Organized labor’s continued pursuit of a strategy created in the early-mid 20th century has decimated—and will eventually finish off—organized labor’s remaining influence in the 21st
century. Labor’s influence increased dramatically starting the 1920’s,
peaked in the 1950’s, and is now at its weakest level in more than a
century.
Source: http://unionstats.gsu.edu/
The private sector labor movement is dying. The 20th century model of labor unions destroys the employees in the 21st century. The 20th century model writes work rules that prevent the worker from performing multiple tasks. The 20th century model creates very high overtime costs or forbids working more than a set number of hours. The 20th century model couples high pensions with extracting as much immediate monetary compensation for the worker as possible, creating a burden that puts a company at a disadvantage compared to its non-union rivals. This model dooms the 21st century employee because it prevents employees from being flexible, autonomous, and skilled in a variety of tasks. Instead of negotiating for training that would enhance a worker’s productivity and marketability, unions negotiated for a compensation and work rules package that emphasizes the wrong set of benefits.
Devoid of revenue, unions turned to the growing government sector to maintain at least some level of support. At face value, this strategy would seem to make sense. A union shop can go bankrupt when faced with non-union competition, but a city/state/country has plenty of revenue streams and almost no competition. However, this strategic shift was a mistake. A unionized government sector combined with shrinking private sector influence places the unions on the opposing side of the general public.
2009 was the first time government sector employees exceeded the number of private sector employees.1 This is a psychological tipping point for the general population. For example, when the Department of Labor or the AFL-CIO tries to sell the labor movement to the general public, they use graphs such as this one:
Source: http://www.aflcio.org/Learn-About-Unions/What-Unions-Do
This graph appears to be a selling point. The hope is that the public might think, “If only I were in a union, then I would be making more money.”
However, once the tipping point between government and private sector employees has been reached, the labor movement is painted in a completely different light. The public begins to think, “Look at all the government employees taking money from my paycheck, working fewer hours, taking more vacation days, and making more than me.” Equating unions with public employees will continue to push public opinion against the labor movement.
Turning to the public sector allows the dinosaur labor model to survive, with no innovation necessary. However, the labor unions are now on the other side of the negotiating table from taxpayers. Every dollar is extracted from taxpayers’ pockets. Additionally, unions want trade barriers, which also harm the public. This creates a tight spot for the unions. An entirely different marketing strategy must be adopted. How do you not get everyone to hate you?
At this point the labor movement is left to appealing to emotion. In the last decade this message has distilled into two forms, a positive and negative message. The positive message focuses on a positive emotional tie to the public. For example, “[Insert public occupation with positive image] are priceless!” Regardless of performance or current rate of pay, vacation, hours, etc., more funds are needed. The other message is to marginalize or demonize opponents. For example, “[Insert political target or wealthy] hate [public occupation from first message].” Maintaining these two types of messages is costly and can still lose in the long run as the public realizes that a zero-sum game is essentially in effect.
What Other Option is Available?
First, a successful labor movement strategy must include the private sector in order to avoid the trap outlined above. Second, a successful strategy must prepare its members for employment in the 21st century. This means that its members must learn to be flexible, autonomous, and skilled in a variety of tasks. In the long run, the labor movement will die out in the private sector if this is not the case. Non-union corporations will drive out the union corporations with greater productivity and better talent. Third, the labor movement must identify areas where it can utilize its core competencies of leverage and employee goodwill.
It is not in the best interest of a company to provide skills and training to employees that are not directly applicable to their current position and that would make the employees more marketable to outside firms. However, a worker needs to continually expand her skill set to succeed in the 21st century. The labor movement would be in an ideal position to bridge this gap.
Instead of the anti-productivity slogan “People over profits!” the labor movement can adopt the pro-productivity slogan “Promoting people promotes profits!” This can be accomplished by the union voluntarily tying one of its hands behind its back. The union can reserve the right to represent, intercede on behalf of, and provide a channel of grievance from the employee, but the union can also include in its charter that it does not reserve the right to negotiate compensation or work rules. The union does not even need to refer to itself as union, but rather as a learning and training federation. The union can negotiate training funding and hours during the work day for training from the corporation, while at the same time requiring nominal union dues from members who wish attend the training. Employees will enjoy the break from work and appreciate the training and skills. The outcome for the corporation may be neutral or positive, as training and employee morale increase productivity. The labor movement can continue to live up to its mission as the supporter of “the working man/woman.” The public enjoys a positive economic benefit from a workforce that enjoys lifelong training and improvement. The transformation of the union into an educational enterprise will produce the positive message and impact that the public needs and wants.
“Promoting people promotes profits” is a radically different approach from the current strategy. However, the current trajectory of the labor movement will leave a handful of legacy industries and public servants demanding the general public to pay up and implement net negative economic policies. A positive transformation and strategic shift will create a lasting labor movement for the 21st century.
1http://www.bls.gov/news.release/archives/union2_01222010.pdf.
Source: http://unionstats.gsu.edu/
The private sector labor movement is dying. The 20th century model of labor unions destroys the employees in the 21st century. The 20th century model writes work rules that prevent the worker from performing multiple tasks. The 20th century model creates very high overtime costs or forbids working more than a set number of hours. The 20th century model couples high pensions with extracting as much immediate monetary compensation for the worker as possible, creating a burden that puts a company at a disadvantage compared to its non-union rivals. This model dooms the 21st century employee because it prevents employees from being flexible, autonomous, and skilled in a variety of tasks. Instead of negotiating for training that would enhance a worker’s productivity and marketability, unions negotiated for a compensation and work rules package that emphasizes the wrong set of benefits.
Devoid of revenue, unions turned to the growing government sector to maintain at least some level of support. At face value, this strategy would seem to make sense. A union shop can go bankrupt when faced with non-union competition, but a city/state/country has plenty of revenue streams and almost no competition. However, this strategic shift was a mistake. A unionized government sector combined with shrinking private sector influence places the unions on the opposing side of the general public.
2009 was the first time government sector employees exceeded the number of private sector employees.1 This is a psychological tipping point for the general population. For example, when the Department of Labor or the AFL-CIO tries to sell the labor movement to the general public, they use graphs such as this one:
Source: http://www.aflcio.org/Learn-About-Unions/What-Unions-Do
This graph appears to be a selling point. The hope is that the public might think, “If only I were in a union, then I would be making more money.”
However, once the tipping point between government and private sector employees has been reached, the labor movement is painted in a completely different light. The public begins to think, “Look at all the government employees taking money from my paycheck, working fewer hours, taking more vacation days, and making more than me.” Equating unions with public employees will continue to push public opinion against the labor movement.
Turning to the public sector allows the dinosaur labor model to survive, with no innovation necessary. However, the labor unions are now on the other side of the negotiating table from taxpayers. Every dollar is extracted from taxpayers’ pockets. Additionally, unions want trade barriers, which also harm the public. This creates a tight spot for the unions. An entirely different marketing strategy must be adopted. How do you not get everyone to hate you?
At this point the labor movement is left to appealing to emotion. In the last decade this message has distilled into two forms, a positive and negative message. The positive message focuses on a positive emotional tie to the public. For example, “[Insert public occupation with positive image] are priceless!” Regardless of performance or current rate of pay, vacation, hours, etc., more funds are needed. The other message is to marginalize or demonize opponents. For example, “[Insert political target or wealthy] hate [public occupation from first message].” Maintaining these two types of messages is costly and can still lose in the long run as the public realizes that a zero-sum game is essentially in effect.
What Other Option is Available?
First, a successful labor movement strategy must include the private sector in order to avoid the trap outlined above. Second, a successful strategy must prepare its members for employment in the 21st century. This means that its members must learn to be flexible, autonomous, and skilled in a variety of tasks. In the long run, the labor movement will die out in the private sector if this is not the case. Non-union corporations will drive out the union corporations with greater productivity and better talent. Third, the labor movement must identify areas where it can utilize its core competencies of leverage and employee goodwill.
It is not in the best interest of a company to provide skills and training to employees that are not directly applicable to their current position and that would make the employees more marketable to outside firms. However, a worker needs to continually expand her skill set to succeed in the 21st century. The labor movement would be in an ideal position to bridge this gap.
Instead of the anti-productivity slogan “People over profits!” the labor movement can adopt the pro-productivity slogan “Promoting people promotes profits!” This can be accomplished by the union voluntarily tying one of its hands behind its back. The union can reserve the right to represent, intercede on behalf of, and provide a channel of grievance from the employee, but the union can also include in its charter that it does not reserve the right to negotiate compensation or work rules. The union does not even need to refer to itself as union, but rather as a learning and training federation. The union can negotiate training funding and hours during the work day for training from the corporation, while at the same time requiring nominal union dues from members who wish attend the training. Employees will enjoy the break from work and appreciate the training and skills. The outcome for the corporation may be neutral or positive, as training and employee morale increase productivity. The labor movement can continue to live up to its mission as the supporter of “the working man/woman.” The public enjoys a positive economic benefit from a workforce that enjoys lifelong training and improvement. The transformation of the union into an educational enterprise will produce the positive message and impact that the public needs and wants.
“Promoting people promotes profits” is a radically different approach from the current strategy. However, the current trajectory of the labor movement will leave a handful of legacy industries and public servants demanding the general public to pay up and implement net negative economic policies. A positive transformation and strategic shift will create a lasting labor movement for the 21st century.
1http://www.bls.gov/news.release/archives/union2_01222010.pdf.
