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Friday, February 1, 2002

Unions on the Run

Private-Sector Workers Don't Want Unions

In 2000 the rate of private-sector unionization in the United States was only 9 percent, a figure that has been falling precipitously since the early 1950s. John Sweeney became president of the AFL-CIO in 1995, when the private sector unionization rate was 14.9 percent, promising that he would reverse that decline. The rate has declined ever since, yet Sweeney still boasts that he will soon turn things around. The year 2001 doesn’t look good for Sweeney. In fact, it looks like 2001 was a banner year for workers who want to remain union-free. Coercive unionism in the private sector is on the run.

For example, last fall Sweeney and his cronies suffered two important, crushing defeats. On September 25 the voters of Oklahoma, by a 54-46 percent vote, approved a state constitutional amendment that made it the 22nd right-to-work state. Just eight days later, on October 3, 68 percent of the workers at Nissan’s assembly plant in Smyrna, Tennessee, voted to remain union-free.

The Oklahoma Story

Section 14(b) of the National Labor Relations Act (NLRA) permits states to ban “union security” clauses in employment contracts within their respective jurisdictions. Union security clauses force all workers in a firm in which a union has been certified as exclusive (that is, monopoly) bargaining agent to pay fees to the union as a condition of continued employment. Where union security exists, workers do not have a right to work for willing employers without buying permission from unions with monopoly bargaining privileges. In the 22 right-to-work states, which now include Oklahoma, the right of any willing worker to be employed by any willing employer is guaranteed. No union, even with monopoly bargaining privileges, may abrogate that fundamental right.

It is not hard to see why unions abhor right-to-work laws. If they are restricted to collecting dues from their voluntary members–forbidden to force unwilling workers to pay them for representation services those workers do not want–they will have much less money to play with than they otherwise would. Money is crucial to unions because in the face of falling unionization rates their only hope for long-run survival in the private sector is for politicians to change the NLRA in ways that will make it harder for workers to avoid unionization. To that end, the AFL-CIO and its constituent unions spent approximately $500 million in cash and in-kind electoral support of union-friendly politicians in the 2000 elections for president and Congress. In the Oklahoma right-to-work battle the unions spent approximately $15 million to defeat the proposed constitutional amendment, while the victors only spent $6 million. A majority of Sooners, it appears, are far too smart to yield to the blandishments of desperate union officials who, from now on, will have no forced dues from Oklahoma to play with.

The Nissan Story

The story in Smyrna, Tennessee, is even more devastating to the Detroit-based United Auto Workers (UAW). The UAW had 1.5 million active members in 1970. By July 2001 active membership had fallen to 733,000. The Big Three Detroit-based auto producers are all heavily unionized and have been since the 1930s. But they are rapidly losing market share to union-free auto producers that are largely foreign-owned, with plants located in the largely union-free south. The UAW needed to win this certification election at Nissan to establish an auto-industry outpost in the south and to set a precedent that it hoped would make southern workers less union-resistant. The vote against certifying the UAW as the monopoly bargaining agent wasn’t even close. Nissan workers rejected the UAW 68-32 percent.

The outcome is not surprising since Nissan workers in Smyrna make an average of $22 per hour without overtime. This is double what comparable workers in other industries earn in the South. Moreover, workers are becoming increasingly aware that union-free employment provides more job security than unions can offer. Unionized firms are impaired by the lack of ability to adapt to rapidly changing market conditions that have become common due to globalization of competition. Firms must be competitive to survive and flourish in the 21st century, and the unions impair competitiveness.

Robert King, a UAW official, said that the union’s loss “offers dramatic proof of the tremendous obstacles workers must overcome in the face of a hostile employer.” He just doesn’t get it. In 1989 the UAW lost its first certification election at Nissan by approximately the same decisive margin. It dropped attempts even to get an election in Smyrna in 1997 and again in 2000 for lack of worker interest.

The message seems clear: Nissan workers in Tennessee want to remain union-free. They want the UAW to go away; but, because it is so desperate, the UAW probably will continue to try to capture Nissan workers. The NLRA permits unions to harass workers and employers with certification elections and threats of certification elections indefinitely. Resources consumed in fighting these repeated attempts at hostile takeover are not then available to meet the challenges of competition. But unions don’t care about the costs they impose on others, even workers. They care only about their institutional survival and capturing more fee payers.

Despite the bad news for unions in Oklahoma and Tennessee regarding their continued collapse in the private sector, they continue to prosper in government employment where the unionization rate was 37.5 percent in 2000, up from 37.3 percent in 1999. The trend seems clear. Unionization in America is becoming a phenomenon by which government workers and their union leaders attempt to live at the expense of private-sector workers. I will address issues of government-sector unionization in my next column.

  • Charles Baird is a professor of economics emeritus at California State University at East Bay.

    He specializes in the law and economics of labor relations, a subject on which he has published several articles in refereed journals and numerous shorter pieces with FEE.