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Recessions and Labor Unions

It was reported Wednesday that in an attempt to save the 137-year old newspaper—and their jobs along with it—the Guild representing employees of the Boston Globe had agreed to dramatic wage and benefit concessions.  The Guild members, including about 700 editorial, business and advertising employees, will begin voting on Thursday, May 7, and are expected to approve the contract.

Among the concessions are substantial cuts in base salaries, mandatory unpaid furloughs, discontinuation of company-matched pension funds, and the loss of job security clauses.  It’s been reported that the New York Times, owner of the Globe, needs to slash expenses by $20 million annually.  It’s also been rumored that the Times intends to sell the Globe and is requiring these cuts to entice a buyer.

With a world recession, the collapse of the U.S. housing bubble, and twenty-five years of unsound, unscrupulous and unregulated financial policy coming home to roost, organized labor leaders knew they were going to be in for a bumpy ride.  They weren’t wrong.  Not only are labor unions being punished by the recession, in many instances they are, predictably, being blamed for it.

Oddly, in a country that prides itself on fighting for what it believes in, people who don’t make a decent wage or have company-supplied medical insurance or a company-supplied pension are often critical of labor unions for striving to obtain those things.  It’s a confounding dynamic, one that can’t be explained away entirely as simple envy or resentment.

Rather than saying, “Gee, we should be like you guys, and fight to have a better standard of living,” they seem to think that because they never had those perks (or had them once, but saw them taken away), you shouldn’t have them either, and that your having them somehow causes an “imbalance.”

These people believe the propaganda that says society can’t afford a thriving middle-class, that we need a disproportionate number of victims at the bottom, people to prop up the rest of us, pyramid-style.  They’re the same ones who object to a journeyman plumber making $30 an hour, but don’t blink an eye at a hedge fund manager making $3 billion in a single year by manipulating money.

Given that every manner of investment portfolio has tanked—from massive institutional pension funds, to credit unions, to individual stocks and personal 401(k) accounts—and given that the systemic apparatus that set the whole banking debacle in motion is still as squirrelly as Hogan’s goat, it’s unlikely (despite Wall Street’s rah-rah cheerleading) that things will look up anytime soon.

It’s not only the financial giants, retailers, auto manufacturers and media that have been hit; the nation’s non-profit service sectors are also struggling, with state and municipal governments across the country scrambling to make their payrolls.  Teachers, police and firefighters are facing lay-offs.  Jobs that, typically, were considered “immune” to economic downturns are now in jeopardy.

Still, as bad as things are for union workers, they are substantially worse for non-union workers.  At least union folks have the cushion of falling back on better-than-average wages, benefits and severance packages, and having contract language in place that spells out exactly how lay-offs and recalls will be administered, which removes the fear of being booted out the door arbitrarily by panicky or unprofessional bosses.

Of course, recessions are also opportunities.  Just as businesses having little to do with the price of gasoline nonetheless raised their rates when gas hit four dollars a gallon, companies that are relatively unaffected by the recession are going to use the weak economy as an excuse to squeeze every dime out of their employees.  That’s the way it works.

When a union committee sits down with a management team during a recession or a downturn in the industry (or a devastating company slump, e.g., the Boston Globe), they fully expect to encounter World War III, and they’re rarely disappointed.  They get bombarded with charts and graphs and long rows of alarmingly dwindling numbers.

And it’s not only numbers.  Just as a ship will seek any port in a storm, management will use any argument or reference point that bolsters their position.  For example, at this very moment, the LAUSD (Los Angeles Unified School District) is battling with the teachers’ union over a proposed one-day strike, scheduled for Friday, May 15, to protest District cuts.

In a letter to the teachers, Superintendent Ramon Cortines used a three-pronged attack: he appealed to their sense of responsibility, reminding them that standardized testing was still going on (although students aren’t tested on Mondays or Fridays, which is why the union chose that day); he threatened the teachers with an injunction; and he made reference to the swine flu. Yes, the he actually resorted to the swine flu as part of his pitch.  Again, any port in a storm.

But what happens when the converse is true?  What happens at the bargaining table when the economy is flourishing, the industry is prospering, and the company with whom you’re negotiating is more or less raking in the money?  Answer:  Very little changes.

There’s a term used in labor relations called “whipsawing.”  This refers to the management practice of intentionally pitting one plant or sector against another, as a means of keeping wages down.

Pitting one group of workers against another makes sense in a grim, Machiavellian sort of way.  After all, a company whose exorbitant annual profits are boldly splashed across the front page of the Wall Street Journal can’t very well go to the bargaining table and, with a straight face, argue that they can’t “afford” to give the hourly workforce a decent raise.

Instead, what they do is divide and conquer.  They say that, while the corporation as a whole is doing quite well, the facility whose contract is being negotiated is not doing as well.  In fact, if the workers want to continue to have a place to work, they’re going to have to find ways of lowering costs in order to remain competitive.  And one of those ways—indeed, the only really surefire way—is to keep the hourly wages in check.

So they hammer you when there’s a national recession, even though your industry is doing well; they hammer you when your specific industry is struggling, even though the national economy is strong; and they hammer you when things are flush, when everything is good, by playing one facility against another, looking for an edge.

In truth, they’ll use anything—Hurricane Katrina, the swine flu, the price of oil, the GNP of Venezuela, anything!—to avoid parting with their money.  The only statement you’ll never hear uttered at a contract bargain is, “You’re in luck, boys!  Because we’re rolling in dough, we’ve decided to give you that big raise you deserve.”  America will colonize Mars before that’s ever said.

DAVID MACARAY, a Los Angeles playwright (“Americana,” “Larva Boy”) and writer, was a former labor rep.  He can be reached at dmacaray@earthlink.net

More articles by:

David Macaray is a playwright and author. His newest book is How To Win Friends and Avoid Sacred Cows.  He can be reached at dmacaray@gmail.com

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