The New York Times
Wednesday 27 June 2007
In the spring of 1949, the men who ran the steelworkers' union decided to pick a fight over health insurance and pensions.
The Supreme Court had issued an order in April of that year giving labor unions the right to negotiate over pensions, just as they could negotiate over wages and work rules. Three weeks later, the United Steelworkers union said it was ready to strike if steel companies did not agree to new contracts.
At first, steel executives put up a united front. They agreed to contribute some money to pensions, as well as health insurance, but not nearly as much as the workers were demanding. "The truth of the matter is that American industry alone cannot afford to pay the cost of adequate insurance and pension programs for employees," Irving S. Olds, the chairman of United States Steel, said in a speech in Erie, Pa.
President Harry S. Truman persuaded the union to delay the strike three times, but on the first day of October - in a move that is hard to imagine today - 500,000 steelworkers walked off the job. The Ford Motor Company soon had to announce that it would shut down production by Nov. 15 because of a lack of steel. General Motors, Chrysler and other big manufacturers found themselves in a similar position.
And just like that, the steel industry caved. One by one, steel companies began agreeing in early November to much of what the union had demanded: annual pensions of at least $10,000 (in today's dollars) for any retiree with 25 years or more on the job, as well as health insurance for workers.
The strike proved to be a turning point for health benefits and pensions. They had existed in limited form for decades, but the new steel contracts helped lay the groundwork for the modern system of workplace benefits.
I was inspired to look into this bit of history by the run-up to yesterday's Senate vote on a union organizing bill. For years, union leaders have been pushing for a law that would make it easier for them to organize new members, and with the Democrats back in control of Congress, the House passed such a bill in March.
The measure would have increased the penalties against companies that used illegal tactics to keep out unions, and it would have forced arbitration on companies that failed to reach a contract with a new union. Most important, it would have made it easier for a union to be certified. If more than half of the employees at a work site signed cards saying they wanted a union, they would get one. They would no longer have to go through an up-or-down secret ballot election as well.
This last item is the one that the bill's critics - business lobbyists, the Bush administration, Republican leaders in Congress - have focused on. Without the secret ballot, they say, pro-union workers will intimidate others into signing cards.
Cleverly, the critics have been passing out a letter that George Miller, a California Democrat who sponsored the bill, wrote in 2001 about a labor dispute in Mexico: "The secret ballot is absolutely necessary in order to ensure that workers are not intimidated into voting for a union they might not otherwise choose," it said.
I think it's pretty clear that the bill's opponents have the stronger argument here. In the best of worlds, secret ballots are simply fairer. And yesterday, the bill effectively died, when only 51 senators - every Democrat in attendance plus Arlen Specter, a Pennsylvania Republican - voted to cut off debate and move the bill forward. Sixty votes are needed to do so in the Senate, permitting the opponents to claim victory.
"The current system has been working well for a long time," Jason Straczewski, a lobbyist at the National Association of Manufacturers, told me.
That, of course, is a much broader argument than the one about secret ballots. It is also a much weaker argument. The fact is, a lot of Americans don't think the economy is working well enough right now. Fewer than half believe that their children will enjoy better living standards than they do, polls show. Over the course of the last 30 years, wages for most workers have grown significantly faster than inflation only once: during the bubbly economy of the late '90s.
Thanks to a large body of economic research, we can get a sense for how much the decline of unions has to do with these larger economic trends. Unions, the research has shown, do not do much to affect the overall performance of the economy, one way or the other. "Do unions raise or reduce productivity," Richard B. Freeman, a Harvard economist, asked in his recent book, "America Works," an excellent overview of the labor market. "The evidence is clear: they do not."
But if they don't change the size of the economic pie, they do influence how it's divvied up. All else equal, a union worker makes about 15 percent more per hour than a nonunion worker and also gets better benefits. So while there are many reasons inequality has increased over the last three decades - like technology and global trade - the decline of unions is certainly one of them.
Since 1980, as union membership has dropped sharply, the share of economic output going to corporate profits has more than doubled. The share going to workers' compensation, meanwhile, fell to a 41-year low last year.
Yet it can still be tempting to think of labor unions as an antagonistic relic of an industrial economy - and to forget about their lingering impact. I did exactly this in a column a few months back, when I suggested that the wage freeze of World War II was responsible for the rise of pensions and health insurance. The wage freeze indeed played a role, but, as a reader, John Hoerr, pointed out to me, unions still had to force the issue. World War II had been over for more than four years when the steelworkers went on strike.
Over the last generation, companies have become far more aggressive about keeping out unions. They have required workers to attend antiunion talks, darkly warned that unions lead to lower pay and lost jobs and, as Wal-Mart Stores has done, sometimes closed entire departments or stores in the wake of unionization drives. In short, companies have been unwilling to let workers make a decision on the merits.
Traditional unions, of course, haven't exactly distinguished themselves lately. (I'm in one and can attest to their shortcomings. Filing a health claim sometimes resembles a journey through Wonderland.) As Mr. Freeman argues, the future may lie with nimbler, less confrontational groups, like the worker committees in Australia, Canada, England and elsewhere.
The problem with the Senate bill was that it tried to solve one problem by creating another. But its larger aim - cracking down on antiunion attacks - makes a lot of sense. The playing field between companies and workers is not level today, and the results are plain to see.
It is no coincidence that the very things the steelworkers demanded in 1949 - on-the-job pensions and health insurance - are slowly going the way of labor unions.
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