Chapter 15 - The future of U.S. labor policy and industrial relations. The main contents of the chapter consist of the following: The history of government-promoted labor management dialogue, alternative directions for future national labor policy, collective bargaining agreement,...
Chapter 15 The Future of U.S. Labor Policy and Industrial Relations McGrawHill/Irwin An Introduction to Collective Bargaining & Industrial Relations, 4e Copyright © 2008 The McGrawHill Companies, Inc. All rights reserved 1 3 The History of GovernmentPromoted LaborManagement Dialogue • NationalLevel Committees There have been very few successful efforts at national level dialogue over labor policies in the U.S A number of national labormanagement committees have tried to change industrial relations practices • Industrial relations commissions issued reports in 1880, 1902, and 1915 • The 1915 commission cited the absence of industrial democracy and inadequate working conditions as two of the most serious social problems of the time This was used as background for New Deal legislation • Presidents Wilson and Franklin Roosevelt created war labor boards in WWI and WWII respectively The record shows little effect of national forums on collective bargaining, due in part to the decentralized structure and deepseated ideological differences 15 3 1 4 15 4 Local and Regional Government Dialogue Efforts • There have been a number of efforts to promote labor management dialogue at the local and regional levels These committees usually include labor and management as well as key community politicians Area committees have tended to grow out of economic crisis • Such as plant closings The committees mobilized resources to attract new business and encourage educational institutions to better respond to industrial needs 1 5 15 5 The Common Failure of National and Area LaborManagement Committees • Our participation in a variety of national and area labor management committees has left us with an uneasy feeling • None of the efforts has produced sufficient reforms to stem job losses or slow declines in union membership • None have changed the attitudes of employers ideologically opposed to unionization • None have produced a new coherent strategy to foster employee participation • None have produced a consensus over changes in national labor policy 1 6 15 6 Labor Policy Reform Efforts • American labor law does not change often or easily • The NLRA was only passed as one of the last major reforms of the New Deal It took the deep economic and social crisis of the Great Depression and fear that capitalism might be at risk to build support for passage of the legislation • In response to a wave of strikes, the Taft Hartley amendments to the NLRA were passed in 1947 to rebalance power Taft Hartley limited secondary boycotts, closed shop clauses, and other union actions deemed unfair • Union corruption produced the Landrum Griffen Act in 1959 Little change since then to U.S. labor laws 1 7 The Limits and Contributions of Labor Management Dialogue 15 7 • Participation in a variety of national and area labor management committees has led to ambivalent feelings about the contributions • None of the efforts stopped the job losses or slowed declines in union membership • None have changed the attitudes of employers ideologically opposed to unions or produced a strategy to foster employee participation • There is still no consensus about changes to the national labor policy • The decline of these networkbuilding forums is another worrisome development 1 8 15 8 The Dunlop Commission • An attempt was made to resolve the longstanding impasse over labor policy when the Clinton Administration took office in 1993 • A nationallevel Commission on the future of Worker Management Relations (known as the Dunlop Commission) was established Purpose was to recommend ways to update national labor policies to embrace competitiveness and improve workers’ standard of living • The Commission issued two reports, but the recommendations gained no support from business, labor, or government officials 1 9 15 9 Alternative Directions for Future National Labor Policy • There are three possible strategic directions for future national labor policy • One approach is to continue the policies of the last 20 years With an emphasis on deregulation • Another policy would be modest reform of the collective bargaining system • A third approach would seek more fundamental changes in national policies Changes beyond those currently used 1 10 15 Strategy 1: Reliance on Deregulation and 10 the Labor Market • One strategy for national labor policy would involve extension of the deregulation wave of the late 1970s Primary objective is to increase product market competition From 1960 to 1975, the number of employment regulations administered by the federal government grew three fold Except for the Family and Medical Leave Act and plant closing acts, there has been no major regulation since 1975 • The benefit levels in social welfare and employment programs were frozen, reduced, or conservatively enforced • Welfare benefits were dramatically reduced 1 12 15 Criticisms of a Market and Deregulation 12 Policy Approach • Reliance on market forces and deregulation presumes that the market will lead to outcomes society finds acceptable, which may not be the case Limited health care and the "WalMartization" of the U.S. are some criticisms • In the early part of the 20th century, the Institutionalists of the Wisconsin School articulated normative arguments against reliance on the market alone • They argued that labor was more than a commodity and that labor/management conflicts of interests are inherent and enduring • Competitive labor markets may leave too many workers in a weak bargaining position with employers and give workers too little job security Workers should accumulate “property rights” in their jobs and should be able to influence management in a democracy 1 13 The Potential Consequences of Further Declines in Union Membership 15 13 • If union representation continues to decline, management abuse of its power might eventually produce a more adversarial form of collective bargaining and conflict Unions could lose their capacity to innovate as their security declines Concerns over declining real wages, longer hours, and wage inequality are growing Declining unionization diminishes an important voice in political discourse 1 14 Costs to Workers of Adjusting to Economic Changes Any future labor policy must address the fact that union membership is heavily concentrated in the oldest and most mature sectors of the economy • These sectors are the most exposed to international competition Jobs will be eliminated due to technology, new products, and new business strategies Older workers may not be welltrained to fill the new jobs being created Transition could be painful, and many displaced workers may be forced to take lower wage jobs 15 14 1 15 What Will Be the U.S. Comparative Advantage in World Trade: Low Wages or High Skills? 15 15 The events that followed deregulation in the airline and telecommunications industries suggest that deregulation may reduce workers’ power to resist management's efforts to minimize labor costs • Deregulated industries have experienced widespread wage and work rules changes • Once competition increased, management often found it easier to cut labor costs with nonunion workers or outsourcing However, labor cost minimization may be selfdefeating as American firms competing on labor costs may not fare well in world trade • Yet market forces alone may not move employers toward a highskills strategy, and should be supplemented by labor policy 1 16 15 Strategy 2: Modest Reforms within the Current 16 Collective Bargaining System A second alternative for future labor policy is to actively support the types of modest reforms of traditional collective bargaining and labor law suggest by the Dunlop Commission, leading to: • Making it more difficult for employers to oppose unionorganizing efforts • Making it easier for a union to achieve a first contract • Easing restrictions on employee participation in nonunion settings • Providing alternative dispute resolution procedures to reduce the backlog and provide speedy decisions However, there is no reason to assume that this policy approach will be any more acceptable than it was in 1995 when the Dunlop Commission issued its recommendations 1 17 Strategy 3: A New Industrial Relations System 15 17 It may be time to open up labor law and related employment policies to a period of active experimentation and learning Over time, this can create an innovative industrial relations system A new system could provide valuable improvements in productivity and living standards, while providing equitable due process Elements in a new industrial relations system: • Strategic Level: Information sharing, worker participation and representation, crossfunctional consultations, and integration of industrial relations with business and technology strategies • Functional Level: Contingent compensation, employment security, and strong commitment to training and development • Workplace Level: Employee participation and flexibility 1 18 Beyond Labor Law: The Need to Integrate Labor, Economic, and Social Policies 15 18 • Implementing a new industrial relations system will require active support of federal and state policy makers As well as significant shifts of management and labor • Government Strategies Major reform of the NLRA • Current policy encourages the parties to begin in an adversarial proceeding • Legal restraints on participation of employees, supervisors, and middle mangers in decision making should be removed, since they conflict with contemporary decentralization of managerial decision making • Currently, the precarious status of supervisors gives them incentive to block workplace innovation 1 19 15 19 Changes in Other Government Policies The diffusion of the new industrial relations system should be accompanied by changes in other federal economic and social policies An extensive employment and training policy is needed for transitioning across employers or occupations Unemployment compensation should be modified to encourage the acquisition of new skills • Management Values and Strategies Management should accept a broad role for unions and workers in strategic decision making • Otherwise, poor relations and distrust will diminish productivity • A hostile climate will favor traditional adversarial relationships 1 20 State and Local Government Policies 15 20 • The impasse in labor policy at the national level has led to increased calls for action at the local and state government levels • This is consistent with the history of innovation in social and labor policy at the state and local level in the U.S., such as: The enactment of “living wage” ordinances in over 50 communities California enacted the first paid family leave act • These initiatives should serve as laboratories for experimentation and learning that can inform national policy debates in the future 1 21 The Role of Business Strategies • Business competition based on low labor costs undermines worker trust, flexibility, and adaptability Yet, many firms now are tempted to pursue a low wage strategy The lowwage strategy can divert management's attention from developing other comparative advantages Moving work to lower cost locations limits trust Mergers and takeovers that have only shortterm objectives have dysfunctional consequences on industrial relations 15 21 1 22 Technological Strategies 15 22 • Technological strategies that maintain managerial control and maximize labor savings lead to deskilled and unmotivated workers • More consistent with new industrial relations practices are “sociotechnical” approaches that use technology to decentralize decision making and upgrade skills This happens with the broadening of job tasks and blurring traditional blue and whitecollar distinctions • Economic pressures, and pressures from government and unions, may eventually induce management to make major changes 1 23 Broader Corporate Reforms 15 23 • Confidence in American corporations and their top executives fell to historic lows in the wake of scandals in recent years • Restoring confidence is a high priority for the economy • This may require providing employees with more opportunities to monitor corporate governance • To gain value from the employee’s knowledge requires rebuilding employee trust Employees must understand the risks they are taking in joining or staying with a particular firm 1 24 Union Strategies 15 24 • Labor leaders face a similar strategic choice regarding whether to support the diffusion of a new system of industrial relations • Labor leaders generally support worker participation and partnerships but they have not developed a clear strategy for promoting these initiatives • The reluctance of labor leaders to strongly support participation in decision making stems from leaders’ fears of cooption They will need to reassess their views and become more visible champions of innovations • Passive acceptance will not motivate workers or policymakers • A further decline in unionization would result • Union leaders will have to be capable of influencing decisions made at the strategic and workplace levels as well as collective bargaining 1 25 Broader Experiments: New Models of Employee Representation? 15 25 • The inability of unions to reverse membership declines even in the face of increasing resources devoted to organizing and a troubled employment environment are posing problems for the industrial mode of U.S. unions • To support labor mobility, unions will need to develop new capabilities and structures These are needed to satisfy workers’ needs for life long learning and skill retraining This would require unions to recruit members and maintain their membership over the full course of their careers • Modifications of union structure would allow movement across union jurisdictions over the workers’ careers 1 26 Summary 15 26 • The book began by presenting a normative perspective on work and employment relations • It presented a broad framework for analyzing industrial relations • The text explored how the strategic choices of the parties interact with environmental conditions to shape industrial relations • This chapter poses the strategic choices now faced by labor, management, and governmental decision makers regarding the future of industrial relations • The field of industrial relations has a connection between research, teaching, public policy, and private practice Fostering this tradition will help address the future .. .Chapter 15 The Future of U.S. Labor Policy and Industrial Relations McGrawHill/Irwin An Introduction to Collective Bargaining & Industrial Relations, 4e Copyright © 2008 The McGrawHill Companies, Inc. All rights reserved... Union corruption produced the Landrum Griffen Act in 1959 Little change since then to U.S. labor laws 1 7 The Limits and Contributions of Labor Management Dialogue 15 7 • Participation in a variety of national and area labor ... This is consistent with the history of innovation in social and labor policy at the state and local level in the U.S., such as: The enactment of “living wage” ordinances in over 50 communities