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Published April 2009

What Role Will Unions Play in 2009?

 

  Douglas Klein

In 1935, in the grips of the Great Depression, President Franklin Roosevelt signed the Wagner-Connery bill, establishing the National Labor Relations Board (NLRB) and setting the stage for workers to conduct union elections. Now, in the midst of the most severe recession since the 1930s, President Obama is set to sign the Employee Free Choice Act (EFCA), that will greatly lower the hurdles for employees to join a union in the United States. This may or may not reverse a long-term trend in the U.S. of declining union roles. A key factor in the rise and fall of union membership in 2009 will be how employees perceive management's response to the economic crisis.

In 1954, more than 28 percent of all U.S. employees were members of a union. Union membership lessened following President Reagan's breaking of the air-traffic controller strike in the early 1980s. This pattern continued through most of 2007, though the decline runs counter to clear pay differentials between union and nonunion employees.

This also runs counter to the 2006 finding by Richard B. Freeman and Joel Rogers that 32 percent of nonunionized American workers want some form of collective representation. This suggests the rate of actual union representation is much below its potential. However, over the last decade, these facts have not increased membership nationwide.

There can be much speculation around the reasons for this decline in union membership. Economists often cite the shift away from heavily unionized sectors, such as manufacturing. Others offer explanations around increases in the overall standard of living, the globalization of production and service operations and the impact of government regulations on the American worker's day-to-day experience. But these factors, while strong, do not fully explain why union membership has declined.

The NLRB has a decidedly anti-union stance and has tolerated employers' union-busting activities. This explains why the EFCA legislation has caused as much negative response from chambers of commerce nationwide as positive responses from the unions themselves.

Advancement in management practices during the past 60 years also has impacted union membership decline. But companies must balance short-term business needs against employees' longer-term needs or risk disaffecting them. Certain leadership  and management practices lead to more enthusiastic, committed and productive employees. Employees who feel they work for a company they can identify with, for a leader they trust and respect and performing a job for which they are well-suited, tend to be motivated to perform and stay. These employees work in "partnership cultures."

As reported in The Enthusiastic Employee, a 2005 top business book, companies with partnership cultures consistently outperform their competitors during both bull and bear markets. A partnership culture is characterized by 12 hallmarks, including basic trust, a long-term perspective, joint decision-making, open communications, financial sharing and equitable day-to-day treatment. And hourly, nonunionized employees often report more positive attitudes on measures of morale, management practice and culture.