Rancor Is No Fix for Labor Problems

The threatened split in organized labor that erupted last week is all about politics.

I’m not talking about the internal squabbling of union leaders. I mean real politics -- elections and legislation.

That’s what’s really driving the five unions that formed a potential breakaway group, called Change to Win, within the AFL-CIO. They fear -- quite rightly -- that they’re losing political clout as their membership numbers decline. They’re in a fight-for-survival mood.

But such moods often produce more heat than light, and labor could damage its own cause if it doesn’t adapt and compromise.

The same goes for labor’s political opponents, who are pushing a ballot initiative in California this year intended to sharply reduce unions’ ability to make political contributions. Labor’s opposition includes Gov. Arnold Schwarzenegger, who has proposed additional ballot measures aimed at curbing the power of public employee unions.

Such open combat is the last thing the economy needs, both in California and nationally. Today’s big issues -- massive industrial change, global competition and, at the state level, the simultaneous need for deficit reduction and fresh investment for expansion -- cannot be resolved by bitter argument. Pitched battles leave casualties from both sides scattered on the field.

In this overheated environment, it helps to understand where the unions are coming from. From there, it becomes clear where they should go next.

Unions fear being marginalized, says Andrew L. Stern, a leader of the breakaway movement and head of the Service Employees International Union. And no wonder: Union membership has declined to fewer than 15 million from 18 million two decades ago. That’s only 12% of the total labor force.

Labor’s political influence clearly has waned. Despite heavy spending and hard campaigning, the AFL-CIO has been on the losing side in two presidential elections in a row. And union leadership has been unable to get Congress even to pass legislation supporting workers’ rights to organize and vote on unions in their workplaces.

Halting the slide in political clout is the main reason Stern and Teamsters Union leader James P. Hoffa and others have formed Change to Win. They advocate merging many unions into giant groups, the better to take political action. (The AFL-CIO leadership, President John J. Sweeney and his main backer, Gerald W. McEntee of the Assn. of Federal, State, County and Municipal Employees, also believe in political action, but they believe a decentralized approach of five dozen unions is the way to go.)

Elections and public policies are crucial for labor unions. “Labor’s history has always benefited from public policies, from minimum wage to the Full Employment Act,” notes Stewart Acuff, organizing director of the AFL-CIO. He cites recent government regulations of home healthcare and child care as factors that helped the SEIU organize workers in those occupations.

And labor, despite reduced clout in other areas, is still able to score political wins at the

local level. California’s public employee unions proved that this year when, through an adroit campaign of advertising and public argument, they forced Schwarzenegger to withdraw his proposal to change the state’s guaranteed pensions to a system that relied partly on 401(k)-type retirement accounts.

“Don’t forget, unions can throw millions of members into the field in any political contest,” notes professor Harley Shaiken of UC Berkeley, a specialist on labor issues.

The problem for labor is that Schwarzenegger was right on the pension issue. The California Public Employees’ Retirement System is underfunded and threatened because the cities that make contributions to the pension fund are themselves in financial difficulties -- San Diego being a notable case in point. A reasonable negotiation and compromise between the unions and the governor would have served the public better.

It would have served the unions’ long-term interests better too, because unions increasingly are being attacked as special interests. This is particularly true in the matter of pensions, at a time when more than 60% of private-sector employees -- who earn less on average than do public employees -- have had to adapt to 401(k) retirement plans.

To see how compromise can work better than combat, look at the United Auto Workers. The UAW, one of the nation’s proudest unions, has been succeeding by adapting to a tough global environment. The UAW last year arranged a separate, lower wage scale in an agreement that made possible a $1-billion investment in a Toledo, Ohio, parts plant for DaimlerChrysler’s Chrysler division. And the UAW increased its membership in the auto parts industry by 25,000 members last year .

At the moment, the UAW is embroiled in a difficult argument with General Motors Corp. over retiree health benefits, the result of contract terms negotiated decades ago that have come back to bite the limping auto giant. Both the union and GM management have been making confrontational noises, but just last Thursday the UAW suggested quiet talks to work out differences -- a stance that GM brass also have advocated.

In California, by contrast, all is confrontation leading up to the special election in November. The business-backed initiative that would prohibit unions from using member dues, without specific permission, to contribute to political campaigns is not going to stop union backing of political contests. Unions will use some other method. Limits on corporate contributions certainly have not reduced business money flowing into political campaigns.

But the rancor such issues engenders gets in the way of the cooperation the state needs. California must reduce or alter its public spending. Everybody knows that, and if they don’t, Wall Street bond raters will drive the point home.

The teachers union, meanwhile, is raising $54 million to fight Schwarzenegger. The governor has raised comparable millions to fight the teachers. Here’s an idea: Suppose the

governor and the teachers take those millions and use them to help schoolkids learn? That would certainly do more for

the state than rancorous argument.

The plight of unions, as the economy has changed, sometimes makes them look dated and ineffective. But that’s not the case. Unions are hardly going away. In fact, the greatest gains unions are making today are among hospital workers and other largely immigrant laborers in the lower-paid service occupations, fulfilling labor’s historic role of representing the poor.

Labor’s original political clout was built from the voting power of just such immigrant workers. By organizing them again, labor could be going back to the future.

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James Flanigan can be reached at [email protected].