Mike Rosen: Labor Day then and now

Rocky Mountian News column ^ | September 2nd, 2005 | Mike Rosen

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Other than a three-day weekend, most Americans don't give much thought to what they're supposed to be observing on Labor Day. In practice, it's become little more than the unofficial celebration of the end of summer. Back in 1882, when New York City's Central Labor Union inaugurated the holiday, the labor movement was quite a different thing than it is today.

Once upon a time, workers had valid grievances regarding pay, hours, conditions and safety. Unions served a positive role in leveraging the collective influence of their members to pressure management to redress those grievances. But labor unions are political animals, and politics is about power and the preservation of it. If you're a union leader and you want to continue being a union leader, you can't allow yourself to be outbid by some firebrand rival who's promising the rank and file more. So it's the nature of unions to keep pushing.

After they achieved their legitimate objectives, they didn't know when to stop. During the heyday of organized labor when strikes were common, companies too often gave in to unreasonable demands to buy short-term labor peace, believing they could pass the higher costs on to customers. In the union mentality, automation and productivity were bad because they threatened established jobs. Union work rules saddled management with crippling inefficiencies. As global competition increased, consumers took advantage of international alternatives. Inevitably, push came to shove, and union greed and obstructionism brought companies and industries to their knees. Autos and steel where especially hard hit. Economic reality set in. Then the tide turned. Perhaps the symbolic sea change occurred when Ronald Reagan refused to be blackmailed by the air traffic controllers' union and fired illegal strikers early in the 1980s.

In 1970, work stoppages involving 1,000 workers or more accounted for 2.5 million striking workers, resulting in more than 52 million idle work days. In 2002, that was down to only 46,000 striking workers, with just 660,000 idle workdays. Strikes have become increasingly counterproductive and unsuccessful for union workers.

The structure of unionism today bears little resemblance to its past. Fifty years ago, 32 percent of the nation's work force was employed in factories, a traditional union stronghold. Today, only 11 percent of workers hold factory jobs, although factory output has grown by 200 percent. Why? Productivity. Factory employment has held steady at 15 million jobs over that period while output has tripled. Productivity gains have benefited companies, shareholders, consumers and workers still employed in those industries. The alternative was still fewer jobs as companies folded at the hands of more productive competitors. Productivity may have depleted union membership rolls but it's been vital for a healthy, dynamic, growing economy.

The only growth area for unions in recent decades has been in government employment. Since 1984, private sector union membership has dropped from 11.7 million to 8.2 million, while public sector union membership has grown from 5.7 million to 7.3 million. In 1984, two-thirds of unionized workers were in the private sector; one-third was employed by government. In 2004, the total union pie is almost evenly split with 53 percent employed in the private sector and 47 percent employed by government.

In 1955, union members made up 33 percent of the work force. In 2004, that's down to only 12 percent. In 1984, 16 percent of private sector workers were union members; today it's down to only 8 percent, while 36 percent of government workers belonged to a union in 2004, two-thirds of whom work for local government, most notably in education.

This isn't surprising. It underscores a big difference between the private and public sectors. Private companies have to compete; governments have monopolies. Private companies can't force their consumers to pay higher prices; government can impose taxes. Inefficient or uncompetitive private companies go out of business; government can't go out of business. That places a negotiating constraint on rational private-sector unions who don't want to strike themselves out of a job. But when government employee unions negotiate with management, they know that politicians are at the top of their food chain and that they have tax collectors and bond issuers standing behind them to raise the money. The most powerful union in the county today is the National Education Association, representing educrats. They routinely have more delegates to the Democratic National Convention than any other group. This is no accident.

Mike Rosen's radio show airs daily from 9 a.m. to noon on 850 KOA.

http://www.850koa.com/shows/rosen/index.html