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Personal Finance
Are labor unions dead?
August 30, 2001: 4:51 p.m. ET

Slowing economy and layoff concerns give U.S. workers reason to rally
By Staff Writer Shelly K. Schwartz
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NEW YORK (CNNfn) - Few would dispute the pivotal role labor unions have played in shaping the American work force.

Indeed, the movement born of the industrial revolution was a force to be reckoned with in the 20th century, a political powerhouse that could twist the arm of industry and alter the outcome of elections.

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With picket signs at the ready, union workers raised the bar for better benefits and fair pay through some of the most turbulent decades in our nation's history – those marked by economic depression, unemployment, and war.

But that was another time.

Today, the voice of organized labor has grown weak as membership wanes. White-collar jobs, including high-technology and professional posts, have long since outpaced growth in the manufacturing sector, from which unions once drew their strength.

And as a result, less than 10 percent of U.S. workers in the private sector are now unionized, compared with nearly a third in the 1950s – the heyday of collective bargaining.

 "A lot of old line union businesses, like steel, are declining and organizing efforts to form new unions have been unsuccessful at adding enough new members to offset the loss of old ones," said Thomas Hyclak, a labor market specialist and chairman of the economics department for Lehigh University. "I don't think we'll ever return to the kind of situation we had perhaps in the late 1950s and early 1960s when trade union activity was a major driving force for the entire economy."

The new world order, it might seem, has no place for unions.

A new beginning?

But there are those who see light at the end of the tunnel.

Some segments of the labor market, which historically have been non-union, are showing signs of life as potential membership pools, including health care and technology. The slowing economy, they say, so long as it steers clear of a full-blown recession, also could provide just the catalyst union organizers crave – job market insecurity.

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"With a weakening economy, organized labor will most likely not only step up their organizing efforts in sectors that are already unionized, but we may also see a bigger surge in activity where, historically, unions have not been present – banks and insurance and technology companies," said Lawrence Lorber, a partner at Proskauer Rose and former deputy assistant labor secretary for President Gerald Ford.

He adds: "If people are uncertain, that is when unions get the best opportunity to make their presence felt."

Recent organizing initiatives from old-line industries and new professional fields bear that theory out.

- Some 20,000 flight attendants for Delta Air Lines petitioned Wednesday to join the Association of Flight Attendants. Delta, the nation's third-largest airline, is the only major U.S. carrier without a flight attendants' union.

- Earlier this month, the engineers union at Boeing Co. began a campaign to enlist 5,000 workers on military projects including the F-15, F-18 and Joint Strike Fighter programs in St. Louis.  The Society of Professional Engineering Employees in Aerospace (SPEEA) shut down the aerospace giant's commercial jet production during a 40-day strike last year.

- Nurses in Kansas City hospitals are mounting unionizing efforts this summer to combat burnout and burgeoning work loads, following the example of the American Medical Association, which vote in 1999 to form a collective bargaining unit for salaried doctors employed by managed-care companies.  

- Auto workers at a Nissan Motor Co. assembly plant in Tennessee this month petitioned for a vote over whether to join the United Auto Workers union.

- Dot.com workers, including those at Amazon.com, are beginning to discuss unionization, according to the AFL-CIO.

- And finally, Cingular Wirless workers in Illinois won a union last fall; while the communication workers union is helping Verizon's wireless employees form a collective bargaining unit of their own.

In all, some 400,000 workers organized unions last year, down from 600,000 in 1999, and comparable to the 425,000 who formed unions in 1998.

"Uncertain times are the best shot unions have to try and increase their organizing efforts in the private sector," Lorber said. "The real question is, ' Are they going to be successful?'"

The replacements

No one knows for sure, but AFL-CIO President John J. Sweeney is doing his best to capitalize on renewed union interest – casting a wider net in his recruitment campaigns. It appears to be having a modest effect.

The Bureau of Labor Statistics reports membership is growing fastest among women, minorities and white collar professionals – a previously untapped demographic for union organizers.

According to a study by Cornell University, 55 percent of workers who won their union through an NLRB election last year were women, and 27 percent were women of color. Membership increased by 152,000 among women and by 58,000 among professionals.

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Where to now?

Despite the 30-year slide in union membership numbers, there are some sectors of the economy in which organized labor maintains its clout. Among them: the automotive, airline and public sectors.

At the same time, high-profile strikes that ended in union success – including the 87-day strike at General Motors' truck plant in 1997 and a 15-day Teamster strike at United Parcel Service that same year – gave unions some much-needed fire power.  But Hyclak stressed those do not necessarily suggest renewed vigor for union activity across all industries.

"These are cases where the impact is localized with specific employers or geographic regions of the country," Hyclak said.

Going forward, experts say, union membership will likely ebb and flow with economic trends. As job security dips and unemployment climbs, as is presently the case, the voice of organized labor should grow stronger.

"The economy right now is not in bad shape. Unemployment is rising but it's still low by post-1970 standards," said Greg Tarpinian, executive director of the Labor Research Association in New York. "Outside of manufacturing, particularly in certain service industries, conditions are ripe for organizing."

He warns, however, that should the economic downturn fall too far, any inroads union organizers have made toward recruiting new members could be lost.

"All things being equal, if the labor market slackens than bargaining power tends to be reduced," he said. "There's the threat of unemployment and workers begin to put a premium on keeping their jobs."

-- Reuters contributed to this report. graphic

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.