The case for unions.

When Safeway told its northern Californian workers earlier this year that it was "redefining"--read "narrowing"--health benefits, the grocery store giant pleaded poverty: Competition from discounters and superstores was forcing it to cut costs.

So imagine the employees' surprise when the supermarket chain announced that its first-quarter profits were 48 percent higher than the preceding year, and that it planned to invest more than $400 million in remodeling old stores and building new ones. Safeway's stock, the company boasted, had soared 51 percent in 1994. Steven Burd, the company's CEO, had taken home a cool $1.26 million, not including his stock options and benefits.

Fortunately, Safeway's workers had someone on their side: the United Food and Commercial Workers Union (UFCW). Sixteen thousand clerks, baggers, and meat-cutters promptly went on strike. About a week later, Safeway agreed to extend their old contract for three years--not a dramatic improvement for the workers, but at least not a retreat.

Such stories of corporate attempts to redistribute wealth in management's favor are all too common these days, but union victories on behalf of the working man are rare. Once a pillar of American industry, labor unions now face irrelevance, if not extinction. From their peak in the fifties, when they signed up roughly one in three American workers, unions now represent only one in six. Not counting public sector employees, the figure is closer to one in 10. If private sector unions continue to decline at the present rate, they will represent less than 5 percent of the workforce by 2005.

That's not just a statistic; that's a potential disaster. With workers' wages falling, benefits disappearing, and safety protections eroding, a viable labor movement is a vital antidote. What Adam Smith wrote two centuries ago in The Wealth of Nations holds true today: "The workers desire to get as much as possible, the masters to give as little as possible. It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute."

Certainly, unions are not a magic bullet for workers' ills. At times they've done more harm than good. Government employee unions have stalled reform by protecting the jobs of poor performers, while many private sector unions have deservedly acquired reputations for greed and corruption. But at their best, unions are one of the few forces left in this country still fighting for a better life for workers.

A Hard Rain's Gonna Fall

Statistics paint a clear picture: American workers are getting a smaller piece of the economic pie. Between 1929 and 1973, incomes for American workers rose an average of 2 percent a year. Since then, they've stagnated, or worse; for the backbone of the blue-collar work force--men with a high school degree or less--wages have fallen at least 20 percent in real terms over the past two decades. Unless it is raised, next year the minimum wage will reach a 40-year low (in real terms). And nearly 20 percent of American workers take home paychecks that leave them below the poverty line.

Benefits are also under siege. The share of workers with employer-paid pension plans declined roughly 25 percent from 1979 to 1988. In the same period, the share of workers under 65 with employer-paid health care dropped from 63 to 56 percent.

That's partly because shifting workers from full- to part-time status, or relying on temporary workers, has become a popular way to cut costs. Temps and part-timers earn 20 to 40 percent less than full-timers for the same work. In fact, a growing number of service industries rely on part-timers as the bulk of their workforce. The largest private employer in the country isn't General Electric or Wal-Mart, it's a temporary agency called Manpower, Inc.

First Union Bank, which operates 117 Washington-area branches, recently announced it was shifting three-fifths of its tellers from full- to part-time status to save customers money, according to a bank spokesperson. Part-time work isn't inherently bad--in fact, for many families it allows for needed flexibility. But when a shift to part-time work means a reduction in benefits--and there's no national health care system to pick up the slack--the change can be catastrophic. And too often, shifts are justified by the need for cost-cutting, even as CEO salaries are going through the roof. First Union's CEO earned more than $1.7 million in 1994.

Like workers' wages, working conditions in many low-wage industries are suffering. Take the Southern poultry workers Tony Horwitz profiled in The Wall Street Journal last December. Saddled with miserable, repetitious jobs in an industry whose injury and illness rate is almost double that of coal mining, they have little hope of ever making much more than $7 an hour. Discipline in some processing plants is so rigid that employees reported urinating on themselves rather than leaving the line without permission.

These conditions and trends are disturbing in themselves, but they're particularly abhorrent in a growing economy. Consider this: In 1972, chief executives at America's largest companies made 40 times the pay of the average worker. Today that ratio is more than 140 to one. During the eighties, the total amount of money spent on salaries over $1 million increased by 2,200 percent--50 times the increase for salaries between $20,000 and $50,000.

Conventional economic wisdom blames stagnating wages and poor conditions on the globalization of the U.S. economy, the continuing shift from manufacturing to service industries, and corporate imperatives to get "lean and mean." No doubt, these are all factors. But so is corporate greed.

Workers need protection from employers' attempts to hold down wages and benefits. Historically, the most powerful force providing that protection was the union movement. It's no coincidence that relatively few of the poultry workers Horwitz profiled, for example, have union protection; indeed, he noted that industry leaders like Perdue Chicken and Tyson Foods, Inc. "have long been renowned for combatting unions."

When unions were in the mainstream, rather than in the margins as they are today, their impact was powerful. Since the nineteenth century, the labor movement has played a role in some of this country's proudest moments. Unions didn't just wage battles against individual employers--although those struggles were crucial during the rapid industrialization of the early twentieth century--they also fought hard for broader social justice.

Unions led the fights for the 40-hour work week, the abolition of child labor, workers' compensation, and Social Security (an achievement even the virulently anti-union seem to embrace today). During the Great Depression, mineworker and autoworker unions helped fight for unemployment insurance and a minimum wage. Union successes brought more blue-collar workers into the middle class. And the labor movement's efforts to protect worker safety also brought initiatives like the Occupational Safety & Health Administration. In short, labor's victories shaped the American workplace as we know it today.

Union triumphs are not just a thing of the past, either. Despite their dwindling membership, unions still help millions of working people secure decent wages and benefits. At Harvard University, for example, the Harvard Union of Clerical & Technical Employees, which spent 15 years fighting to organize, has now seen its members' average salary grow by $7,000 in the last six years. Minimum employee pensions have been doubled, employees' share of health insurance premiums has been halved, and the university now puts up money for education and child care.

Union workers make 39 percent more in pay and benefits than non-union ones, according to the Bureau of Labor Statistics. Even conservative economists concede that shrinking unionization has contributed to the inequity between worker output and wages, the growing gap between white-- and blue-collar wages, and the decline in benefits. Unions, then, would seem the obvious solution to workers' woes. But many workers don't see it that way, and for that union leadership must take much of the blame.

Before World War II, most Americans equated unions not just with working-class issues, but with a working-class ethic. But union bigwigs spent the post-war era burrowing their way into the establishment. They sought perks and prestige, and by the fifties and sixties had become stodgy "statesmen." They often maintained the same close contact with the rank-and-file that the average CEO enjoys with the janitor who empties the corner office wastebasket. Union officials raked in inflated salaries, cut deals with management that undercut the workforce, and became known more for indulging corruption than for championing economic justice.

More damaging still was their shortsighted strategy of rejecting links between wages and productivity. In the late seventies, companies started playing hardball with union employees, citing competitive pressures to lower labor costs. Unions reacted by demanding higher wages regardless of productivity, and they were often strong enough to get their way, at least temporarily. But now, that myopia is costing workers: Had they accepted the link then between wages and productivity, they might be doing better today. Instead, as output per worker jumped 12 percent in the eighties, real wages and benefits for workers rose only 4 percent.

Unions declined further in the seventies and eighties. Labor leaders proved themselves illequipped to adjust to an economy shifting away from heavy industry. The influx of women and immigrants into the workforce also caught white male leaders off-guard. (In the course of a failed bid to organize Harvard's mostly-female clerical and technical work force, United Auto Workers officials once planned to hand out pantyhose.) Rather than aggressively seeking new territory, many union leaders waited for Congress to ride to the rescue by strengthening pro-labor laws (it never happened). And unions stubbornly defended such totems as the Davis-Bacon Act, which inflates the pay-scale for workers on government construction contracts.

When it comes to out-of-touch leaders and poor strategy, however, public employee unions take the cake. Teachers' unions, for example, have done real damage to the quality of American education by making it almost impossible to fire bad or marginal teachers. Public employee unions' insistence on protecting jobs--even the jobs of incompetents--is particularly galling in this era of downsizing and government reform. "D.C. Employees Circle the Wagons," one recent Washington Times headline announced. The story that followed depicted unions fighting to prevent layoffs in the country's most bloated and incompetent urban bureaucracy.

Some unions have made strides, but they haven't come nearly far enough. Take the Teamsters, which for many Americans remains the ultimate symbol of unions gone bad. In 1986, as thousands of truckers were losing their jobs in the wake of deregulation, Teamsters boss Jackie Presser was having himself hoisted on a gilded sedan chair at a Las Vegas convention.

Under current president Ron Carey, the Teamsters have ostensibly made efforts to clean house. So it's disappointing that the Teamsters' trustees recently had to ask why union leaders took "unprecedented" payments for apartments, travel, and personal income taxes, even as the union was eliminating out-of-work benefits and hiking dues to cover a multimillion-dollar budget deficit.

Then there's the International Union of Bricklayers and Allied Craftsmen (BAC), which spent more than $2 million in dues on transportation in 1994, with about a third of that going to charter private jets for its president, Jack Joyce. Apparently, crucial union business required him to travel from a summer home in Maine to a doctor's appointment in Baltimore (and back), to Geneva (dropping his wife to visit her parents in Nuremberg along the way), and around Europe for a month by private plane.

With such missteps, unions do management an enormous favor. If union leaders seem to be narrow-mindedly pursuing their own short-term gain, workers are less likely to trust them with their futures. This gives bosses an effective counterorganizing tactic. "Unions don't care about your interests," employers can say. "They're only trying to get rich off you." The truth in such claims makes union organizers' jobs even harder than they already are.

Indeed, union-busting has never been easier. In the place of the notorious "Pinkertons" --guards who served as employers' private armies around the turn of the century--employers today turn for union-busting help to blandly named consultants like Modern Management Methods, whose modus operandi involves healthy doses of intimidation and manipulation. Martin Levitt, a former Modern Management employee who authored the memoir Confessions of a Union Buster, describes the company's strategy as "corporate terrorism." Clients give the consultants license "to lie, divide, fracture, do whatever it [takes] to destroy the collective spirit of people seeking to exercise their legal rights," Levitt says.

Judy Ray, a Jordan Marsh employee who was fired for trying to organize workers, experienced these methods firsthand. "I have been followed on my day off to restaurants by security guards with walkie-talkies," Ray told the Federal Commission on the Future of Worker-Management Relations last year. "I had ... a management person assigned to work with me eight hours a day, five days a week, who was told he was there solely to work on me, to change my ideas about unions."

When about a dozen nurses at Mountain View Hospital in Gadsden, Alabama, decided last January to sign up with the American Federation of State, County, and Municipal Employees (AFSCME) after their third pay cut in 13 months, the hospital promptly fired 10 of the nurses and ran ads seeking replacements the same day. The nurses were stunned. "We asked why [we were fired] and were told that it was our job performance and our attitude," recalls R.N. Connie McMillan. Hospital administrators had never raised those complaints before.

Thirty years ago, it was rare for management to fire workers for organizing. The 1935 National Labor Relations Act (NLRA), also known as the Wagner Act, made such firings illegal, and the law hasn't changed. But in this era of unsparing cost-cutting, beleaguered workers, and weak unions, bosses have gotten more aggressive and more brazen in defying it.

For employers, union-busting is virtually riskfree: Businesses found to have violated the NLRA must rehire fired workers and pay back wages, but face no other penalties. The Gadsden nurses, for example, have filed a complaint with the National Labor Relations Board. If they lose, they're out of luck and out of a job. If they win, they can return to work for the lower wages and, if they're lucky, claim back pay--hardly a triumph.

In contrast, recruiting new workers into unions is a difficult business. Workers must vote to have a union represent them, and companies can delay or defeat election efforts. The NLRA is supposed to give the unions a fair shot, but it isn't much of a deterrent in preventing abuses: By the late eighties, the National Labor Relations Board had to reinstate nearly 2,000 workers a year because of illegal firings related to union organizing. Compare that to about 600 reinstatements per year in the early fifties, when the number of union elections was about 60 percent higher than it is today.

Workers, meanwhile, are increasingly hesitant to join up--no doubt swayed both by management hostility and union ignominy. A survey last year showed that only about 30 percent of nonunion workers would sign up immediately if they had the chance. But another 12 percent would vote against a union that tried to organize their shop purely from fear of angering management. According to Richard Freeman, a Harvard labor economist involved in the survey, that percentage is enough to swing most elections against a union.

Unions have been further weakened by a cold shoulder from the press. Beyond strikes and scandals, mainstream news organizations seem to have forgotten that unions exist. In part, the problem is that so many reporters come from professional backgrounds where organized labor is an abstraction. More to the point, most TV stations and newspapers are now controlled by corporate oligarchies who view unions with all the enthusiasm of a Calvin Klein model contemplating his first wrinkle. A few years ago, a Washington Post labor reporter went to cover a $325-a-day seminar on union busting--and found four managers and vice presidents from his own paper in attendance. The consultant putting on the seminar hailed the Post as "a leader in the field."

Fighting the Power

Resuscitating unions will require that the unions remember who they exist to serve. They've got to clean up their acts, narrow the gap between leadership and rank-and-file, and recognize that preserving jobs in the public sector does not always serve the public interest. By doing so, unions can inspire the loyalty of the workers they represent--and that's half the battle.

Of course, strengthened labor laws--such as tougher penalties for employers who violate the NLRA--would be nice. But the Republicans running the 104th Congress seem more likely to open loopholes in safety regulations than to close them in the NLRA. For unions, success in the nineties will require self-reliance and creativity.

Most unions now spend less than 5 percent of their income on organizing; that's far too little to begin to recapture workers' hearts and minds. Some unions understand that. The Service Employees International Union (SEIU), for example, spends 30 percent of its income on organizing, and has results to show for it. More than 8,000 Los Angeles County janitors recently organized by SEIU will see their hourly wages rise from $4.25 to $6.80 over the next five years. Just as important, the janitors will all eventually get family medical benefits.

SEIU is also among the unions adopting tactics that hearken back to the potent activism of the thirties. Perhaps the best-known such effort, the "Justice for Janitors" campaign begun by SEIU in the mid-eighties, is known for in-your-face tactics that range from street theater to civil disobedience. The movement started in desperation in Pittsburgh as building owners flocked toward non-union janitorial contractors. Despite some early setbacks, the campaign has since organized more than 35,000 janitors.

Other unions are trying to link themselves to broader social aims. The L.A. Manufacturing Action Project in Los Angeles County is trying to organize some 300,000 immigrant industrial workers by forging links with churches and politicians, to help meet workers' social needs. "The labor movement was at its best when it had all the characteristics of a social movement," says organizer Joel Ochoa.

Unions are also finding strength in conciliation--and smart business practices. Years ago, the United Auto Workers and others softened their reflexive hostility to management by signing off on "partnership" agreements aimed at improving competitiveness. At some companies, unions have become major stockholders, allowing them to balance management and worker concerns, and encouraging management to view unions as partners rather than as adversaries. In the historically strife-torn mining industry, the United Mine Workers of America has recognized that improved labor-management relations, and the increased efficiency that results, can keep threatened mines open.

Management might heed a similar lesson: In the long run, worker satisfaction is in a company's best interest. Xerox estimates that cooperation with its union has reduced costs by 30 percent and product-development time in half. At Levi Strauss & Co., the country's largest clothing manufacturer, the Amalgamated Clothing and Textile Workers Union is working to revamp production, and the company is cooperating by letting the union sign up even more employees. "The more workers in the union, the greater their voice, and that drives the process forward," Ronald Martz, manager of a Levi plant in Harlingen, Texas, told The New York Times.

Those companies are exceptional, but they've recognized a broader truth: Sooner or later, gross inequality and unfair working conditions have an impact on all of society. "Is improvement in the circumstances of the lower ranks of the people to be regarded as an advantage or an inconvenience to the society?" Adam Smith asked. The answer was plain: "Servants, laborers, and workmen of different kinds, make up the far greater part of every political society.... No society can surely be flourishing and happy of which the far greater part of the members are poor and miserable." In other words, no one benefits when a six-buck-an-hour security guard heads for the emergency room with pneumonia because he lacked the health insurance needed to get treatment earlier, or when a single mom working second shift at the neighborhood 7-Eleven needs food stamps to support her kids.

To curb the old-style excesses and myopia, a little comeuppance for unions was certainly in order. But since the seventies, comeuppance for unions has given way to gross injustice for workers. As productivity increases and executive compensation rises to ever more exorbitant heights, it's only fair that workers share in the wealth. We need unions to make sure they do.