A Wake Up Call For Business

The Teamsters' win means that workers can no longer be taken for granted

Pilots for Delta Airlines don't face contract talks until 2000. But borrowing a page from the successful strike by the International Brotherhood of Teamsters against United Parcel Service Inc., the Delta Airlines Pilot Assn. is considering starting "informational picketing" to try to win public support for their demands even before sitting down at the bargaining table. The Teamsters' victory, says pilots union President Dennis Dolan, "has given us a sense of empowerment."

Dolan is not the only one worked up over the UPS settlement. In union halls, lunchrooms and corporate boardrooms, workers and bosses are probing for the lessons of the UPS strike. For in the tentative agreement reached in the wee hours of Aug. 19, the Teamsters did more than pull off a surprise victory--winning on core demands for higher wages, better pay for part-time workers, and more full-time jobs (table).

More important than the union victory is the way the Teamsters' campaign captured what seems to be a new mood in America. For the first time in nearly two decades, the public sided with a union, even though its walkout caused major inconveniences. Polls showed the public supported the 185,000 striking UPS workers by a 2-to-1 margin over management. The message: After a six-year economic expansion that has created record corporate profits and vast wealth for investors, Americans are questioning why so many of their countrymen aren't getting a bigger piece of the pie.

The UPS strikers--most of them part-timers--became a symbol for all the workers living off part-time and temporary work or stuck in low-skill jobs where the blessings of the "new economy" aren't apparent. "If I had known that it was going to go from negotiating for UPS to negotiating for part-time America, we would've approached it differently," said a rueful John W. Alden, UPS vice-chairman, after the strike ended.

What's in store for business now? Coming as it does when labor markets are tight, the UPS deal could be the event that gives workers the confidence to demand a little bit more in their paychecks, better job security, or more generous benefits. "This agreement has opened the window once again on the issue of wages and benefits for the working people who haven't yet participated in this recovery," says former Labor Secretary Robert B. Reich.

That doesn't mean that corporations will soon lavish big raises on workers--In an economy that doesn't tolerate inflation, they can't. But business leaders paid careful attention to the strike and the issues it brought forth. "Most companies have been thinking about it," says Gary A. Ray, head of human resources at California homebuilders Kaufman & Broad. As a result, what have become routine practices in the '90s--downsizing, outsourcing, shifting work from permanent employees to part-timers and temps--may come under fresh scrutiny.

With good workers increasingly hard to come by, some policies may have to be revised. For example, concludes Ray, "If it is of strategic interest to have a stable workforce, then you should probably provide benefits to part-time workers." Thomas Kochan, a management expert at Massachusetts Institute of Technology, says such a rethinking is long overdue. "Human resources departments have lost sight of the full workforce," he says.

That's not true everywhere, of course. Long before the UPS strike caught the public's attention some companies were introducing policies to make life easier for low-skilled workers and the part-timers they rely on increasingly. Companies want the flexibility of part-time workers but not the headache of constantly hiring and training new ones. So, at Burger King Corp., for example, management has incentives to keep workers. It offers medical, dental, and company-paid life insurance to part-timers who have worked 30 hours a week for 6 months. Marriott Corp. offers low-income workers assistance in dealing with problems from finding day care to stopping alcohol addiction and domestic abuse. The company even extends stock options to the lowest-level workers.

Companies that don't pay attention to the concerns of the 23 million part-time and temporary workers employed in the U.S. could face an emboldened union movement after the UPS win. Already, in virulently anti-union Silicon Valley, organized labor is making new inroads. Five unions recently added 2,000 new members there in just six weeks. According to Amy B. Dean, a local AFL-CIO leader, 27% to 40% of workers in the Valley fall into the contingent worker category--part-timers and temps who now seek improved pay, benefits, and job security.

Intense efforts to organize lower-wage workers and part-timers are under way across the U.S. In California and Washington state, the Teamsters and United Farm Workers unions are trying to organize strawberry and apple pickers and warehouse workers. The Hotel Employees & Restaurant Workers are organizing casino workers in Nevada and Connecticut. The United Food & Commercial Workers are picking off workers at Noah's New York Bagels in Berkeley and Borders Books and Music stores.

That's not to say, despite the post-settlement boasts by union leaders, that the Teamsters' victory will revive a labor movement that's been in decline since President Reagan fired 11,500 air-traffic controllers in 1981. Union membership, now 14% of the workforce, is unlikely ever to bounce back to the 20%-plus levels of the 1970s.

Indeed, many business executives figure that the UPS deal won't change their relations with workers at all. Companies will fight to keep the flexibility that they achieved in the past decade to dictate where, when, and how to produce products and services. At Chrysler Corp., for example, Executive Vice-President Dennis K. Pawley calls a $438 million, 28-day strike by auto workers that the company endured at a Detroit engine plant in April "an investment." The payoff: Chrysler retained the right to outsource work. He figures the Teamsters' victory against UPS will be forgotten "in a week or two."

That's certainly not what organized labor has in mind. The Teamsters' victory, says Steve Babson, an historian at Wayne State University's Labor Studies Center, will likely stand as a model. "It gives people a sense of the possible and shows them that they're not always simply victims," he says. The unions will do everything in their power to make that feeling last.

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