Commentary Magazine


The Obsolescent Unions

American Unionism, thirty years after the New Deal, is in the grip of two contradictory developments. One of these is a new surge of social and economic inventiveness in adapting collective bargaining to the dizzying requirements of rapid technological change. The other is a conjunction of challenges so inimical in their total effect to the traditional structure of our unions, that they presage nothing less than the eventual disappearance of unions as we know them. The historians of American institutions may record this as a period in which the labor movement was innovating itself into the grave.

On the face of it, labor has never seemed stronger—nor more likely to stay strong. Total membership, to take the most obvious measure, is as high as it has ever been, maintaining a level of slightly over 18 million in most of the period since World War II. True, membership is not growing; and the increase in the number of civilian workers—now exceeding 70 million—has reduced the unions’ percentage of the total labor force. Nevertheless, inroads into union strength made by technological innovation in such fields as mining and manufacturing have thus far been counterbalanced by sufficient expansion in other fields to keep the numerical level from going down.

The reserves in employee pension and welfare funds are increasing by $5 billion a year, and unions are still showing a high degree of ingenuity in broadening the range of fringe benefits. Thirty thousand workers in the two biggest can companies, for example, are now assured of three months of paid vacation every five years, in addition to their regular annual rest periods. Short-week benefits in auto and steel have put a more dependable floor under weekly earnings. Supplemental unemployment payments have helped bolster yearly earnings. The unions’ own treasuries and strike funds are at record levels—a prosperity attested to by the glittering new headquarters that internationals and their locals are putting up in Washington, New York, and every other large city.

Then, too, there is the notable development of joint labor-management committees meeting all year round to look for solutions to the complicated manpower problems created by all the new technological advances. Such committees now function in industries—steel, automobiles, rubber, electrical manufacturing, meatpacking, construction, coal, and others—where once the idea of cooperative decision-making would have been anathema.

It is still too early to judge the effectiveness of this kind of experimentation, but certain useful devices have already been hit on for giving workers a stake in increased productivity and thus encouraging them to welcome change, instead of fighting it. The progress-sharing formula developed by the Kaiser Steel Corporation and the United Steelworkers of America is one such device. Through it the union’s members at the Kaiser mill in Fontana, California, get a monthly bonus equal to roughly one-third of all the savings in production costs that accrue to the company from automation, economies in materials and supplies, higher individual productivity, or any other factor. The workers also are guaranteed that no one at Fontana will lose his job as a result of the introduction of more efficient machinery; any shrinkage in total manpower needs will be handled through normal attrition—retirements, deaths, and voluntary quittings.

Finally, to round off the picture of labor’s apparent vigor, there is its firmly established cachet. Three times within the last few months, President Kennedy has invited twenty or thirty top unionists to the White House for lunch. Few state dinners are given without several labor leaders and their wives mingling with the ambassadors, Cabinet officers, and other dignitaries. Arthur J. Goldberg, only two-and-a-half years ago special counsel to the AFL-CIO, has already moved from Secretary of Labor to Associate Justice of the Supreme Court. Labor is represented on almost every advisory or administrative body created by the President—whether to evaluate foreign aid, to foster culture, or to operate communications satellites in space. Labor-endorsed candidates hold positions of prominence in Congress, in state capitols, and in city halls across the country.

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For all this, however, labor organization in the United States—at least in its present form—is being hurled inexorably into obsolescence. The nature of work is changing; the frustrations of work are changing; the need for work is changing. Out of these changes comes the ironic likelihood that in a period when unions are turning most of their attention to easing the impact of automation on their members, the labor movement itself may become technology’s most spectacular victim. For, despite all its accomplishments and its very solid acceptance as a fact of American life, the present situation, not only of the work force but of foreign and domestic trade and of public attitudes toward strikes and wage policies, is one in which all roads seem to lead downhill for unionism. Whether labor pursues policies that can be called “responsible,” or ones that are “irresponsible,” the outlook is pretty much the same: a withering of union strength and influence. The process will be neither swift nor dramatic, but unless the labor movement can arrive at a drastic reassessment of its function, it appears inevitable.

The first and simplest problem facing the unions is the erosion of membership resulting from automation and other technological advances in their traditional strongholds—factories, coal mines, and railroads. With the American miner now able to dig seven times as much coal as his European counterpart, the number of men in our mechanized mines has gone down from 700,000 to 150,000; it takes only 700,000 workers to run a railway network that once gave jobs to nearly three times that many; manufacturing employed a million fewer production workers last year than it did a half-dozen years earlier, yet turned out 20 per cent more goods. In 1947 more than half the country’s workers were engaged in production; today service workers outnumber those in production by a ratio of nearly three to two.

The simple arithmetic threat to membership here is further complicated by the fact that blue-collar workers are more and more being replaced by engineers, technicians, and white-collar workers—groups for whom unions have thus far been unable to exercise a strong appeal. And though the unions have begun to tap such new sources of membership as civil service employees, teachers, and retail clerks, there is little sign that over the long haul these sources will provide a sufficiently large new influx to balance the loss of manual workers. To make the outlook gloomier, some reasonably informed people are now predicting that in twenty years’ time only a handful of workers will be needed to produce all the nation’s goods.

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Another significant factor in the diminution of union strength is the decline of the strike as an effective bargaining tool. Such a statement may appear ludicrous in a year that has already witnessed a five-week tie-up of all Atlantic and Gulf ports, a sixteen-week shutdown of the New York newspapers, an even longer press blackout in Cleveland, two Taft-Hartley national emergency injunctions in the aerospace industry, and the still unremoved threat of a nationwide rail stoppage over the size of train crews. But the fact remains that automation is making certain industries totally invulnerable to strikes; certain others have so much surplus capacity that strikes, far from threatening damage, provide a handy opportunity for management to unload burdensome inventories; and still other industries perform services of such crucial public importance that even the White House has felt called upon to characterize strikes against them as “unacceptable exercises of an undeniable right.”

When push buttons regulate every operation from the receipt of raw materials to the loading of finished products, a tiny crew of non-union supervisors and clerks will be able to keep acres of machines running in the face of a total union walkout. Already, the Bell telephone system and most big electric utilities have reached such a point of immunity to strike harassment. And so have the giant oil refineries. The list will grow longer with each major forward thrust in automation.

In steel, factors of public and political pressure are now operating to inhibit further use of the strike. This is an industry that has suffered six national strikes since World War II. From 1946 until 1958 prices and wages in steel raced upward far faster than those in any other major industry.1 But the upshot of this blissful conspiracy between labor and management to pick the public’s pocket was a virtual ultimatum from President Eisenhower and Congress in 1959 for a non-inflationary labor agreement: after which, it took a 116-day strike, a Taft-Hartley injunction, and some arm-twisting by Vice President Nixon to reach the kind of agreement that Eisenhower had demanded—mostly because management had quixotically committed itself to forcing a wholesale change in union work rules.

One result of this strike was the discovery that the United States could satisfy all its steel requirements, even in a year of high-level industrial activity, with 85 per cent of its steel capacity shut down for nearly four months. The excess of capacity over demand was so great that, within six months after the mills reopened under a presidential order, the companies voluntarily blacked out half their furnaces and furloughed tens of thousands of workers because they did not have enough business to keep them on the job. Thus the union is now faced with a new interplay of forces that serves to restrain it from pressing for the kind of wage increases that it had become accustomed to in the first postwar decade.

Under President Kennedy, wage-price maneuvering in steel has undergone a series of baffling new convolutions. Last year, after considerable pressure from the administration to hold the line, the union agreed to a modest package of job-security benefits three months before its strike deadline. When the industry followed with higher prices, the President and the union both considered themselves to have been double-crossed; and the violence of Kennedy’s reaction brought about a quick reversal on the part of Big Steel.

This year—for the first time since V-J Day—the steel companies put price increases into effect even before they sat down to the bargaining table. The union, which had been under strong pressure from both the industry and the administration to pass up any demand for a 1963 increase in labor costs, thus felt no further hesitancy about asking for more. But the horizons of union expectancy were still far narrower than any it would have deemed tolerable in the inflationary surge of the immediate postwar period. What the steel producers used to call wage-push inflation is now operating in reverse, with the union looking to the industry to make the first move. The wage-price spiral has become a price-wage spiral, but the White House holds a check-rein over any exuberant upward trend on either side of the equation.

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An even better example of the delicate position unions now find themselves in with respect to strikes and wages is to be found in the tangled contract negotiations of the last twelve months between the United Auto Workers and the International Association of Machinists on the one side and the major manufacturers of missiles and spacecraft on the other. The two unions argued that their members had been shortchanged on past wage increases because they knew they could not strike without impairing the defense effort. They asked for compensatory increases over and above the 3 per cent normal limit set by the administration’s anti-inflation measures. Special presidential fact-finders rejected any increases in excess of the normal 3 per cent, but recommended elections to determine the union’s right to a union shop. With a two-thirds vote needed to win, the unions lost three elections and won one. At Boeing, where they won, so many complications developed that a pact finally accepted by the union negotiators was rejected by the rank and file. The dispute dragged on in an atmosphere of high mutual irritation until renewed White House pressure produced a slightly improved management offer for submission to the membership. The rebellion at Boeing was merely the latest in a series of indications union members have given recently of dissatisfaction with the fruits of collective bargaining, 1963 style.

In all disputes thought to affect the national interest, the administration’s policy about whether or not to intervene can be characterized as one of improvisation. Justice Goldberg, during his twenty months as Secretary of Labor, defined the term “national interest” so inclusively, that it came to cover everything from missile bases to a hot dog vendors’ picket line outside the Washington baseball stadium on the day President Kennedy was scheduled to throw out the first ball this spring. And federal intervention started at the top, with the President or the Secretary of Labor: barring a direct settlement, there was constant pressure for arbitration. Now Secretary Wirtz is devoting most of his efforts to getting the Department of Labor out of the strike business. However, given the tradition he has inherited from his predecessor and the presence of an activist in the White House, he has so far not been notably successful in this endeavor.

Where long strikes do occur, as in the case of the New York newspapers, the result is usually to confirm what both sides knew before the strike—namely, that the balance of economic power is now so even that neither can bring the other to its knees, no matter how long the tie-up lasts. The result is an eventual accommodation on terms virtually identical with those an arbitrator or fact-finding panel might have been expected to recommend without any suspension of work. This was about how the New York newspaper strike ended. On the issue of wages, the sharing of savings attributable to automation and the fixing of a single expiration date for all newspaper union contracts, the terms Mayor Wagner proposed after three months of strike were not much different from those he might have put forward the night before the walk-out began. The real difference was that neither side would have accepted the terms without the pointless economic blood-letting.

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For those workers who still tend to regard their unions as a kind of slot machine—into which they deposit their dues and then duly extract regular wage increases—the rewards of membership are not nearly so substantial as they were in the immediate postwar period when wages and prices were spiraling throughout the economy. A serious damper has now been put on wage gains by the combined effects of unemployment, public concern about inflation, and the squeeze on many industries themselves from increased overseas and domestic competition.

Even before the White House officially established the policy of gearing higher wage and fringe benefits to the basic annual rise of roughly 3 per cent in national productivity, such a standard had officially come to be used in many sectors of the economy as a guide to non-inflationary increases. The initial push came from the General Motors-United Auto Workers contract in 1948, which had been designed to put more science into wage determination. The contract contained two new features—both by now basic elements in all G.M. contracts. One was an annual improvement provision, under which the workers would get an increase based on the over-all expansion in national productivity. The other was a cost-of-living escalator, intended to keep higher prices from swallowing up any of the improvement.

Neither the G.M. formula nor the Kennedy guidelines that descend from it operate with slide-rule exactness. Yet both substitute a mechanized measurement for the customary interplay of economics, personality, and muscle in collective bargaining. To the extent that these mechanistic standards become institutionalized in the bargaining process, they take most of the excitement and all of the surprise out of it. Inevitably, their long-term application will make the outcome of bargaining so predictable that workers are bound to ask why they need a bargaining committee at all—why a computer could not represent them just as satisfactorily.

This may become even more true if the kind of progress-sharing plan that has just been developed at Kaiser should be widely accepted. Under this plan, the Kaiser workers get 32½ cents of every dollar that the company saves in production costs. This figure represents exactly the proportion of labor costs to the total costs at the Fontana plant. In high-payroll industries, the proportion might be as much as 65 or 70 cents of every dollar, while in low-payroll industries, it might be 10 cents or less. The ratio once established, however, is permanently fixed. It remains, then, merely to calculate the savings—a job for which a computer is ideally adapted. Indeed, the authors of the Kaiser formula acknowledge that it would not work at all if there were not electronic brains to carry out the myriad computations swiftly enough to permit a monthly payoff.2

Actually, however, much of the bargaining process these days is centered on measures to enhance job security, not on how much more money is to go into pay envelopes. It is coming to be understood that the quest for better methods to protect workers from the adverse effects of automation requires more time and far more evenness of mind and temper than negotiators can give it under the club of a strike deadline. That is why it is being ever more widely proposed that unions and employers should designate joint committees to meet at frequent intervals and discuss mutual problems. The lists of problems and the approaches to them are naturally as varied as the industries and unions involved. The joint committees of Kaiser, Armour, and a few other companies invite outside experts to sit with them as representatives of the public, while the major companies in steel and automobiles have ruled out all third parties.

The main function of all the committees is to establish certain agreed-upon factual bases for bargaining so that in the tightening atmosphere of an expiring contract the negotiating table will not collapse under the weight of problems too big for hurried appraisal. The difficulty is that some of the problems automation raises for these committees are too vast and ramified to be solved within a particular company or industry, even with the greatest will to cooperation between management and labor. At Armour, for instance, union representatives have time and again come almost to the point of quitting the committee because too few jobs are available for meat workers displaced when the company decides to close a packing house. Retraining and transfer options are meaningless if there are no jobs in Armour or in the general community for which the uprooted workers can qualify.

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In general, automation presents the kind of problems to the unions that puts them as members of joint committees into an almost impossible position. For either they share in presiding over the outright dismissal of workers, or, if the displacement rate is low enough, their role is to protect the individual worker while the total reservoir of jobs dries up. In either case, the union leader willy-nilly becomes a partner in the liquidation of his own empire.

No union leader can buttress his popularity by exacting a high price for the sale of his members’ jobs. A severance pay allowance of $4,000 or $5,000 is a poor substitute for a regular pay check, even taking into account the anxiety that constantly pursues the hourly-rated worker forced to swing with the demand cycle in the mass production industries. Retraining benefits, too, offer him little protection: such things as age, limited literacy, and grossly inadequate information about what and where new skills are needed make retraining a mockery for many workers.

So long as the national unemployment rate stays above 5½ per cent, as it has now for more than five years, union members will continue to view every forced curtailment with dread and to bear a grudge against every union leader who agrees to a shakeout plan. The story of coal is graphic: John L. Lewis recognized many years ago that there would be no coal industry and no jobs if his United Mine Workers did not go all-out to foster mechanization and make coal competitive with oil and natural gas. Lewis succeeded so well that the coal operators he once fought in bloody industry-wide strikes now salute him as the industry’s savior. But the price of salvation has been the forcing out of more than 300,000 miners in the last fifteen years. They huddle with their families in the ghostly towns surrounding the abandoned mine tipples in West Virginia, Kentucky, Tennessee, Pennsylvania, and other coal states. And they curse the union they helped to build, as they scratch out subsistence at nonunion “dog holes” where there are no welfare royalties and the pay is half the union scale.

Because of what happened in coal, many other unions are adamant about demanding guarantees that any manpower savings brought about by technological innovation will be effected through normal attrition and not mandatory layoffs. The steel union would not even begin to discuss the progress-sharing formula with Kaiser until it had received such an assurance from the company. The fact that the Fontana plant has a regular annual drop-off of more than 8 per cent as a result of retirement, voluntary resignation, or death made it easy for management to agree; automation is not expected to shrink the size of the work force at a greater pace than that anyway.

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But arrangements of this kind, consoling as they are for workers already on the job, offer nothing to the huge wave of youngsters now attempting to enter the job market. The man with a job is protected, even if he must be transferred to another job. The youth without a job finds the “keep out” sign more firmly in place than ever. The young are coming out of school to seek work at a rate that makes it necessary for us to create 25,000 new jobs every week for the next ten years, without any allowance for the jobs being wiped out by technological change or for those needed to sop up the 4 million already idle.

These young workers have no memories of the depression, of the sit-down strikes or of company goons and yellow-dog contracts. Their image of unions was formed largely by three years of televised testimony before the McClellan Committee on the seamier side of labor-management relations. To this image is now being added a conviction that union seniority systems and attrition programs for dealing with automation are conspiratorial devices foisted on industry by labor organizations, whose sole concern is to guard the vested rights of their own dues-payers.

There is an equally intense hostility to the unions among many Negroes and other victims of racial or religious discrimination—among those Negroes, for instance, who have never been able to break into either the building or printing trades. Now their demands for equal treatment have not only the encrusted prejudices of fifty years or more to overcome, but the additional resistance of many craft unionists that results from the growing obsolescence of their own particular manual skills.

All of the above problems—the demise of the strike; increased mechanization of bargaining; increased bureaucratization of the work process itself; automation and unemployment—will require for even their proximate solution a degree of political commitment American labor has never shown. They demand that politics become a principal business of unions, not a haphazard adjunct of their narrowly economic purposes. This is a difficult, perhaps impossible readjustment for a movement that has always prided itself on its abhorrence of ideology. Even in Great Britain, where class lines are more sharply drawn and where the Labor Party has an excellent chance of recapturing power in the next election, the unions are not really the party’s dominant element in policy or purpose.

American unions, which will be more and more compelled to move away from their blue-collar identification if they are to appeal successfully to industry’s newcomers, are already conscious of the need for more direct involvement in community affairs; they know they must do more in education, health, recreation, and philanthropy. But they lack conviction and direction. Their programs for securing the public weal are as lackluster, and offered as perfunctorily, as those that the administration keeps shoveling into the Congressional hoppers: looking forward to all the right things, but with no real expectation that anyone will pay attention. Labor’s stock refrain is that it is for everything the President wants in order to stimulate the economy, only that the President’s bills do not go far enough.

When union leaders come to the White House, they are docile guests. I asked one labor participant in a recent presidential luncheon whether any of the unionists had told Mr. Kennedy he was not doing enough about the unemployed. “Oh, we didn’t have to tell him,” was the bland reply. “He told us. He said the real problem in America was not balancing the fiscal budget but balancing the human budget.” And with that problem tidily wrapped up, everybody went on a personally guided tour of the White House upstairs. They all left confirmed in their opinion that the United States had a great President.

But the President’s own estimates of the unemployment situation are far from optimistic. On the contrary, the administration expects that there will be a gradual increase in joblessness this year; and no one has any real idea when, if ever, the unemployment rate will recede to the 4 per cent level that the President has set as his “interim” goal for full employment. Labor’s own target of a 2½ per cent rate is not even discussed in White House circles.

The democratic countries of Western Europe are a generation ahead of us in government policies for promoting full employment, influencing plant location, and assisting workers in their search for new jobs. Yet even their policies are inadequate for meeting the challenges of our technological revolution.

Clearly, the United States will never move into an era of abundance without a great deal more planning for the effective use of our manpower and material resources. Equally clearly, the disposition in Congress is to fight anything that smacks of planning. Labor’s big task, for its own survival and the country’s good, is to mobilize grass-roots political sentiment in favor of greater federal responsibility for full production, full distribution, and full employment.

If workers are to give ungrudging acceptance to the idea that the total welfare requires maximum mechanization, they will want assurance that the country knows what to do with the fruits of this increased efficiency. Such assurance demands an economic general staff representing all elements in the population and administering a program aimed at the balanced and sustained development of high levels of public and private activity. The chances for eradicating poverty and joblessness would be vastly better with such a program than they can possibly be if we continue to rely on the notion that tens of thousands of corporate and individual decisions, each predicated on what is good for the business, will automatically add up to full protection for the national economy.

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Labor has no more urgent job in the 60’s than the focusing of its political energies on the conquest of want, illiteracy, intolerance; the building up of both health and decent housing; the realization of the limitless promise of this scientific Golden Age. And apart from their general social necessity, these undertakings would be vastly more inspiriting, to union membership and leadership alike, than the present ever more routine function in the policing of day-to-day plant grievances and the writing of mechanized contracts.

Labor thus far has only one basic answer for joblessness, a shorter work week—and this at a time when two-fifths of our own people are classed as living below minimum standards of decency, and want is endemic in most parts of the world. This is a policy of despair. Until we at least make a stab at abundance, we should not settle for a policy of sharing the misery. What is needed from labor is a degree of independent leadership that will give vitality to the concept of direct political action for jobs and an expanding economy.

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Footnotes

1 For an illuminating description of this process, see Daniel Bell's “The Subversion of Collective Bargaining,” COMMENTARY, March 1960.

2 These observations are not intended to denigrate the Kaiser formula as an expression of labor-management ingenuity in dividing automation's gains. Their purpose is to indicate how the most inventive adjustments can tend to become strait-jackets.

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