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A version of this article appeared as a guest editorial in the August 21, 1997 Investor’s Business Daily.
Big Labor has swallowed a big dose of Geritol to reinvigorate its tired and aging image. For months to come, Teamsters’ leaders will use their settlement with United Parcel Service (UPS) as a rallying cry. But this settlement is not the magic potion that can restore what Big Labor has lost.
Ever since President Reagan fired thousands of unionized air traffic controllers for an illegal job action in 1981, union leaders have been grasping for a symbolic victory to convince the public that organized labor is reversing its decline. Symbolism is important to unions’ institutional standing, but it can not overcome the reality of employment trends. Forty years of data suggest the de-unionization of America is irreversible.
Union membership peaked at 34.7% of the workforce in 1954 and has declined steadily since then. In 1978, there were about 20.7 million private sector union members. Today, that number has slipped to 10 million workers, or about 10% of the workforce.
Public sector unions, not subject to market competition, have bucked the downtrend so far, but even they seem to have peaked at 37.6% of public sector employees. The threat of privatizing public services and government spending restraint have limited public sector union growth, and may yet reverse it.
Some analysts estimate that private sector union membership could sink to as low as three to seven percent of the workforce before leveling out. Meanwhile, the forces that helped bring unions down continue to grow in strength. To name a few:
Global competition and corporate relocation to other countries have moved jobs to lower-cost, less unionized workforces.
Deregulation in traditional union stronghold industries such as trucking, railroads, and airlines has spawned new, nonunion firms.
The rapidly expanding contingent workforce of temporary and part-time workers has proven difficult for unions to organize.
The economic shift from manufacturing to service industries puts most employment growth in traditionally nonunion jobs and in new, difficult-to-organize, white collar and technical occupations.
These trends will not abate because of one labor dispute and the overblown rhetoric of Teamster President Ron Carey, who declared the UPS agreement a "historic turning point for working people in this country."
Carey is exaggerating the effect of the UPS strike (perhaps to solidify his own troubled position in the union). Here is what happened. The Teamsters selected a vulnerable target in a favorable environment and created substantial public support for strikers. Drawing a "line in the sand" against a healthy and successful company with a near monopoly in the package delivery industry proved to be a clever choice.
Bargaining for its single nationwide unit of 185,000 employees enabled the Teamsters to maintain strike solidarity by monopolistically controlling UPS’ labor supply. The Teamsters’ public relations machine was well oiled for the fight and it outmaneuvered UPS at every turn.
UPS revealed its weaknesses during the strike’s first week when it appealed for government intervention to buy the company some time. This indicated that the company was unprepared for the strike and had failed to calculate its likelihood.
As time lagged with no significant break in the union’s solidarity, and with little apparent strategy to win the strike, UPS capitulated last Monday to halt the massive cash drain, loss of market share, and alienation of its loyal workers.
Why is this rather peculiar labor dispute not a "historic turning point for working people?" It is not even that great a victory for UPS workers. The settlement undoubtedly means that UPS will lose some market share and pay a higher price for labor. Together, this makes it likely that thousands of UPS jobs will be lost and fewer new ones will be created by the firm. It will take most workers a year or more under the new contract before they recoup wages they lost during the strike. Those who keep their jobs at the weakened UPS will continue to subsidize the Teamsters’ scandal-marred pension plan instead of contributing to a healthier one of their own. And of course, don’t expect Carey to cut union dues or start complying with federal law that requires him to give refunds to members who object to how the union spends dues money on politics.
The Teamsters’ victory over UPS may offer some short term gains. But Big Labor’s influence will continue to wane because it is losing membership share as the economy expands. The personal decision to join or support a union is based on a worker’s unique needs, experiences, and opportunities. Times have changed. And no amount of hoopla over the UPS strike will inspire a new wave of unionization.
Robert P. Hunter is a former member of the National Labor Relations Board and the director of labor policy for the Mackinac Center for Public Policy in Midland, Michigan. More information on labor law and worker rights is available on the World Wide Web at www.mackinac.org.
The Mackinac Center for Public Policy is a nonprofit research and educational institute that advances the principles of free markets and limited government. Through our research and education programs, we challenge government overreach and advocate for a free-market approach to public policy that frees people to realize their potential and dreams.
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