When the Teamsters and the Service Employees International Union broke away from the 13-million-member AFL-CIO earlier this week, it marked the biggest shake-up in the labor movement in several generations, spawning a world of speculation about what it all means.
The truth is, nobody knows.
One would think that a major split of this nature would further weaken organized labor, which has been in decline for many decades. At its zenith in the 1950s, about 30 percent of the nation's workforce was unionized; that slid to less than 20 percent in the 1980s, then to about 12.5 percent today. The two breakaway unions represent 2.5 million workers and pumped $20 million annually into the AFL-CIO till.
Considering the direction it was going, the breakup may not be as disastrous to the labor movement as many people think. What have they got to lose?
Both the Teamsters and the SEIU blame the most recent membership skid on John Sweeney's leadership of the labor federation. Sweeney, critics said, is putting too much emphasis on politics - that is tieing Big Labor too tightly to the Democratic Party - and not enough on organizing and recruiting new members.
Organizers have found the high-tech, information-age industries and the low-tech retail industries, such as Wal-Mart, particularly hard nuts to crack. Is that because the AFL-CIO didn't try hard enough? Or is it because those workers, for whatever reasons, feel they're better off without union representation?
Well, now we're about to find out. If the Teamsters and SEIU are right, then they should start being more successful in their organizing efforts - and that could spell trouble for businesses and employers across the country, and not just for the big fish such as multinational corporations and big-box retailers.
Union contracts are inflationary, forcing consumers to pay more for goods and services, and they tend to bind companies to labor and pension deals that they can't afford. Look at how Big Labor has crippled General Motors' ability to compete and make money.
On the other hand, if the breakaways are wrong, the split simply will further divide and weaken Big Labor's clout, and that could be good news for consumers and the economy.
We'll just have to wait and see how things turn out. But this much is certain: Whether they're united or divided, unions will still stand behind the Democrats, but if more of their manpower and financial resources are poured into organizing and recruiting, then there will be less available for politicking. That can't be good news for Democrats, but it might be for Republicans.
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