindless routine, is excluded from the framework of representation...

...SPRING • 1993 • 163 The Future of Onions • Equal access to employees and their workplaces where union election campaigns are taking place is necessary...

...In 1978 labor law reform passed the House of Representatives and gained the support of 58 Senators...

...At no time during the campaign did he even hint at interest in labor-law reform (beyond a perfunctory visit to Caterpillar picket lines and the expression of support for legislation outlawing permanent striker replacements...

...Several reforms are relevant: • We need to redefine what subjects are mandatory for bargaining...

...At present, the penalty for most unfair labor practices is only the posting of a notice by an employer stating a commitment to obey the law in the future...

...Thus, Clinton has proposed a capital gains tax cut of his own: investors who risk their savings on new businesses (which create jobs) should receive a 50 percent tax exclusion for gains on assets held more than five years...

...It was killed by a filibuster...

...The Bush administration's last budget "zero-funded" 162 • DISSENT The Future of Onions these programs...

...Democracy in the workplace is an effective way to improve productivity...

...The familiarity that public policy now has with public campaign finance laws (which also provide for certain legislated equality in access to voters) perhaps makes this concept more acceptable in a union organizing context...

...Family leave, therefore, implicitly requires businesses to cross-train workers to fill in for others on leave...

...In the 1970s, a wave of nonunion firms initiated "quality circles," attempts to mimic Japanese success in getting workers to take more responsibility...

...There are several issues to face in redressing this imbalance...

...Supreme Court ruled that faculty members at a private university were not "employees" within the meaning of the NLRA because they participated in management decision making about hiring colleagues and similar matters...

...Carnegie-Mellon economist Maryellen Kelley recently surveyed over a thousand U.S...

...A last-minute "compromise" proposal by Republican Senator Robert Packwood may have had greater significance than the striker replacement issue itself...

...Highcost labor leads firms to invest in machinery that doesn't waste workers' time...

...She found that in corporations where union and nonunion plants did the same type of work, the organized workers' average production time per unit of output was 33 percent less than nonunion workers' time...

...As a result, the average CEO at a major American corporation is now paid about a hundred times as much as the average worker, compared to ratios of twenty-three to one in Germany and seventeen to one in Japan...

...They also hesitated to suggest more efficient methods, fearing their jobs would become redundant...

...Switzerland, like the United States, had a union density of 31 percent in 1970...

...III...

...It goes something like this: In the Reagan-Bush era, America adopted the false economic theory that deregulated markets could generate prosperity for the entire nation...

...The list of provisions to which employers can be required to agree should be expanded...

...In the eighties, however, American firms have gone in the opposite direction...

...To understand how such a case can be made, we should first explore the new Democratic economic outlook...

...Labor-law reform proposals that emerge from Reich's commission will almost certainly go beyond the 1978 focus on organizing rights...

...Today, fewer than 12 percent of America's private sector workers are represented by unions, a steady decline from nearly 40 percent in the mid-1950s...

...Yet, by 1987, U.S...

...The Packwood amendment, had it been adopted, would have been the first time federal labor law imposed sanctions on an employer (or union, for that matter) for unreasonable contract demands...

...But instead of prosperity, we got declining living standards, reduced wages and family incomes, and a loss of international competitiveness...

...These data, comparing plants using similar work methods, may understate the union productivity advantage...

...President Clinton, for example, has moved beyond the sterile debate over George Bush's persistent demand for an across-the-board capitalgains tax break, by distinguishing between tax giveaways to those who speculate for quick returns on the one hand, and those, on the other, whose investments are made from a patient commitment to see new technologies bear fruit...

...Elections should be held no more than thirty days after the filing of a petition...

...Turnover is lower where workers have job security (such as seniority rights and protection against arbitrary layoff), which means more experienced and thus more efficient employees...

...In several Canadian provinces, union recognition is automatic if a majority of workers sign union authorization cards and become members of the union, where there are no provable allegations of unfair union conduct in an organizing campaign...

...In discharge cases, the penalty is only back pay, minus interim earnings...

...Although in this case the sanction was not terribly significant (permitting the hiring of temporary but not permanent striker replacements), the concept opens the door to true reform where society asserts broader interests against shortsighted management or labor behavior...

...In contrast, when charges are filed by unions against employers, it can take months before the NLRB regional director decides whether to dismiss them or issue a complaint...

...In the United States, union-sponsored worker involvement has been found to make greater contributions to productivity gains than "union-free" quality schemes...

...is a "deal": the administration apparently wants organized labor support for NLRA amendments to encourage upgrading the technology of American industry...

...These institutes should be tripartite, directed by representatives of labor, management, and academic business schools...

...And second, exorbitant executive pay schemes usually include stock-option provisions that encourage managers to focus not on the firm's longterm position but on the opportunities for stock run-up in the next several quarters...

...The law should be reformed to require the Board to find an unfair labor practice where an open and public union activist with standing (say, two years' service) is disciplined or discharged during or shortly after a union organizational campaign, unless the activist is discharged for serious misconduct...

...Analyses of particular industries have also confirmed a similar advantage...

...Several 1978 proposals addressed the issue of more serious penalties for unfair labor practices...

...If America is to establish a successful place in the new international economy, however, unions must be part of these new directions...

...They offer a sophisticated defense of many labor market interventions that unions traditionally support and that, arguably, raise labor costs—for example, family leave legislation, a requirement that firms subsidize SPRING • 1993 • 159 The Future of Onions worker education and training, and mandatory employer-provided health care...

...and years before final adjudication...

...The new law requires only about 5 percent of all employers (those with firms having at least fifty employees) to give their workers up to twelve weeks of unpaid leave to care for a sick or troubled parent or child or a newborn infant...