A Sock in the Eye for Labor

Unions took an especially heavy hit from September 11

Like many other Americans, labor leaders are worried about the recession and the economic fallout from September 11. Gathering in Las Vegas for the AFL-CIO's biennial convention the week of Dec. 3, they had plenty to fret about. Indeed, unions have more cause for concern than most, since the events of 2001 have battered them harder than almost any other group in the country. No one is more upset than AFL-CIO President John J. Sweeney, who has been losing his six-year crusade to inject new life into the U.S. labor movement.

Of the 760,000 or so job cuts announced since September 11, the AFL-CIO estimates that roughly 50% have involved union members. That's nearly four times organized labor's 13.5% share of the U.S. workforce. The loss comes largely because unions are disproportionately employed in the hard-hit airline and aerospace industries. And even before September 11, the economic downturn struck first and hardest in manufacturing, another labor stronghold. That too has whacked tens of thousands of union jobs.

All of which is making Sweeney's task much harder. True, union membership had stopped its decades-long free-fall during the boom years. And some unions--particularly auto workers racing to produce record numbers of vehicles--have yet to take much of a hit. But the current broad meltdown wipes out any prospect of real growth in labor's ranks. The loss of dues-paying members will also crimp union budgets, making recruitment efforts more difficult. It could make bargaining harder, too, if it emboldens management in recession-hit industries to demand greater concessions. Sweeney, who was due to be reelected to another four-year term on Dec. 6, vows to redouble his efforts. "If we're confronted with heavier layoffs, we'll just have to make more efforts to organize new members," he says.

Still, the setback sheds a harsh light on just how much difficulty Sweeney has had in prodding lumbering unions to change. Ever since he took office in 1995, Sweeney has told unions that they will grow again only if they drastically overhaul their approach. He argues unions must devote at least 30% of their budgets to recruitment, up from the less than 5% typical today.

But most unions still haven't made the tough decision to shift resources from servicing current members to recruiting new ones. Just 24 of the 66 unions in the AFL-CIO have increased their ranks in the past two years, according to federation figures. Some of this growth stemmed from union mergers or from hiring by already unionized employers during the late-1990s expansion. Elections to vote on union representation haven't increased since 1995. Only a dozen or so unions focus on organizing, AFL-CIO officials say, and many of those had been doing so before Sweeney took office. "Except for a few unions, the commitment is still not there," says former AFL-CIO Organizing Director Richard Bensinger, who now consults with several unions.

STEEL-GRAY. \Labor's prospects aren't likely to brighten while the economy remains in the doldrums. Unions representing public employees are bracing for layoffs caused by shrinking state budgets, says Service Employees International Union President Andy Stern, who represents many of those workers. At the same time, the pressure on manufacturing, where labor still has above-average membership, shows scant sign of a turnaround. More jobs will be lost, for example, if the steel industry is allowed to consolidate, as USX Corp. and Bethlehem Steel Corp. called for on Dec. 4. Unions also may lose ground if sales turn down in autos, as many expect.

The pressure to bring down labor costs will continue, too. "Even when the pickup comes, there will be a lag before the [wage] concession demands slow, as companies wait to see if it's real," says Patrick J. Cleary, human resources vice-president at the National Association of Manufacturers.

Much of labor's growth since 1995 has come among public workers, who had been signing up for years before Sweeney took over. Private-sector unions have generally failed to capitalize on the prosperity of the late 1990s, when jobs proliferated and cost pressures were at a minimum. Now the job of union building will only get tougher.

By Aaron Bernstein in Washington

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