Unions Forever?

A new vision for America's workers

Virginia Postrel from the May 1998 issue

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This notion of employees as homoge-neous mush carries over into unions' view of industry. Nowadays, union leaders like to draw damning comparisons to Japanese companies with lifetime employment and greater equality between management's and labor's pay. But U.S. unions eschew the company identification that makes that system work. They do not want workers at competing companies to see themselves as competitors rather than brother unionists.

Hence the zeal for pattern bargaining, which establishes a floor for wages and other contract terms. Under pattern bargaining, neither a company's conditions nor the skill of its workers is as important as the industry to which the union has assigned it.

Caterpillar, which makes mostly construction equipment and exports 60 percent of its output, is arguably not in the same industry as Deere, which concentrates on farm implements and sells mostly domestically. Breaking the pattern is far more important to the company's future flexibility than any specific dispute over wages and benefits. And what better time to make such a demand than in the midst of a recession that shoved Caterpillar $404 million into the red last year and pushed local unemployment to 9 percent?

Fortunately for Caterpillar workers, they are not the same as either workers off the street or Deere employees. They are highly skilled both in their trades and in their specific knowledge of Caterpillar's production. And they are well paid. In this eyeball-to-eyeball confrontation, a federal mediator made both sides blink.

American unions face a choice. On it depends their future.

They can continue to pursue their current course, taking their old-fashioned ideology to the only workplaces where it still applies--the monopoly shops owned and operated by government. Or they can reinvent unions as organizations that primarily serve workers rather than fight management.

The first is the road to short-term gains and long-term disaster. Public-employee unions have it easy at the bargaining table. Their opponents are politicians who can collect from the "customers" whatever the union demands; taxpayers, unlike car buyers, have no choice. Already, the NEA has displaced the Teamsters as the nation's largest union. The American Federation of State, County, and Municipal Employees is number four, surpassing the autoworkers.

But this strategy casts union members not as the hard-working salt of the earth but as another special interest group ripping off the taxpayers, most of whom also work for a living. It will create both a tax revolt and a backlash that will taint all of organized labor.

And, as the air traffic controllers can testify, it is a lot easier for a resolute politician to fire a bunch of highly paid public employees, and to survive the dislocations of retraining a whole new work force, than it is for a company manager to clear the assembly lines. The government employer faces no competitors with well-trained workers, the public is more sympathetic to management that represents taxpayers, and plenty of replacements will cross the picket lines.

Rather than commit suicide this way, unions can adopt an entrepreneurial vision. Instead of treating workers as indistinguishable factory drones, they can offer them skills that will command both respect and high wages. That means getting into the training business--a business companies often neglect for fear of investing in workers who will then move on to other jobs. As umbrella organizations supported by dues, unions wouldn't face that disincentive.

And "training" does not necessarily mean "retraining." It means continuous improvement of employed workers. It means helping people keep up with new technologies, new equipment, new quality techniques. And, given the state of American education, it means reading, writing, and arithmetic--and English lessons for the foreign born.

In a working world where upward mobility often depends on literal mobility, national unions can offer other services to their members: portable benefits tied to the person rather than the job; a national "hiring hall," a computerized listing of job openings; loans to pay for relocation; a community in a new town. The list is limited only by worker needs and union creativity. The point is to invest in workers and to help workers collectively invest in themselves, to make union workers especially valuable to employers and unions especially valuable to employees.

Achieving such a vision requires a fundamental change in the way unions see themselves. Such change is difficult--far harder than picking political fights. But the alternative is an ignominious death.