Unions Fall Victim to New Economics
Nicklaus, David, St Louis Post-Dispatch (MO)
Despite all the upbeat speeches you may hear this Labor Day weekend, the union movement doesn't have much good news to talk about.
Workers are locked in bitter battles at companies like Caterpillar, A.E. Staley and Bridgestone Firestone, with little hope of winning those battles anytime soon. Congress has rejected legislation to ban strike replacements. And attrition continues to be organized labor's worst enemy, with layoffs taking a heavy toll in many unionized industries.
The news will only get worse, one leading academic expert says.
Leo Troy, a professor of economics at Rutgers University in Newark, N.J., says the traditional American union has been undone by technology, affluence and market forces.
Technology has meant that professional work, such as computer programming, has replaced production work in traditional manufacturing industries. An affluent society has priced some labor-intensive industries out of the United States, while creating demand for a bigger service sector that has proven hard to unionize.
And competition, whether it's from foreign countries or from non-union companies in this country, tends to be harsh on unions, which after all are a form of monopoly. The union has a monopoly on the supply of workers with the skills and training that meet a particular firm's needs; in theory, that monopoly counteracts the monopsony (single-buyer) power of the workers' employer.
The effects of competition can be seen most easily in an industry like trucking, where the Teamsters have lost hundreds of thousands of members since deregulation. Autos, where the strength of Japanese manufacturers in the past 20 years provided competition that wasn't there before, are another good example.
"Competition engages and attacks any form of noncompetitive behavior, irrespective of its source - business, union or government," Troy wrote in a paper just published by Washington University's Center for the Study of American Business.
Just looking at unions' total membership gives one a misleadingly optimistic picture, Troy believes. He prefers to distinguish between old, private-sector unionism, and new, public-employee unionism. …