Labor's Social Value
RASKIN, A.H.
Labor's Social Value What Do Unions Do? By Richard B. Freeman and James L. Medoff Basic Books. 293pp. $22.95. Reviewed by A.H. Raskin Former chief labor correspondent, the New York "Times";...
...Since Freeman and Medoff end up convinced that a strong union movement is an asset of great value to a thriving market economy, they are gravely concerned at the speed with which unions are losing strength, a decline they ascribe primarily to the virulence of management hostility in recent years...
...it seems to focus exclusively on the labor-management aspects of the union function, instead of encompassing the encyclopedic scope of labor's involvement in the total society...
...That landmark predecessor study was Labor and the American Community by Derek C. Bok and John T. Dunlop, published in 1970 under the auspices of the Rockefeller Brothers Fund...
...Where employers bring in antiunion consultants—labor calls them "hired guns in pinstripe suits"—unions win only one election out of four, according to a study the book cites...
...Our analysis has shown that unionism does three things to efficiency: on the monopoly side, it reduces employment in the organized sector...
...It has been nearly a decade and a half since any comparably comprehensive attempt has been made in academe to assess the impact of unionism on the country's industrial, social and political fabric...
...To help reverse a decline they consider bad for the entire society, they favor legal changes, along the lines of the labor reform law that was killed in the Senate in 1978 through the lobbying effectiveness of a united front of industry...
...In a well-functioning labor market, there should be a sufficient number of union and of nonunion firms to offer alternative work environments to workers, innovation in workplace rules, and competition in the market...
...Through management-labor cooperation, this aims to advance the quality of worklife by giving workers a bigger say in problem-solving and gain-sharing in the factory or office...
...Whenever there is a close call, they tend to come down in favor of unionism, and occasionally conclusions are based on the flimsiest of supporting data...
...This conclusion contradicts the traditional monopoly interpretation of what unions do to efficiency...
...More important, in the formulation of public policy affecting labor-management relations, the new material should help lift the debate out of the morass of emotion-laden hyperbole and cant that it usually wallows in...
...The other is what the authors choose to label a "collective voice/institutional response" face, associated with unions serving as articulators of workers' needs and grievances in the shop or office, and as their representatives in remedying wrongs and promoting more harmonious relationships...
...A whole series of studies tends to support their thesis that unions win more than half the Labor Board elections where management stays neutral, but do poorly where the boss engages in a vigorous presentation of his reasons for opposing unionization or has his lawyers filibuster or pettifog before the Board to delay the balloting for many months...
...We also think that 100 per cent (or virtually 100 per cent) unionization would be economically undesirable for the United States...
...I agree that changes in the labor law are necessary...
...This is not to say that Freeman and Medoff invariably emerge as totally detached in their evaluation of the evidence...
...They blame it almost entirely on the sharp jump in the wage advantage union workers gained over nonunion workers in the second half of the 1970s, before the era of givebacks began...
...These benefits are customarily obscured from public recognition by the frequency of management complaints that labor is the principal villain in destroying America' s competitiveness in world markets...
...This is an excellent prescription...
...The authors believe that, in the absence of any shift in current attitudes, the next decade may witness a drop in the union share to something in the neighborhood ",f one worker in every 10, a dismayingly puny ratio...
...I find this much too elementary an explanation...
...This book by two Harvard economists is a powerful argument in the opposite direction, a vigorous and ably documented defense of unionism as a positive force in the American economy and a promoter of sound social values...
...These have been times of trouble for organized labor, and much of what one reads or encounters makes it easy to conclude that a large part of the trouble stems from labor's own selfishness and shortcomings...
...One is a "monopoly" face, associated with organized labor's ability to push up wages, enforce restrictive work rules, and even conspire with employers to freeze out competition and raise prices to artificially high levels...
...If anything, the anti-union aggressiveness of many elements in industry has grown in the last two or three years of sharp subsidence in the rate of union wage improvement...
...For many years labor leaders have put excessive reliance on employers to do their organizing for them through union shop contracts and other phases of pushbutton unionism...
...That descriptive more accurately conveys what Lane Kirkland was talking about in his keynote address at the last AFL-CIO convention: "Hardly a sparrow falls, here or abroad, that we do not take within the jurisdiction of the trade union movement...
...But such flaws are more than offset by the masterly way Freeman and Medoff have marshaled eye-opening calculations on the benefits industry and the nation derive from unionism in heightened efficiency and more equitable distribution of income...
...The sluggishness of labor's own organizing efforts and the draining of its old missionary spirit is, of course, one factor in the conviction of many employers that unions are ripe for the taking...
...on the voice/ response side, it permits labor to create, at no extra cost to management, workplace practices and compensation packages more valuable to workers, and in many settings it is associated with increased productivity...
...The authors' statistics indicate that the severity of management opposition to a union organizing campaign determines whether unions win or lose elections...
...When firings for union activity were stacked up against the number of workers who voted union in National Labor Relations Board elections in 1980, the ratio was one out of20—a significant deterrent to unionization in a period of acute job scarcity and steadily diminishing governmental appetite for enforcing the weak sanctions and safeguards provided by the labor laws...
...The differential for union workers rose to 30 per cent in the last five years of that inflationary decade, as against a 19 per cent differential in the 10 years from 1965-75...
...Such competition will, on the one hand, limit union monopoly power and, on the other, limit management's power over workers...
...That is particularly true of the comments about union democracy and the sentiments of workers toward their organizations...
...The distinctive contribution of the Freeman-Medoff analysis is its tapping a treasure trove of statistical data on the quantitative effects of collective bargaining and union practices that did not exist when Bok and Dunlop were drawing up their balance sheet...
...For readers to whom greater equalization of incomes is undesirable, what unions do is definitely bad...
...SOCIAL ORGANIZATION...
...co-author, "David Dubinsky: A Life With Labor" Americans who grew up believing that a vital, vibrant labor movement is indispensable to a healthy democracy have found little in recent press reports or economic literature to reinforce their faith...
...For readers to whom greater economic equality is a plus, what unions do here is definitely good...
...Given how meticulous the authors are in their efforts to appraise the pluses and minuses in every component of their complex equation, it is impossible in a capsulized review to convey adequately their many sophisticated and illuminating findings...
...Our analysis of the internal affairs of unions has dispelled some of the negative myths about undemocratic practices and discriminatory and corrupt behavior...
...One of the key tables presented in this area is based on the responses of blue-collar unionists in two studies conducted by the University of Michigan's Survey Research Center over 10 years ago, each involving fewer than 300 workers...
...My own feeling is that the title chosen for the second face is too limited...
...But I think the best hope for a turnaround that would contain within it the seeds of union growth and an expanding economy lies in an expansion of the movement already well under way in some of the country's key industries...
...The sum of the factual information the authors have extracted from their own research and that of other social scientists provides impressive support for many of their judgments...
...Union members did much better than the rest of the work force in keeping up with rising living costs—and this was no less the case for those who did not have escalator clauses in their contracts than for those with automatic pay boosters...
...The range of that involvement—locally, nationally and globally—is amply recognized in the book itself, so I regret that the authors did not call the second side of unionism its "social" face...
...It wound up with similarly affirmative findings about labor's role in advancing fairness in the workplace and in representing the interests of workers and the disadvantaged in the political arena...
...In substantial measure, the foundation of this book is the authors' essay in the Fall 1979 issue of the Public Interest, "The Two Faces of Unionism...
...Here is their own summary of what these findings add up to: "EFFICIENCY...
...It would, in my judgment, have a better chance of adoption if the authors had been as rigorous in attempting to determine the sources of the rekindled management animosity to unionism as they were in documenting its existence...
...Up to now most unions have dragged their heels on such steps toward more employee participation, leaving to management an initiative that has always seemed to me at the very heart of what unionism is all about...
...Arguments over names aside, the important thing Freeman and Medoff have done—and done superbly well—is devise a scale for weighing the economic and social cost of labor's monopoly, as reflected in reductions in productivity and distortions in income distribution, against society' s gain from labor's voice I response, in the form of reducing employee turnover, curbing management arbitrariness in promoting and laying off workers, and improving morale and cooperation among workers...
...On the question of distribution, we have found a definite dominance for the voice/response face of unions, with unions reducing wage inequality and lowering profits, which generally go to higher- income persons...
...Although it is difficult to sum up these three effects, our evidence suggests that unionism on net probably raises social efficiency, and if it lowers it, it does so by minuscule amounts except in rare circumstances...
...The union share of the work force has shrunk from roughly one-third at the time of the AFL-CIO merger in 1955 to a current level of less than one-fifth...
...They note that charges of unfair labor practices filed against employers increased fourfold from 1960-80, charges of workers being fired for union action tripled, and the number of workers ordered reinstated or awarded back pay for illegal discharges went up by 500 per cent...
...This is the face that makes ludicrous most of the charges in the current Presidential campaign depicting labor as a " special interest" indistinguishable from the boodle boys of industry...
...DISTRIBUTION OF INCOME...
...Because our research shows that unions do much social good, we believe the 'union-free' economy desired by some business groups would be a disaster for the country," say Freeman and Medoff...
...It has shown that unions, for the most part, provide political voice to all labor and that they are more effective in pushing general social legislation than in bringing about special interest legislation in the Congress...
Vol. 67 • May 1984 • No. 9
