New Goals for the Unions

TRADE unions have been one of the great instruments of progress and reform in American society. They have introduced the equivalent of civil rights into a large part of industry, replacing personal management with management based upon agreed rules and procedures, and they have established in much of industry the practice of determining wages by negotiation instead of by the employer’s unilateral appraisal of the market, thereby giving employees a chance to bargain over the gains of technological progress. Most important of all, trade unions have broadened the decision-making processes in the American economy by adding a third power center to the two previously existing centers, business and government. This three-way division of power and influence gives the American economy an admirable diversity of viewpoint and promotes moderation and stability in economic policies by compelling important decisions to be reached by compromise and agreement.

Helped by government policies designed to encourage collective bargaining and by the war, trade union membership has increased more than sixfold in the last twenty-five years. Trade unions have nearly eighteen million members, or about 34 per cent of the nonprofessional and nonsuper-

visory employees of American industry. Unions have been particularly successful in organizing the production workers in large plants. The largest groups of nonunion workers are the employees in small plants, the white-collar workers, and government employees. Almost half of the twenty-one million “blue-collar" workers (craftsmen, operatives, repairmen, and laborers) are union members.

But today, in spite of their brilliant success (indeed, in large measure because of it), trade unions are suffering a great loss of prestige and moral influence. This loss of standing is manifested in various ways: by the mounting volume of critical editorial comment on unions; by the considerable number of states that have passed “right to work” laws, which are a sort of symbol of community hostility to unions; and, most of all, by the reluctance of workers to join unions and by the virtual cessation of the growth of union membership.

The conspicuous economic success of unions has not led workers to organize unions on their own initiative, as they did on a large scale in the thirties. Members must be gained in large measure through high-pressure organizing campaigns in which organizational picketing and other forms of economic pressure are often used to force men to join. Unions still win a comfortable majority of the elections conducted by the National Labor Relations Board, but the proportion of elections lost by unions has risen from 25.5 per cent in 1949-1950 to 39.2 per cent in 1957-1958, and the proportion of nonunion votes cast in all elections has more than doubled since 1950 to an all-time high of 39.2 per cent in the fiscal year which ended June 30, 1958.

Unfair labor practice charges brought by individuals against unions have been skyrocketing. They more than doubled to 2000 in the last fiscal year. In the four years ending June 30, 1953, they averaged only 584 a year. There is no record of the proportion of cases in which the complainant won his point, but the back-pay awards against unions in unfair labor practice cases increased from $128,950 in the four years ending June 30, 1953, to $283,959 in the four years ending June 30, 1957. These figures are not large relative to the nearly eighteen million union members, but the trend is significant.

Drawing courtesy of Excelsior Press.

THE loss of prestige and moral influence by the trade unions is only partly explained by the exposure of corruption and racketeering in the labor movement — though the corruption has been far more widespread than anyone had suspected. No less than ten international unions have been shown to have been headed by corrupt officials at some time during the last twenty-five years, and there has been considerable corruption at the local level. The disillusionment of the public with trade unions springs mainly from two causes: first, unions have turned out to be much stronger than the public expected them to be. and second, they have turned out to be much less democratic than they were represented as being.

The policy of encouraging union membership was urged on the community on the ground that unions were needed to balance the economic power of big business. Unions have done much more than equalize the power of business and labor. When eighteen million workers are organized, a union of a given size becomes considerably more powerful than when only three million or four million men are organized. The union’s capacity to influence the wages paid by nonunion firms is greater, and this means that its capacity to get concessions from union employers is greater. As a result in large measure of the great power of trade unions, the hourly compensation of nanagricultural workers in the last ten years has risen more than twice as fast as the increase in output per man-hour.

The influence of unions has been particularly apparent during the period of credit restraint in 1956 and 1957 and during the recession, when the demand for labor was shrinking. Twenty years ago, unions were champions of the underdogs and were fighting for very elementary rights, such as recognition, a contract, machinery for handling grievances, and the like. Today, unions are fighting to get more pay for the very workers who already enjoy the best wages and conditions in industry. Twenty years ago the public wondered whether unions could hold their own against powerful employers; today the public wonders whether unions can be prevented from forcing creeping inflation on the community.

Strangely enough, the conspicuous success of unions is now hindering their growth. Many workers, especially those in prosperous companies, are not interested in joining because their employers, out of fear of unions, give union rates of pay and other union conditions. Still other workers, especially those in small and weak concerns, do not wish to be organized because they are afraid that a union would put their employers out of business.

The public has also become disillusioned with unions because unions have not turned out to be the instruments of industrial democracy that their early leaders, friends, and well-wishers said they would be. The more or less standard description of a union was that it was an organization through which the individual employees participated in determining the conditions under which they work. But the average worker has a very limited desire to participate in determining the conditions under which he works. He wishes a union to bargain for him, but he demonstrates his unwillingness to participate in determining his conditions of work by his refusal to attend union meetings, in spite of the efforts of officers to encourage attendance. He assumes that the union officers know roughly what he wants, and he is content to let them handle dealings with the employer.

The officers of unions know in a general way the wishes of the rank and file and try to gratify these washes. But the officers have a better idea than most members concerning what is possible and practicable. Hence, the officers may discourage certain types of demands, such as proposals to fight technological change. As a rule, the officers are more conservative than the small part of the rank and file that takes an active interest in the union. Subject to this qualification, the officers usually do a pretty good job of representing the rank and file. Only in this limited and indirect fashion do workers “participate” in determining the conditions under which they work.

Although union officers, on the whole, do a good job of representing the members, they do not take kindly to criticism of their policies from the members — particularly from members who are suspected of aspiring for office in the union — and, especially at the national level, union officers are exceedingly hostile toward efforts to displace them. The result is that, while there is a fair amount of competition for local union offices, competition at the national level is unusual. Professor Philip Taft found that among seven national unions which held 764 elections for national office in the thirty-one-year period of 1910 to 1941, there were contests in only 130 cases. In three unions (the teamsters, the bricklayers, and the street railway workers) there were no contests for national office in the thirty-one years.

In a few unions control of districts or locals by national officers has been greatly overdone, usually as the result of internal political differences. Parts of the pressmen’s union, of the operating engineers’ union, and of the musicians’ union that challenged national officers were deprived of selfgovernment and kept under appointed officers for years. In the United Mine Workers, the officers of most of the districts are “provisional" officers who for many years have been appointed by John L. Lewis. Every convention of the union sees many resolutions from the districts asking that they be allowed to elect their own officers. At the 1952 convention a delegate said: “Give us opportunity; give the young men opportunity to aspire to something in the organization. Give them something to plan for and look forward to, to study the movement and know something about it. This way we don’t have any initiative. You don’t allow us that right— the members have become apathetic, for somebody higher up is going to do everything for us . . . they don’t bother to attend meetings.” But Mr. Lewis still appoints the officers of most of the districts.

THE upshot of all of this is that, though unions are democratic in the sense that they strive for what the members want, they do not fulfill the ideal of giving workers a chance to participate in determining working conditions or even to run the unions, especially beyond the local level. The indifference of most members toward union affairs and the hostility of officers toward competition for their jobs mean that unions are run by the officers, not the members. Particularly at the national level most unions are oligarchies, not democracies.

The great power and influence of the officers in unions create important problems and dangers. Certainly they increase the difficulty of keeping out corruption, since freedom from corruption must depend upon high personal standards among officers rather than checks from the rank and file. Furthermore, they hinder unions in gaining members, since many workers do not care to put themselves under the direction of men about whose judgment and purposes they know little. Finally, they produce disillusionment and lack of sympathy for unions on the part of the public, since unions fall far short of meeting the democraticideals that the public has been taught to look for in them. But in spite of these disadvantages, trade unions are bound to remain oligarchies. This is what a majority of the members desire, and they are not likely to change their minds.

IN REGARD to the excessive economic power of trade unions and their tendency to raise money wages far faster than is justified by the growth of output per man-hour, public policy can do little, though employers and public opinion could do much. Amending the Taft-Hartley Act to limit the right of unions to conscript neutrals in industrial disputes through secondary boycotts would end injustices but would have little effect on the economic power of most unions. Attempts to equalize the bargaining power of unions and employers by using monetary policy to create unemployment would inflict as much injustice as they would prevent and would obviously be wasteful. Recent experience indicates that a fairly high rate of unemployment would be needed. In the recent recession, with unemployment running from 5 per cent to 7 per cent, hourly earnings in manufacturing rose by about 2.9 per cent in the twelve months from September, 1957, to September, 1958.

Equally impracticable is the proposal that national unions be broken up so that they would be unable to shut down whole industries or to whipsaw employers by selecting one competitor to shut down while rivals take away his customers. Breaking up unions would not necessarily prevent concerted action among the parts. Furthermore, this remedy is too drastic to command popular support, and it is a remedy that is worse than the disease. Hence, the tendency of wages to outrun productivity must be dealt with by other methods.

Employers can do much to limit the tendency of hourly earnings to outrun production per manhour. The great need is to raise output by methods which do not at the same time tend to raise wages by increasing the demand for labor. Perhaps the most commonly thought-of way of raising productivity is through the use of labor-saving equipment. But labor-saving equipment must be made by labor. Hence this method of increasing productivity has the immediate effect of increasing the demand for labor, and thus it tends to raise wages as much as it raises productivity. But there are other methods of increasing productivity which economize equipment and which, therefore, do not increase the demand for labor. Examples of these equipment-economizing methods are better selection and training of workers, better scheduling of production, better maintenance of equipment, better control of raw materials, redesign of products to simplify their fabrication and assembly, better setting of production standards, and better supervision in general. All of these output-increasing methods are used in industry today, but industry in general needs to improve greatly its capacity to economize in the use of equipment.

Can public opinion, over the course of time, affect the outcome of bargaining between unions and employers? Union members naturally expect their leaders to get the best terms that can be obtained without precipitating a strike or lockout, and most members do not particularly care whether or not the public likes the bargains that their organizations drive. But, except for a few very strong unions, the members do not like to incur strong public indignation. Hence, if the public shows that it is outraged by wage settlements that exceed the average rise in output per man-hour, union leaders will become less insistent upon inflationary wage increases. But until the public shows strong and definite hostility toward inflationary wage settlements, we must expect rising labor costs to push the price level slowly upward. Public apathy is the ally of inflation.

WHAT can be done about the internal government of trade unions, and who can do it and how? It is important to remember that there is no broad demand from trade union members for democracy in unions. Since union members are quite commonly not sufficiently interested in the affairs of their unions even to attend meetings, it is unrealistic to attempt to force democracy on them. The objective should be a modest one: to protect the members from the abuses of oligarchy rather than to convert unions into democracies.

In the main, the problems must be solved by government action, in spite of the fact that a large majority of trade union leaders are sincerely interested in fair and honest trade union government. In fact, standards of honesty are higher in most trade unions than in many city and state governments, where the politicians have discovered many legal but dishonest ways of plundering the taxpayers. But trade union leaders with high standards of honesty can do little outside their own unions. They are fatally handicapped in dealing with problems of union government by their lack of authority to interfere in the affairs of other unions. Thus, the AFL-GIO has no authority to compel testimony or reports or to prevent the destruction of records, and it has no effective sanctions to enforce any recommendations or orders which it may attempt to apply to constituent unions.

Five principal steps by the government are needed:

1. Prohibit the holding of union office by persons convicted of felony. Since union members are often perfectly willing to keep crooks in office, this prohibition is needed to protect employers and to discourage the invasion of the trade union movement by professional criminals.

2. Require honest and reasonably frequent union elections. If this requirement is to mean anything, simple means must be provided for union members to challenge elections and to get new elections under government auspices in cases where investigation reveals fraud.

3. Require unions and union officers to file certain financial reports, with penalties for omissions and misrepresentation. Most unions now make fairly elaborate financial reports to their members, but so long as the officers can determine the classification of expenditures, these reports may be meaningless. And officers do not disclose income that they or members of their families may receive from dealing with the union or with employers whose employees are represented by the union.

4. Restrict the right of national unions to deprive local unions and districts of self-government. There are frequently good reasons for the national union to appoint “trustees" to run local unions; but the trustees should be required to report regularly, and the trusteeships should be limited to two or three years, subject to the right of the national to extend the trusteeship if special conditions warrant.

5. Provide an outside and neutral source of appeal for union members who are disciplined by the union officers. This protection is important if union members are to feel free to criticize their officers and the policies of their unions and to run for national offices against incumbents. When the national secretary of the bakery workers’ union made charges of corruption against the national president, the national executive board exonerated the president and deprived the secretary of his job. Later the Ethical Practices Committee of the AFLCIO sustained the charges of the secretary, but it could not give him back his job.

These proposed regulations would mean considerable paper work for both unions and government, and they would have no great effect upon the operation of most unions. Nevertheless, the proposed regulations would be worthwhile. They would help keep crooks from invading the labor movement; minorities and dissenters would be given considerable protection; union members would have a better chance to change their officers if they desired, and the officers, in turn, would be made somewhat more sensitive to rank-and-file opinion, especially to opinion among radical and dissatisfied minorities. The public should realize that the proposed reforms would tend to make the trade unions more aggressive and more radical. Hence, unions would have a stronger tendency to produce creeping inflation. But a slightly faster creep to inflation would be a small price to pay for increasing the influence of the rank and file in the unions.

AMERICA needs a trade union movement that is strong, that commands public confidence, and that is a source of responsible and well-informed criticism of our economic institutions. In order to gain the esteem and confidence of the community, unions will have to do much more than use their power to get more for their own members, who already have so much. They will have to embrace new and broader goals.

Fortunately for unions, they have an opportunity to adopt goals that will please their present members, attract new members, and gain for unions the strong approval of the entire community. This opportunity comes from the need to reform the present organization of production in American industry. The unions, if they desire, will be able to play a major role in raising the productivity of industry, helping both consumers and their own members.

The present organization of production in most plants will not bear rational examination. The production process is in large part a contest between management and workers over how much will be turned out — management trying to get as much as it can, the workers holding back to avoid producing any more than they regard management as entitled to receive. The wastes of this process are appalling, because the workers devote part of their skill not to improving methods but to concealing the fact that they are restricting output. And worse than the wastes are the moral effects upon the workers, who are unable to gain the satisfaction of doing their best to promote worthwhile objectives.

The next forward step in industrial relations will be to replace the present contests between management and employees with organized cooperation — a change that will be as epoch making as the establishment of civil rights for workers in industry. But what pressures and inducements will bring about this change? The opposition is formidable from both managements and unions. Managements fear that formal cooperation would diminish the authority and prestige of supervisors and enhance the importance of the union; unions fear it would weaken the militancy of local unions and would develop strong loyalties to the company that in turn would weaken the influence of the national union with its members.

But though unions may be slow to help their members gain the chance to raise their wages by using their brains as well as their muscles, the members are bound eventually to insist upon having this opportunity. The strong need for cooperation has already led to considerable experimenting with plans for giving the employees the opportunity and the desire to participate in promoting technological progress. The best-tested and most promising plan is the well-known Scanlon Plan, under which employees earn a bonus by reducing the ratio of plant payroll to income from sales. The plan does not work automatically — it requires enthusiasm and effort — but it does give management and employees a common interest in reducing labor costs.

When rank-and-file workers become eager to raise their pay by cutting labor costs, amazing things begin to happen. The workers display a remarkable capacity to make technical suggestions pertaining to the product and to methods of operation. They improve their interest in the quality of work. Their attitude toward each other and toward management changes. The worker who was previously regarded as smart because he “got by” doing less than a fair day’s work is regarded as the antisocial person that he really is. The workers become critical of shortcomings of management, such as failure to do a good job of production scheduling or of controlling quality. No longer are the easy-going supervisors the popular ones; the workers come to desire supervisors who are efficient and technically competent and who are good at keeping down the payroll-sales ratio. Some managements have difficulty in adjusting themselves to the new critical attitude of workers.

The opportunity to help transform the organization of production in American industry is precisely what unions need. It gives them a good chance to serve their members — a must for any labor organization — but it also gives them what they now lack, a goal that can command the approval of the community. No institution can prosper in the long run unless it enjoys the esteem and support of the public, and trade unions can never win the needed esteem and support merely by devoting themselves to getting more and more for the best-paid workers in industry.