Macroeconomic Danger Seen in Declining Labor Force

Article excerpt

George P. Shultz, who was secretary of state in the Reagan administration, is concerned about the possible harm to American industry and society stemming from the declining American labor movement.

Now the recession is further weakening the trade union movement, as always happens in slumps, with layoffs and employers' demands for givebacks undermining the bargaining power and organizing appeal of the unions.

"I go back to the old days in industrial relations," Shultz, who started his career as an economist and labor-management arbitrator, told the National Planning Association. "And I think of two things that have come through to me as lessons."

The first, he said, is that in "a healthy workplace, it is very important that there be some system of checks and balances." As an economist, he recognizes that the labor market itself produces checks and balances, as workers compete for jobs and management competes for labor.

But in a society in which individual strength depends on organizational connections, he thought there was still need for the checks and balances that derive from "what used to be called the system of industrial jurisprudence."

This covered the entire process of dispute settlement through collective bargaining, grievance procedures, mediation and arbitration, with the right to strike as a last resort.

The second lesson, Shultz said, is that "free societies and free trade unions go together." It is no accident, he said, that the first thing a dictator does is to get rid of the free trade unions, if there are

"And it's not an accident," he added, "that a lot of the fire for what happened in Eastern European countries came out of a trade union, Solidarity."

Societies that lack the kind of organization that will "really get up on its hind legs and fight about freedom" are missing something.

He noted that in the American private business sector, trade union membership was down to 12 percent of the labor force. Only 10.2 million workers of 84.6 million employed by private businesses now are members of unions.

Government unions now have 6.5 million members of 17.8 million employed by federal, state and local government; that is 36.5 percent of public employment compared with 12.1 percent of private employment.

Total private and public union membership in this country is down to 16.1 percent of employment from 34 percent in 1957 and 24 percent in 1973.

Concern about the shrinking size and role of organized labor in the private sector was striking, coming from a man who has not only held the top positions at State, Treasury, Labor and the Office of Management and Budget in Republican administrations, but also has been president of the Bechtel Group Inc. …