Big Labor's Day of Reckoning

As a critical confab nears, how far is the AFL-CIO willing to go to stem its decline?

What if you turned on the tube and saw a labor-run news and entertainment network with shows extolling the benefits of labor unions? Or scores of sit-down strikes erupting around the country in a national campaign to form new unions at Wal-Mart (WMT ) or McDonald's (MCD )?

These are just two of the ideas unions have tossed out in recent weeks in an extraordinary internal debate that is gripping the U.S. labor movement. The soul-searching was kicked off last autumn by Andrew L. Stern, president of the Service Employees International Union (SEIU). He challenged his fellow union chiefs to take drastic measures to reverse labor's decades-long decline. Stern's prodding, coming from the nation's largest and fastest-growing union, provoked a wide-ranging discussion unlike any the labor movement has engaged in since the AFL-CIO was founded 50 years ago.


The outpouring of proposals from dozens of labor groups will be on the table when the AFL-CIO's governing Executive Council gathers on Mar. 1 in Las Vegas for its annual winter meeting. While union leaders say they may not reach a full agreement by then, most think a broad consensus is emerging about major changes labor should undertake to try to boost its flagging clout and membership. Among the most likely: significantly scaling back the AFL-CIO's staff and budget; boosting its already powerful political efforts; and slashing the unwieldy 54-member Executive Council. "There will be substantive changes," predicts Gerald W. McEntee, president of the 1.4-million member American Federation of State, County & Municipal Employees.

One wild card is whether anyone will announce a challenge to President John J. Sweeney, 70, who'll be up for reelection at the AFL-CIO's quadrennial convention in July. For months labor leaders have been expecting Stern ally John W. Wilhelm, the No. 2 official at UNITE HERE, the needle-trades and hotel workers' union, to announce his candidacy at the Las Vegas meeting. But he hasn't yet gathered enough votes, say leaders on both sides, so he may decide not to provoke an open fight. "The next question is the leadership question," says Wilhelm.

Whatever he decides, the labor movement's basic structure will be hotly debated in Las Vegas. Sweeney came to office in 1995 vowing to focus shrinking unions on membership growth. His push ignited widespread enthusiasm in the movement for several years, but that energy faded as the effort produced disappointing results at many unions. While few unionists blamed Sweeney for their own failures, Stern, Wilhelm, and others insist he hasn't banged the table hard enough for reform. They and some other union presidents -- including even Sweeney supporters such as McEntee -- also complain that Sweeney has built up a 500-plus-person bureaucracy at the AFL-CIO that isn't aggressive enough in reversing labor's decline.


Matters came to a head in November when Stern issued a set of proposals to radically overhaul the AFL-CIO and its member unions. Sweeney struck back by calling on all unions to put forth ideas to be considered at the Vegas gathering. Delegates to the AFL-CIO's convention in July will then vote on any changes to its constitution.

In recent months many unions have held formal reviews of labor's problems and submitted some surprisingly creative ideas for solving them. The American Federation of Teachers, hardly a bastion of take-to-the-streets unionism, suggested that labor form startup unions from scratch that would have few assets. The reasoning: With little to lose, they would be bolder about using such illegal recruitment tactics as secondary boycotts or sit-down strikes. The Laborers Union, whose president, Terence M. O'Sullivan, is also the CEO of ULLICO Inc., a union-owned insurer, argues that labor should consolidate all its financial purchases and investments into a multibillion-dollar powerhouse. The goal would be to create a union-owned profit center that could earn money and amass financial clout by cutting out the legions of Wall Street insurance, credit-card, mortgage, and pension-fund providers now used by unions.

The most sensitive topic is likely to be the nature of the AFL-CIO. To highlight its unhappiness with Sweeney's tenure, the Stern camp is pushing a proposal to allow unions to keep half of the $90 million in dues they collectively pay the federation each year as long as they spend the money to sign up new members in their core industries. Despite the blow it would represent to Sweeney, the idea has been endorsed by several large unions, including the Teamsters and United Food & Commercial Workers. Even Sweeney backer McEntee says he supports the concept, though he thinks the amount of the rebate should be more like 30% or 40%.

In an attempt to control the debate, Sweeney plans to put forth his own set of proposals in Las Vegas. AFL-CIO officials have also been trying to limit the scope of any cutbacks by arguing that large chunks of its budget should be exempt from the dues-rebate scheme. "A lot of people think it's a good time to look at everything we do and be clear about areas where there might be redundancies," says Denise Mitchell, Sweeney's public affairs assistant. "But only a handful want to see a smaller and weaker federation."

The broader question is what the AFL-CIO's purpose and role should be. Wilhelm says the federation should focus almost exclusively on politics and organizing support. Others say it should continue to address everything from legislation to international affairs. The debate harkens back to the AFL-CIO's founding in 1955, when then-American Federation of Labor President George Meany said labor's central body should engage in politics, and the Congress of Industrial Organizations' Walter P. Reuther insisted that it should stick to bargaining and organizing. Meany prevailed, winning the presidency of the merged groups.

Despite the far-reaching nature of the discussion, it's not clear how much change labor leaders will embrace. More to the point, it may be too late to reverse labor's shrinkage, no matter what they decide to do.

By Aaron Bernstein in Washington

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