Verizon's Crash Course In High Tech Unionism

In the late 1950s, Harry Bridges, the radical leader of the West Coast longshoremen, reluctantly cut a deal with the big shipping companies. They could introduce containerization and automate the docks; Bridges would absorb the job cuts, dividing his union into permanent dockworkers with class-A union cards and casual laborers with class-B cards. The class-A workers would share the gains of automation, but their ranks would dwindle. Bridges declared: "By the year 2000, there will be one longshoreman left on the West Coast. But he's going to be the best-paid son of a bitch in the United States."

A whole generation of unionists settled for this strategy: protecting senior unionized workers, knowing that their numbers would diminish over time. The Information Economy would seem to intensify the isolation and decline of unions. New Economy entrepreneurs, by embracing flexibility, technology, and teamwork, are displacing Old Economy companies that are more hierarchical, labor-intensive, and unionized.

But not so fast. The successful strike by two unions against Verizon Communications, the merged entity of Bell Atlantic, GTE, and Vodafone, suggests more overlap between the New and Old Economies than we thought. And the unions now recognize that allowing incumbent workers to be bought off at the expense of the unions' future is a losing game.

BAD ASSUMPTION. The successors to the old Bell system, including Bell Atlantic, AT&T, and SBC, assumed that as they merged with largely nonunion cable and cell-phone companies, the nonunion parts of the combined enterprise would gradually supplant unionized units. But it hasn't quite worked out that way. In the case of Verizon, the result may be that unions gain a foothold in the virgin territories of broadband and wireless.

At Verizon, the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW) still represent some 53% of the approximately 250,000 workers. At SBC, the union percentage is even higher. The CWA is determined not to repeat its recent experience with AT&T, where the union share has dwindled to about 25% as AT&T has merged with cable and wireless companies. The new, mostly nonunion AT&T has taken an increasingly hard line with organized labor. AT&T executives have, in effect, disowned a contractual agreement that would let the CWA try to organize workers in the nonunion divisions, free of management interference. AT&T won't even cooperate with the arbitration that the contract mandates in the event of disagreements.

At the heart of the Verizon dispute was the unions' desire to have a fair crack at signing up nonunion employees in what used to be GTE and Vodafone. The company was eager to head off this strike, offering a five-year contract with generous wage increases. But the unions, sensing a real crossroads, struck over their right to pursue union contracts for cable and wireless workers. They won the right to unionize nonunion divisions once 55% of employees sign union cards. This is far easier than waging protracted battles with management over union representation.

TODAY'S ISSUES. The strike also dealt with other survival issues for the unions, such as limits on Verizon's ability to transfer work from union to nonunion units. Also in dispute are work-control and overtime issues--hot buttons in an industry where call-center workers are under pressure to service frustrated customers with only a two-second break between calls, and to follow rigid, often demeaning marketing scripts.

The distinction between Old Economy and New Economy was always something of a myth. In telecommunications, union installers, technicians, and customer-service reps perform essentially the same jobs as their nonunion counterparts, working with similar technologies. The main difference is that union workers enjoy greater job security and control of their work environment, and in many cases, better wages and benefits.

Management views these unions and their protections as a blight on flexibility. However, most of the economy's recent productivity gains reflect technological breakthroughs, not the downgrading of labor. How these gains are to be shared among managers, shareholders, customers, and employees is more about relative political power than economic or technical imperatives.

Unlike dockwork, telecommunications is adding jobs--which can be either union or nonunion positions. Only a few contracts ago, some IBEW locals were willing to make deals allowing management to downgrade operators' jobs in exchange for job security and pay hikes for technical workers. But both telecom unions now see that course as suicidal. Their willingness to strike--not over current workers' wages and benefits, but over the future of high-tech unionism--suggests a new chapter in labor relations and a surprising foothold into the Information Economy.

Happy Labor Day.