July 29, 2005

U.S. Labor Split.  The past few decades have been rough for organized labor in the United States.  The portion of the U.S. labor force that belongs to unions has been steadily decreasing while the publics’ perception of unions has also continually fallen.  In addition, despite spending hundreds of millions of dollars in political contribution unions haven’t been able to get any of their major legislative initiative through Washington.

In reaction to these massive failings some unions are calling for drastic changes in the way organized labor is run.  These feelings reached a high point earlier this week at the annual convention of the AFL-CIO.  The Teamsters and SEIU voted to leave the AFL-CIO and more, smaller unions might follow.  John Sweeny, the President of AFL-CIO is in a danger of presiding over the collapse of America’s largest union.

Organized labor can go in one of two directions:  more quickly down its current path to mediocrity or down a very different path.  The first option has been well laid out by the press:  decline in manufacturing employment, slow growth in government jobs, failure to organize new workers, etc.

On the other hand, organized labor may use this opportunity to redirect its efforts and rise from the ashes as a more effective organization. 

First, unions have to change the public’s perception of unions.  Many Americans see unions a little more than corrupt, political entities, which protect lazy and inefficient workers.  Organized labor heavy handed political tactics in Presidential elections have not helped this perception.  Some argue that union members would be far better served if their leadership offered endorsements in a more bi-partisan manner.  In addition, most economist argue that organized labor should realize that free trade benefits workers in that it allows them to buy goods and services more cheaply and thus allows their paychecks to go further.  One of the major debates in the split up of the AFL-CIO centered on the issue that dissidents wanted unions to spend fewer resources on politics and more on workers.

Second, by focusing on workers, unions could do things such as sponsoring worker training and retraining programs.  This would signal that unions are forward looking and there to help workers compete in the global economy.  In addition, unions could focus on workers outside of the United States.  Surely there are workers interested in joining entities that will work to protect their rights in Asia and Latin America.

Third, some within organized labor argue that unions might want to move beyond traditional blue collar workers and think about organizing “new economy” workers including groups like financial analysts, IT workers and engineers.  Traditionally organized labor has done very little to organize such workers.  Yet, union organize argue, these are groups who are clearly not being paid their marginal value product.

So we shall see what the future will bring:  will organize labor use this unique crisis to right itself and emerge as a more influential entity, or is this organized labors last gasp of breath.  Either way it will be interesting to watch.