The New Unionism and the new politics: Public sector unions use new clout to influence public policy
By Leo Troy
While traditional manufacturing-based private sector unions wither, public sector unions have grown dramatically since the early 1960's. This "New Unionism" represents a shift in political orientation -- and a new sophistication. Organized labor is recruiting white-collar professionals, specifically, government workers and teachers, to the labor movement. With experience in government bureaucracy, and alliances with sympathetic elected officials who oversee them, the leaders of public sector labor unions now pose a challenge to the American economy. Public sector unions want to shift economic resources from the private to the public sector. Unlike their predecessors in the old industrial unions, the new leaders of organized labor -- many of whom come from public sector unions -- want to revolutionize public policy to meet the goals of the labor movement.
At the federal level, the New Unionism is dominated by government employees' unions like the American Federation of State, County and Municipal Employees (AFSCME) and the American Federation of Government Employees (AFGE), and by teachers' unions like the National Education Association (NEA) and the American Federation of Teachers (AFT). These unions got their start with Executive Order 10988, issued by President Kennedy in 1962. Most public sector labor organizations prior to 1962, notably postal unions, were "proto-" rather than full-fledged unions. But Kennedy's order allowed labor unions to organize and represent public employees. Wisconsin and the City of New York had actually anticipated federal policy, but E.O. 10988 was the real catalyst for the contemporary public sector union movement.
Following Kennedy's opening to the unions in 1962, the ranks of the new public sector unions swelled dramatically. Subsequent executive orders and legislation have tried to promote public sector unionism in federal agencies, but they have failed to increase actual union membership or the union share of employment -- known as density -- among federal employees, except in the U.S. Postal Service. Union density in the public sector has levelled off at around 40 percent, while private sector union density has fallen to under 10 percent.
President Clinton has assisted unionism in the federal government by pushing through drastic changes in the Hatch Act, the historic legislation that barred federal employees from organized political activity. These changes freed federal unions and employees to become politically active. Under the guise of a "reinvention" of government, Clinton also set up de facto works councils, euphemistically identified as labor-management "partnership councils." While these steps neither increased federal union membership nor density, they did increase the unions' bargaining power and their role in managerial "decision-making." Under Executive Order 12781 issued by the President in 1993, the scope of issues over which management and unions were required to negotiate was expanded to include changes in hours of duty, the method and means of doing work, the technology used to do the work and the number, types and grades of employees.
"Organizing the Organized"
In state and local government, public sector unionism is primarily the product of "organizing the organized." Professional and public employee associations, which were in existence for years prior to the onset of collective bargaining, either transformed themselves into collective bargaining organizations or were absorbed by other unions. The most notable transformations occurred in the National Education Association, which dates from 1857, and the American Federation of Teachers, which was formed early in the twentieth century. Both historically had regarded themselves as professional associations and rejected collective bargaining. The AFT was an affiliate of the American Federation of Labor, one of the predecessors of the AFL-CIO, but while perhaps regarded as a de facto union because of its name, it wasn't.
But the NEA and the AFT did become unions in the 1960's, following Kennedy's executive order, and soon they were engaged in collective bargaining and strikes. In fact, they became rivals, competing for membership and contracts, which accelerated their transformation. Today, these unions are leaders within the New Unionism, and their significance will continue to grow as they move together -- I expect them to merge one day -- into the forefront of the entire organized labor movement.
Unions did attempt to organize previously unorganized government employees, but their greatest successes came in absorbing existing professional associations. Many of the hundreds of state and local governmental associations initially tried to remain independent of the union movement, once the ban on collective bargaining for public employees was lifted, but few succeeded. Most eventually merged with established unions. The two most important mergers were the affiliation of the 100,000 member California's state employees' association with the Service Employees International Union (SEIU) and, in New York state, the merger of the Civil Service Employees Association, with approximately the same number of members, with the American Federation of State, County and Municipal Employees (AFSCME). Both SEIU and AFSCME are affiliate unions of the AFL-CIO.
The New Unionism Brings With It a New Politics
The old professional and public employee associations had considerable political experience. They were adept at lobbying and political maneuvering -- a sort of "political collective bargaining" through which they improved the terms and conditions of their employment -- and they brought this expertise to their new mission as unions. As the Great Society programs of President Lyndon Johnson began to encroach on state and local affairs, the New Unionism extended its political expertise to the federal level and began involving itself in congressional and presidential elections. Years later, eager to put a Democrat back in the White House -- after all, the last Democrat in the White House had created the Department of Education -- the two teachers' unions, the NEA and the AFT, whose combined membership exceeds 3 million and accounts for about 40 per cent of the total membership of public sector unionism, exercised their tremendous power to elect Bill Clinton in 1992 and 1996. The NEA alone accounted for one-fourth of all delegates to the 1992 Democratic convention. Both teachers' unions, as well as the AFL-CIO, endorsed Vice President Al Gore for the presidency last year.
Indeed, the relationship between the AFL-CIO and the Democratic Party is beginning to resemble the old ties between the Trades Union Congress of Great Britain and the Labour Party. The trade unions in Britain completely dominated Labour Party policies until the advent of Tony Blair, and their influence remains considerable. In the U.S., the AFL-CIO's "ownership stake" in the Democratic Party is increasing and it has bought more public spending and employment (new union members) to benefit teachers and other organized public employee groups. This symbiotic relationship is the cornerstone of the New Unionism.
Nearly seventy years ago, in The Modern Corporation and Private Property, Adolf A. Berle and Gardiner Means hypothesized that there was a separation of interests between the management and the owners of corporations. They were wrong. But there actually is a separation of interests between the management of unions and the membership. A major political divide exists between the union rank-and-file and the management of the unions. This division is particularly sharp on international trade policy. Within the private sector -- the Old Unionism -- there are thousands of union members whose jobs depend on exports. But the professional management of organized labor appears not to understand that the U.S. is the largest exporter and trader in the world economy. Restrictive trade policy, like the Smoot Hawley tariff law in the early 1930's which deepened and prolonged the Great Depression, costs all workers -- union and non-union -- jobs.
The unions' claim that labor and environmental standards must be introduced into trade agreements is a fig leaf for its reactionary opposition to expanded trade. The same attitude is evident in their support for the minimum wage, which most economists agree causes higher unemployment, particularly among youth, especially black youth. The management of the Old Unionism proudly proclaims its support for a minimum wage for all workers, not just unionized workers. But the unions' endorsement is an unannounced wage claim to restore the differential between union scales and the minimum wage. Until the mid-1930s, the American Federation of Labor (one of the predecessor federations of the present AFL-CIO) opposed the minimum wage because it feared that a legally-mandated minimum wage would be substitute for unionization. AFL officials reasoned that workers who were covered by a legal minimum would not look to unions. They were right. The decline of the Old Unionism over the last quarter century is undeniably associated with the large number of government programs regulating the conditions of employment that are now substitutes for union collective bargaining.
The opposition of the leadership of the New Unionism to international trade and the minimum wage is even harder to fathom. Who in the public sector, one might ask, particularly in the teachers' unions, is injured by freer trade? As consumers, all union members are harmed by restrictions on trade because they are forced to pay higher prices and accept fewer choices. However, in the interests of "labor solidarity," -- and in pursuit of a wider political agenda -- the leadership of public sector unions follows Old Unionism in opposing freer trade. Likewise, the leadership of the New Unionism supports increases to the minimum wage, even though its relevance is very limited in the public labor market.
Impact of the New Unionism on the AFL-CIO
Public sector unionism has transformed the AFL-CIO and the Old Unionism. The best example is the metamorphosis of the Service Employees International Union (SEIU), the organization which John J. Sweeney led prior to becoming president of the AFL-CIO. For most of the last century, SEIU was known as the Building Service Employees International Union. Its membership was confined to the private sector and it was comprised largely of elevator operators, maintenance workers, janitors and other unskilled, low-wage workers. It was a minor union with little opportunity for growth and little importance in the labor movement. The prospect of its president becoming the leader of the federation was genuinely remote.
However, under Sweeney's leadership -- and armed with a new name and mission -- the SEIU abandoned its old territory and set out to organize public employees of any occupation. Like the early public sector unions, most of SEIU's subsequent growth came from "organizing the organized." Soon, Sweeney had transformed the union from a minor private sector labor organization into a predominantly public sector organization, and from a backwater organization into one of the most powerful unions in the AFL-CIO. In 1995, that transformation propelled Sweeney into the highest political office in the union movement. In a palace revolt, Sweeney ousted his predecessor, Lane Kirkland, and defeated Kirkland's hand-picked successor, Thomas Donahue, to become the president of the federation.
Yet even Sweeney's triumph only represents a halfway house between Old and New Unionism in the AFL-CIO, between old-style turf-conscious bureaucrats who want to preserve their power to manage contract relations with private industrial employers and a newer brand of professionalized activist with a much broader political agenda. Historically, the Old Unionism had dominated the leadership of the federation and its predecessors, but Sweeney's election may prove to be only the beginning. While Sweeney has moved the political orientation of the AFL-CIO to the left, the AFL-CIO will shift even further leftward after the teachers' unions consolidate and ascend to the leadership of the federation, as I expect they will in the new century. The two teachers' unions will merge within a few years and the new union will affiliate with the AFL-CIO. (The NEA is currently not affiliated with the AFL-CIO, and affiliation will be one of the terms of merger.) The new union's size and wealth undoubtedly will propel it to the forefront of the federation, making the federation's political shift leftward even more conspicuous.
Already the New Unionism wields enormous financial and political clout. According to a study by Marick F. Masters and Robert S. Atkin that appeared in the October 1997 issue of Industrial Relations, the total assets of all unions in 1995 exceeded $10 billion, while total revenue was almost $13 billion. Furthermore, the combined annual income of the teachers' unions (local, state, and national organizations) has also been estimated at $1 billion, and the revenues of their PACs exceed $100 million annually. On a full-time equivalent basis, the NEA and the AFT combined employ more political operatives than the Republican and Democratic parties together.
The value of their cash contributions is doubtless exceeded by their in-kind contributions. Indeed, I have estimated that in a presidential cycle year, the combined union movement -- and there are some 40,000 local unions in the U.S., and not just in the AFL-CIO -- makes in-kind political contributions with a value of about $300 million. Almost all of it supports candidates of the Democratic Party. Even though perhaps 40 percent or more of union members vote Republican, especially members of Old Union affiliates, the managements of both the Old and the New Unionism ignore their members' political preferences. They do not "consult" with their members as they claim and they use members' dues payments, most of which are compelled by bargaining agreements, for political purposes.
The Significance of the New Unionism for America
The founding of the American Federation of Labor in 1886 marked the beginning of the modern union movement, and the creation of the Congress of Industrial Organizations in 1937 organized for the first time America's manufacturing and industrial giants. These are moments of high importance in American social and economic history. But I believe the emergence of the New Unionism outranks these events, as momentous as they once appeared to be. It is now clear that the old AFL and CIO unions are moving into the twilight. The rapidly expanding private labor market in this country, and the unions' limited appeal to private sector workers, confirms their irrevocable minor status.
By contrast, the New Unionism is moving to the forefront of the organized union movement, and it is carrying an aggressive philosophical and political agenda. Absent any checks upon it, public sector union membership will soon exceed membership in the private sector unions. Already, its density -- or market share -- exceeds private sector density by almost four times. Unions in the private sector represent less than ten percent of workers and their numbers will continue to decline, while public sector unions represent almost forty percent of public employees and that percentage will probably increase or at least remain stable.
In analytical terms, the New Unionism constitutes a "structural break" in the development of labor organization. It has fundamentally changed the identity of union membership and the definition and meaning of union activity. Most of its members are white collar workers. Many are teachers or other highly educated professionals, and their social and economic outlook differs markedly from the blue collar skilled and unskilled workers who comprise the Old Unionism, creating contrasting philosophies in the two wings of organized labor. Even though both are part of the AFL-CIO, these differences have a major impact on their political behavior.
The "brothers and sisters" of the Old Unionism seek to redistribute private income from employers and nonunion workers to union members. This represents a much more modest income redistribution than the New Unionism, which demands that federal, state and local governments spend an ever increasing share of national income for programs and policies that benefit it. Its attempt to redistribute more of the national income from the private to the public economy constitutes a New Socialism which is light years from the policies of the Old Unionism. In fact, while the share of national income spent by government has grown dramatically since 1929, it is questionable whether collective bargaining by old-style industrial unions has had much of an impact on the redistribution of income. However, the New Socialism that is part of the New Unionism -- a redistribution of national income from the private to the public economy -- is a far more serious challenge to a modern capitalist society. Its chances of succeeding are considerably better than earlier forms of socialism, which advocated public ownership of the "means of production." Except for a few committed ideologues in the universities, that brand of socialism is a recognized failure.
The Unique Character of Labor Relations in the New Unionism
The relationship of public sector unions to the "public employer" is unique in labor-management relations. In the private economy, an adversarial relationship exists between unions and employers. But in the government sector, public employers welcome unions with few exceptions. The parties share common interests: the public employer is a person or agency with a political agenda that seeks to enlist the political support of the union. The employer has no reason to negotiate at arm's length with a political ally. Of course, the cost of collective bargaining agreements cannot be wholly ignored because political leaders must seek re-election. But public employers do not have to compete or make a profit to stay in operation. Redistributing the national income from the private to the public sector benefits both employer and employee. Consequently, public employers tend to be generous with their bargaining partner and political ally at the expense of taxpayers. Such largesse brought New York City to de facto bankruptcy in the 1970s. Because of their close ties, the relationship of the public employer and the New Unionism is virtually incestuous. Together, they are a potent combination with the power to redistribute the national income and, therein, establish the New Socialism.
In the private sector, the consumer rules. But another unique feature of the New Unionism is its ability to displace consumers who seek to influence employer policies. For instance, the NEA has more influence than parents over the policies and programs of the national Parent-Teacher Association, which is supposed to generate parent input on education policy. In the private sector, this would be roughly equivalent to unions determining managerial policies in a company's operation. It is an Americanized version of the German practice of "co-determination." Because the public school system is so politicized, the academic performance of the country's public schools has few objective critics. Even though huge taxpayer expenditures have failed to improve public school education, the teachers' unions call for more public spending -- and they usually get it.
The politicization of public services by the New Unionism and the complicity public authorities in union demands was dramatically illustrated in February 1999 in Los Angeles County, the largest population center in the country. Favorable actions by the L.A. County Board of Supervisors made it possible for the Service Employees International Union to organize from 70,000 to 80,000 home care workers after more than a decade of failure. If a private employer had done what the L. A. County Board of Supervisors did, the action would have been declared an unfair labor practice in violation of the law, and the union would have been declared a company-dominated labor organization. The home care workers of Los Angeles County were organized with the active participation of the "employer." County officials were complicit in the "organizing drive." But it wasn't just local officials who were acting on labor's behalf. In Los Angeles County, the unionization of the county's home care workers began with a state law permitting local jurisdictions to create an agency which would become the legal employer of that jurisdiction's home care employees.
Previously, the county had employed home care workers as independent contractors. The original county home care program was set-up in 1973 by the State of California to help keep elderly and disabled persons at home and out of more costly hospital and nursing home facilities. Under that system, SEIU tried to unionize the home care workers but consistently failed. Those failures caused SEIU and activist groups sympathetic to its goals to actively lobby for a new state law which would permit local jurisdictions to create a public agency that could then become the legal employer of the home care employees. Once the law was passed, Los Angeles County could establish an agency -- a centralized employer -- to become the single employer of home care workers. As a single employer the agency also became an appropriate unit for a representation election and eventually for collective bargaining.
Acting under the state law, Los Angeles County established a 15-member Personal Assistance Services Council in 1997, and it made the Council the "employer" of the County's 74,000 or more home care workers. Members of the Council, who serve without compensation, are appointed by the County Supervisors, and county employees were specifically excluded from Council membership. The upshot was that at least eight of the appointed members are past or present recipients of the county's In-Home Support Services Program. In other words, they are or were clients of the program. Others were recruited from the ranks of consumer and social activists, who presumably could also be members of SEIU. Only county employees were specifically excluded from membership on the Council.
An Unfair Labor Practice?
Needless to say, neither the Service Council nor the majority of the county supervisors opposed the union drive. In fact, both encouraged and abetted it, including the Chairman of the Los Angeles Board of Supervisors, who championed the creation of the Council and its operations, and the clients and activists who now shaped the Council's policies. As noted, had this occurred in the private sector, SEIU's attempt to act as the bargaining representative of the employees would have been disallowed. The union would be disestablished as employer-dominated, while the Council would have been found guilty of an unfair labor practice for dominating the "union."
In this instance, however, there were few complaints that the cost of the union's "negotiations" with its "employer" would be borne by the taxpayer. Soon the union began lobbying the state to fund increases in wages and benefits. It was supported by the Speaker of the California Assembly, Antonio R. Villaraigosa, himself a former union organizer and past president of the American Federation of Government Employees, Local 3230, underlining again the political nature of the New Unionism.
The Council claims it will make services more readily available to recipients by helping to find home care workers through its registry of providers. It also says it will run criminal background checks on possible workers, something that the L.A. Board of Supervisors has apparently been lax about. The County Supervisors also claim that the new system will succeed because clients who might otherwise elect care in nursing homes or from board providers, will remain at home and be serviced by the home-care workers. This was exactly the goal of the initial program mandated by the State of California more than 25 years earlier. But the initial program was unsuccessful, and how unionization of the providers, the real goal of the reorganization of services, will remedy the faults of the program seems a non sequitur.
The chairman of the Board of Supervisors during the drive asserted that the county program is probably the first of its kind in a large urban area. Perhaps so, but not in the way he intends. Without doubt, county politicians have been innovative in developing a new way to organize public employees. To my knowledge, creating a special public employer in order to promote the unionization of employees is a first in labor relations.
If there is any mystery, it's why county executives decided to improve the lot of home care workers by unionizing them. Presumably they have the power to raise wages and improve working conditions. That they wanted to deal with a union and ignore their responsibilities to the taxpayer says something about their motives. Clearly, the home workers were but the means to an end. And the end seems to be an effort to strengthen political alliances with the leaders of a New Unionism.
Can public sector unions and their elected allies use their unusual position to undermine efforts to limit the size and scope of government? Can public sector unions succeed in pushing the interests of organized labor against voters and taxpayers where the private sector unions failed against employers and non-union employees? It may yet be too early to say. But the new developments in public sector unionism suggest that the most important checks on the New Socialism and the New Unionism will be privatization and taxpayer resistance.
Of the two, privatization is likely to be more threatening to the New Unionism. Privatization in public education through vouchers and parental choice, private medical accounts, the privatization of the postal service and efforts to privatize the enormous Social Security system will undermine the power of public sector unions just as surely as global competition has undermined the old private sector unions. We know that introducing choice in education improves educational quality, lowers costs and improves accountability. Privatizing other services will have similar public benefits. One of these will be that it will check the power of the New Unionism.
Leo Troy is a professor of economics at Rutgers University and author of several books, most recently Beyond Unions and Collective Bargaining. He has also published extensively in the leading journals on industrial relations. Reprinted courtesy of the Capitol Research Centre.
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