It's time for labor unions to change

This post was adapted from an essay in the January 6, 2018 edition of Rochester's Democrat & Chronicle.

In a guest essay in Rochester’s Democrat & Chronicle, local union leader Ove Overmeyer advocated

for strong trade unions to strengthen the negotiating position of today’s workers.  I couldn’t agree more.  With unemployment at an historic low, it’s the perfect time for labor to take advantage of their negotiating power through collective bargaining. 

Absent from this argument is any mention of how labor unions should operate in the 21^st Century, leaving me to speculate that Mr. Overmeyer would continue the approach unions pursued during the last century.  I would like to suggest that the union operating model, which is older than Bernie Sanders, is due for an update. 

The booming economy of the 1950’s created a middle class throughout the Midwest and northeastern US underpinned by union workers.  This was the culmination of a decades long battle where labor and business were adversaries.  Union leaders from Eugene Debs to Harry Bridges were jailed for activities that are legal today.

By the 1970’s, however, the impact of a new, more global economy called for a paradigm shift. Union wages and benefits added costs to the manufacture of finished goods that made US industry uncompetitive on a global scale. And so union membership has declined precipitously. In 1950, 25% of American workers belonged to a union. Today, the percentage is less than half that. And, tellingly the percentage among employees of private companies is 6.4% while over 34.4% of public employees are union members. 

If a business had seen such a precipitously decline in its fortunes, it would have to transform itself or face liquidation.  Instead, unions have resisted change.

I am puzzled. Why would anyone think that the 19th Century model honed to perfection 60 years ago will work now?

Further, Mr. Overmeyer’s call for unions to use their political power to advocate for higher minimum wages. This argument suggests a continuation of the entrenched warfare between management and labor and bypasses an opportunity for both unions and their members.

The greatest challenge businesses face today is lack of qualified workers. Manufacturing has become more high tech, requiring math and science skills. Such jobs are plentiful. Rather than advocate for higher minimum wages, unions should focus on training workers for higher paying jobs.  A well-trained workforce would add economic value, expanding the size of our economy.  Rather than fight for a larger share of a static pie, unions should help make the pie larger. 

Were they to position themselves as a solution by transforming into Centers for Human Capital Development, businesses would view unions as beneficial to their business rather than as an adversary.  If unions offered benefits – healthcare, 401K’s – to their members in addition to training matched to employers’ needs, their value proposition would be more attractive to prospective members. Everyone would be a winner: the employers, the employees and the unions. 

Isn’t it time?