Labor Union.

Labor Union. I INTRODUCTION Labor Union, association of workers that seeks to improve the economic and social well-being of its members through group action. A labor union represents its members in negotiations with an employer over all aspects of an employment contract, including wages and working conditions. These contract negotiations are known as collective bargaining. By giving workers a united voice, a union can often negotiate higher wages, shorter hours, and better fringe benefits (such as insurance and pension plans) than individual workers can negotiate on their own. When an employer and a union cannot reach an agreement through the collective bargaining process, the union may conduct a strike (organized work stoppage). Or, an employer may prevent workers from entering the workplace in a lockout. In many countries, labor unions have official affiliations with political parties and seek to bring about social change through legislative and political action. In other countries, including the United States, no formal ties of this kind exist. The United States has a tradition of so-called business unionism, in which the main goal of the labor movement is to improve wages and working conditions. Unions in the United States, however, often engage in political activities. These activities include lobbying for legislation that furthers the aims of the labor movement and providing financial support to political candidates who are friendly to union causes. In the early 19th century all aspects of the employment contract, including wages and hours of work, usually resulted from direct negotiation between employers and individual workers. Because of the imbalance of power, such negotiations favored employers. Labor unions began to form in the 19th century to help relieve the damaging effects of industrialization on workers, especially the long hours and low pay that factory work entailed. The earliest organizations of workers in the United States appeared in New York City and Philadelphia, Pennsylvania, shortly before 1800. These organizations represented the crafts of printers and shoemakers. Social and political sentiment against unions was widespread in Europe and North America at first. Many governments considered unions to be illegal associations or conspiracies in the restraint of trade. However, after 1900 unions gained strength and governments began to make efforts to prevent industrial strife. The U.S. Congress began to pass labor relations laws in the 1930s, as part of the social and political reforms constituting the New Deal. These laws gave workers in the private sector of the economy the right to bargain collectively through a union. They also established procedures outlining how workers can select a union to represent them in the collective bargaining process, and they outlawed unfair practices by employers. Public-sector workers--government employees--began to gain most of these rights in the 1960s. Many public-sector workers, however, still do not have the right to strike. Prior to the 1930s, fewer than 13 percent of nonagricultural workers in the United States belonged to unions. By the early 1950s, about a third were unionized. A steady decline in union membership began in the 1960s, and the decline accelerated in the 1980s. In 2004, about 12.5 percent of wage and salary workers, or about 15 million workers, belonged to unions, according to the United States Bureau of Labor Statistics (BLS). The sharp decline in union membership in the private sector meant that only 7.9 percent of private-sector workers, about 8 million workers, were unionized in 2004, according to the BLS, which is part of the Department of Labor. The decline in union membership has also occurred in other developed countries. In Britain, the Trades Union Congress represents nearly 7 million workers, or about 30 percent of the nonagricultural workforce, but its power and membership declined during the 1980s and 1990s. In France, union membership fell by more than one-third from 1985 to 1995, and in 2000 unions represented less than 10 percent of wage earners there. Unions represented about 25 percent of Germany's nonagricultural workforce and about 65 percent of Italy's. This article deals primarily with unions in the United States. For information about the history, role, and organization of unions in Canada, see Labor Unions in Canada. For a history of the labor movement in the United States, see Labor Unions in the United States. II WHY WORKERS JOIN UNIONS In the United States, workers can become members of a union by voting to certify a union as their collective bargaining agent. Voting typically occurs after 30 percent of the workers petition for a certification election. The union wins the right to represent the workers if it obtains the votes of a simple majority (more than 50 percent) of the workers who will make up the bargaining unit. If the union wins the certification election, management has a legal obligation to bargain in good faith with the union chosen by the workers. Workers who become dissatisfied with their union representation can use the same process to petition for a de-certification election. Some states give workers the right not to join a union even if they work in a unionized establishment. These laws, called right-to-work laws, prohibit unions from requiring that workers become union members as a condition of employment in unionized firms. In 2000, 21 states had right-to-work laws. If agreement on the terms of the employment contract cannot be reached through collective bargaining, the union has the right to strike. A strike occurs when union members withhold their labor from the firm, effectively shutting down operations. The firm can also initiate a lockout, which prevents union workers from entering the firm's premises. The federal government can delay a strike action in industries considered vital to the public interest, such as railroads. It does so by ordering a coolingoff period, during which the workers must return to work. The cooling-off period typically lasts 80 days. Various factors influence the extent of union organization. The most important factors are the economic situation, the legal environment, and the success of union organizers. A The Economic Situation Because workers in the United States can freely choose whether to join unions, economists argue that workers will vote for certification only if the union can make the worker better off. However, improvements in employment conditions come at a cost. The union's demands--for higher wages, shorter hours, or more valuable fringe benefits--typically raise the firm's costs of production. These higher costs may encourage the firm to cut back on its employment, perhaps by laying off some workers or by subcontracting with cheaper labor markets in other states or countries. The transfer of union jobs to nonunion workers, a phenomenon known as the runaway shop, occurred in the textile industry during the 1950s and 1960s, when many New England textile manufacturers moved their factories from the unionized Northeast to the nonunion South. Today this phenomenon also occurs as outsourcing, in which an employer subcontracts work to a nonunion firm to lower labor costs. This potential reaction to higher labor costs can severely limit the extent of union power. Some unions, especially in the crafts, have negotiated contracts that prohibit such subcontracting. When considering whether to join a union, a worker must evaluate the tradeoff between better employment conditions and a higher likelihood of layoffs. From this perspective, a union has the greatest likelihood of success in an economic environment where the firm is least likely to respond to increases in labor costs. Firms that sell goods and services for which there are few substitutes, for example, typically can easily pass on cost increases to consumers and earn higher profits. These firms, which have some degree of monopoly power, usually can best afford to pay the increased costs of the union demands. B The Legal Environment The legal environment, which permits certain types of union activities and prohibits others, also influences the extent of union organization. States with right-to-work laws have much lower unionization rates than other states. In the United States, the states with the lowest unionization rates are North Carolina, South Carolina, South Dakota, and Arkansas--states that have right-to-work laws. In 2000 the unionization rate in these states ranged from 4.44 percent to 6.7 percent. The states without right-to-work laws and with the highest unionization rates were Alaska, Hawaii, Michigan, New York, and New Jersey, with rates ranging from 21.8 percent to 26.5 percent. Union political activity has succeeded in some areas in creating a legal environment that benefits both unionized and nonunionized workers. As a result many workers today, even those who do not belong to unions, enjoy the benefits that union members have. For example, most developed countries, including the United States, have enacted various forms of protective legislation to guarantee worker rights and provide standards for the workplace even in nonunion settings. Protective legislation sets minimum wages, maximum hours of work, and conditions for triggering overtime pay. Other forms of protective legislation limit workers' exposure to risky working conditions and hazardous substances and grant workers the right to receive unemployment compensation, disability insurance, and old-age pensions. Numerous laws in the United States and other countries, enacted from the 1960s on, prohibit employment discrimination on the basis of race, ethnicity, sex, age, and disability. Such legislation extends to the entire work force--unionized and nonunionized--provisions that are typically found in collective bargaining agreements. The extension of provisions that unions once fought for has lessened the incentive for today's workers to join a union. C Union Organizers Finally, the success of union organization depends on the ability of union organizers (union representatives who help workers form unions). Organizers inform workers of their rights and of the benefits of union membership, and organizers help workers take the necessary steps to hold a certification election. They also inform the public about issues affecting labor and inform the government of any violations of workers' rights on the part of employers. III TYPES OF UNIONS Traditionally, there have been two main types of labor unions in the United States: craft unions and industrial unions. A craft union organizes workers employed in the same occupation or craft, regardless of where they work. Examples include unions of electricians, carpenters, and printers. Craft unions descend from the guilds of printers and shoemakers that started the labor movement in the United States. The American Federation of Labor (AFL), which formed in 1886, became the country's first organization of craft unions. Samuel Gompers, leader of the cigar-makers union, served as the first president of the AFL. Under his leadership, the AFL set out a list of principles that guided the federation for many decades and that encouraged many of the national craft unions to join. The AFL gave each affiliated national craft union complete autonomy over its internal affairs and granted the national craft union exclusive jurisdiction over organizing workers employed in that craft. The second type of union, the industrial union, organizes all workers in a particular industry, regardless of the workers' crafts. Examples of industrial unions include the United Steelworkers of America and the United Mine Workers of America (UMW). These unions organize all workers in the steel industry and the mining industry respectively, regardless of the workers' particular tasks. The Committee for Industrial Organization, formed within the AFL in 1935 by UMW president John L. Lewis, sought to organize workers by industry, including unskilled workers. The committee was expelled from the AFL in 1938 and took the name Congress of Industrial Organizations (CIO), becoming the first federation of industrial unions in the United States. The expulsion stemmed from the conflict between the older craft unions, which claimed organizational jurisdiction over all workers in a particular craft, and the newer industrial unions, which organized all workers in a particular industry. In 1955 the two federations merged and formed the AFL-CIO as the central organization in the American labor movement. The head of the AFL at the time, George Meany, became the first president of the new federation. The traditional distinction between craft and industrial unions no longer provides a neat summary of the union situation in the United States because of changes in the economy and the political environment. Older craft and industrial unions mainly organized blue-collar workers in the private sector. The last decades of the 20th century saw increased organization of professional workers in unions such as the American Federation of Teachers (AFT) and the Professional Nurses Association. Many of these unions have grown rapidly. From 1971 to 1995 the membership of the American Federation of Teachers, for example, rose from 194,000 to 613,000. Unionism in the public sector has also grown rapidly, spurred by laws of the 1960s that extended the right to collective bargaining to government workers. From 1971 to 2000, the membership of the American Federation of State, County, and Municipal Employees (AFSCME) grew from 458,000 to 1.3 million. However, public-sector unions face a different economic environment than private-sector unions. Limits on the demands of private-sector unions arise from the higher costs these demands potentially incur for firms. A private-sector firm may close down, lay off workers, or move out of the area to avoid higher labor costs. Public-sector "firms"--primarily, government agencies--rely on taxes to pay employees' salaries. Although they are unlikely to shut down, the ability of a local government to pay for union demands is limited by the local tax base. However, public-sector workers may become a potent political force in some localities and increase the power of their unions. IV UNION ORGANIZATION National unions represent workers from throughout the United States and in some cases workers in other countries, chiefly Canada. Most national unions also have local branches, known as locals, which represent workers in a city or a particular plant. Locals follow the policies of the national union. Some unions also have regional councils, which represent various locals within a region. About 50 national unions are affiliated with the AFL-CIO. In 2005 a major split occurred in the AFL-CIO when three of the largest unions--the Service Employees International Union (SEIU) with 1.8 million members, the Teamsters Union with 1.4 million members, and the United Food and Commercial Workers International Union (UFCW)--withdrew to form the Change to Win Coalition. A Levels of Organization Union members in the United States typically belong to a local. The local in a craft union may represent all members of that craft who reside in a particular geographic area, usually a city or a metropolitan area. Local 32 of the International Union of Bricklayers and Allied Craft Workers, for example, covers workers employed in those trades in Detroit, Michigan, and surrounding counties. The local in an industrial union, on the other hand, typically represents all workers employed at a particular workplace operated by a firm in that industry. Local 325 of the United Automobile Workers of America (UAW), for example, represents workers employed at the Ford plant in St. Louis, Missouri. The AFL-CIO represents the interests of its affiliated unions before the American public, the federal government, and international forums, including the International Labor Organization (ILO), an agency that is associated with the United Nations (UN). The main objective of the AFL-CIO is to provide a single, national voice for the diverse unions under its umbrella, to engage in political lobbying for policies and legislation favorable to labor, and to support political candidates who are sympathetic to labor's social and economic agenda. The newly formed Change to Win Coalition is primarily dedicated to organizing nonunion workers. It also calls for unions to merge into larger organizations so that they will have more clout in negotiating with multinational corporations. B Roles of Each Level Each tier in the union organization plays a different role in the collective bargaining process. The AFL-CIO itself does not engage in collective bargaining with employers, although it may help influence the negotiations through its support for a striking union. The roles of the local and national union often depend on the unionized firm's market. If the firm provides goods and services mostly to a local economy--as a construction firm typically does--then the local union plays the central role in collective bargaining, because it has more familiarity with employment conditions at the firm and with the local economic environment. The national union may provide expertise and guidance during negotiations, but local officials make the key decisions. If the unionized firm serves a national or international market, as in the case of automobile manufacture, the national union then takes the lead in the collective bargaining process. Large employers typically have labor relations or personnel departments that deal with problems in the negotiation and day-to-day administration of labor agreements. Because officials of local unions have firsthand knowledge of working conditions at unionized firms, these officials deal directly with such departments to ensure compliance with the provisions of the agreement. Most collective bargaining agreements provide for the filing of grievances in regard to alleged violations of the agreement. Management, the union, or individual employees can file a grievance. The agreements also state that unresolved grievances may be submitted to arbitration for a final decision. See also Labor Relations. The AFL-CIO and national unions typically engage in political lobbying. The AFL-CIO Committee on Political Education lobbies and sponsors advertising campaigns on issues of concern to the labor movement. It also funds candidates who are supportive of labor issues. National unions often play a major role in political debate over social policy issues that are of particular concern to their members. The unions provide information about the candidates' positions on issues likely to concern the union membership. National unions also provide funding to political candidates that support the union's goals. In 1995 and 1996 various political action committees of the labor movement contributed $48 million to federal political candidates. The AFL-CIO also operates an Organizing Institute, created in 1989, which holds training programs for people interested in becoming union organizers. Union organizers assist workers in nonunion establishments to certify a union as their collective bargaining representative. A trained union organizer can help workers overcome employer opposition and can guide workers through the procedures of a certification election. The institute places the graduates of the program in organizing campaigns in affiliated national unions. C Union Structure In the United States, unions have a democratic management structure because union members elect the chief officers. These elections typically take place at the local unions or at a national union convention. Such elections must occur at least once every five years. Within this structure, unions vary widely. The AFL-CIO itself holds a convention every two years. Delegates to this convention, who represent the affiliated national unions, elect a president to a two-year term. John J. Sweeney, former president of the SEIU, won election as president of the AFL-CIO at the federation's biennial convention in 1995 and has won reelection thereafter. An executive council supervises the day-to-day management of the AFL-CIO. This council consists of the president, executive vice president, secretarytreasurer, and about 50 vice presidents, most of them presidents of national unions affiliated with the AFL-CIO. The executive council plays a role similar to that of a board of directors in a corporation. The UAW holds a convention every three years. Local unions elect delegates to this convention by secret ballot, and any member in good standing of the autoworkers' union is eligible to run for delegate. The delegates elect the president, secretary-treasurer, and other officials for three-year terms. The UAW executive board consists of many of these elected officials. Most of the power in the national union typically resides in the elected president. In many cases the union president acts as chief negotiator in bargaining with management. After a collective bargaining agreement is reached, it must receive approval by a vote of either the executive council or the entire union membership. D Union Services American unions collect dues from their members. Union dues average about 1 percent of a worker's annual income. In 1997 members of the UAW paid 1.15 percent of their monthly income in dues--equivalent to two hours' pay. Unions use these fees for a variety of purposes. The UAW, for example, allocates 38 percent of the dues to the local union, 32 percent to the national union's general fund, and 30 percent to the strike insurance fund. The local and national unions use these funds for union activities and for paying organizers and other staff members who take part in collective bargaining and hearing grievances. The strike fund supports union members during a walkout or a lockout, when they receive no pay. During contract negotiations, a large strike fund helps convince employers that the union is prepared to strike, thereby strengthening the union's bargaining power. Local unions typically hold membership meetings at a regularly scheduled time and place. These meetings give members valuable information about working conditions and provide social opportunities. The local leadership can also learn about the grievances and concerns of the members. In many unions, these meetings are poorly attended. Within each unionized firm, at least one worker is chosen to act as shop steward or union delegate. These union representatives handle day-to-day grievances of their coworkers. Membership in some craft unions requires completion of an apprenticeship while training to become a skilled tradesperson, such as electrician or plumber. After the apprenticeship the worker becomes an experienced journeyman. Craft union regulations typically limit the number of apprentices relative to the number of journeymen in the union. Apprentices typically face a different pay scale, earning 60 to 90 percent of a journeyman's wage. Apprenticeship regulations serve to ensure proper training in the trade, but they also regulate entry into the trade and limit membership in the union. Because apprenticeship regulations limit the supply of workers, they increase wages in these occupations. The United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry has the oldest nationally registered apprenticeship program, with 17,000 apprentices in the United States and Canada. This apprenticeship program lasts five years and provides both classroom and on-the-job training. Each apprentice must obtain 1,700 to 2,000 hours annually of on-the-job training and at least 216 hours of related classroom instruction, including courses in mathematics and drawing. Unions provide many other services to their workers, although the nature of these services varies greatly from union to union. Many unions offer low-cost credit cards and subsidized mortgage loans to their members. Some have scholarship programs for members and their dependents. Some union services help members advance in their careers. For example, the Amalgamated Transit Union, which covers many transit workers, assists members in obtaining commercial driver's licenses. V WHAT UNIONS BARGAIN FOR Historically, unions in the United States have bargained for improved working conditions, particularly higher wages. Unionized jobs in the United States pay substantially higher wages than nonunion jobs, even after taking into account skill differences among workers employed in different establishments. A Wages and Benefits Overall, the gap in wages between unionized workers and nonunion workers is about 15 percent in the United States, with unionized workers receiving higher wages. This union wage gap varies by skill level and changes over time. Unions tend to increase the wages of less-skilled workers by a larger percentage than they raise the wages of more-skilled workers because they have had greater success at organizing less-skilled workers. The union wage gap for low-wage workers averages about 30 percent; for high-wage workers, about 10 percent. During a recession (economic downturn), unions often help their members maintain a higher economic status than nonunion workers in comparable jobs, because the union wage gap typically tends to widen during recessions. Economists argue that the impact of unions on wages extends beyond unionized firms for two reasons. First, so-called threat effects may lead nonunion employers to pay higher wages to keep workers satisfied and thereby lower the chances of a successful union organizing drive. Second, unions may have spillover effects on nonunion workers. If unionized firms layoff many workers in response to higher labor costs, these laid-off workers may enter the nonunion sector. This increase in the labor supply could then lower the wages of nonunion workers, according to the law of supply and demand. Government regulations in the United States also ensure that the results of collective bargaining agreements are sometimes transmitted to the nonunion sector. For example, a provision in the Davis-Bacon Act of 1931 requires that workers employed in federally subsidized construction projects receive what is called a prevailing wage. The U.S. Department of Labor has typically interpreted the prevailing wage for such projects to be the union wage for construction workers in the locality. Economists estimate that the prevailing-wage provision increases the costs of these construction projects by as much as 25 percent, by increasing the wages of nonunion labor used in the project. The collective bargaining agreement also has an important effect on the fringe benefits offered by firms. Fringe benefits include health and life insurance, vacation and sick days, pensions, and bonuses. The value of fringe benefits averages 20 percent of the wage in unionized firms but only 15 percent of the wage in nonunion firms. Because union workers earn more, they receive fringe benefits worth more than those received by nonunion workers. B Working Conditions In addition to wages and fringe benefits, unions also bargain over hours of work and other working conditions. The eight-hour day formed an important demand of the early union movement in the United States, when many workers routinely put in 12-hour or longer days, six days a week. Today, unions and management routinely bargain over tuition remission (partial reimbursement of tuition fees), cost-of-living adjustments (increases in wages because of inflation), safety and health protections on the job, maternity and paternity leaves (paid or unpaid leave following the birth of a child), and various types of detailed work rules, indicating the tasks that a unionized worker can and cannot do. In the absence of unions, workers do not have an established mechanism for informing employers of grievances about working conditions, wages, or other aspects of the employment relationship. If a single worker were to complain, the employer might respond by demoting or firing the worker. Nonunion workers typically register their dissatisfaction by "voting with their feet"--that is, by leaving the firm. Because unions give workers a recognized channel for airing grievances, labor turnover is lower in unionized firms. Collective bargaining thus leads to a more stable workforce. VI HISTORY OF UNIONS The first associations of workers, merchant guilds and craft guilds, formed during the Middle Ages in Europe (see Guild). Merchant guilds, which arose in the 11th century, consisted of the merchants and traders in a city who banded together. Craft guilds, first formed in the 12th century, included people who were engaged in a particular craft, and they gradually deprived merchant guilds of their power. In time, journeymen members of craft unions organized their own associations to seek higher wages and improved working conditions. These associations are considered the forerunners of labor unions because of their emphasis on wages and working conditions. The earliest actual labor unions arose in Western Europe and the United States at the end of the 18th century and the beginning of the 19th century. They were formed by skilled crafts workers in reaction to the rapid changes in the economic environment brought about by industrialization. The concentration of work in large factories left workers increasingly dependent upon their employers. A Unions in Europe The early labor unions in Europe encountered resistance from employers and government. In England, laws passed in 1799 and 1800 declared that combinations of workers to improve their wages or hours were illegal conspiracies in restraint of trade. Similar restrictive labor laws were passed in other European countries. Gradually, social reformers pressed for laws to relieve the effects of industrialization on workers. England passed a law requiring government factory inspectors in 1833. France enacted a child-labor law in 1841, and Austria followed suit the next year. Barriers to unions were slowly lifted as well. Resistance from employers, however, made many early labor laws and unions ineffective. This resistance to labor reforms helped lead to revolutionary movements in Europe. German political philosopher Karl Marx, for example, argued that the exploitation of labor would lead the working classes to overthrow their governments and set up a socialist, classless society of shared resources. In various European countries, both democratic and nondemocratic, workers' movements began to advocate socialism and, after the Russian Revolution of 1917, communism. A number of European political parties that began with socialist goals continue to represent labor, although today they have much broader bases of support and platforms. These political parties include Britain's Labour Party, Germany's Social Democratic Party, France's Socialist Party, and Italy's Democratic Party of the Left (formerly Communist Party). B Unions in the United States Early efforts to organize workers in the United States were short-lived, often collapsing after an economic downturn. Strikes, labor unrest, and the occasional riot increased antiunion sentiment. After 1900 unions began to gain strength, and the government made efforts to prevent industrial strife. B1 Hostility to Unions Until the Great Depression of the 1930s, social attitudes and the political climate in the United States were not favorable to labor unions. In the Loewe v. Lawlor decision of 1908, the Supreme Court of the United States upheld a judgment against the United Hatters of North America because the union had organized a consumer boycott against a nonunion producer in Danbury, Connecticut (see Danbury Hatters Case). The Supreme Court based its decision on the view that the actions of the hatters' union reduced the flow of goods in interstate commerce and thus constituted restraint of trade in violation of the Sherman Antitrust Act. In subsequent decisions, the Court used the antitrust analogy to outlaw strikes that affected interstate commerce. This interpretation of antitrust laws remained in force until 1940. The unfriendly social, legal, and political environment kept union membership in check. Employers also made frequent use of so-called yellow-dog contracts. These contracts stipulated that as a condition of employment, the worker agreed not to join a union. When unions attempted to organize workers who had signed these contracts, the courts found them guilty of a breach of contract. In 1908 the Supreme Court upheld the constitutionality of yellow-dog contracts in Adair v United States, which overturned a federal law of 1898 that had prohibited such contracts. B2 Changes in the Law As part of the legislative program associated with the New Deal, the legal environment regulating the relationship between labor unions and private-sector firms began to change in the 1930s. Worker protests and strikes were also instrumental in bringing about changes in the political climate. Four major pieces of federal legislation now regulate the labor movement in the United States: The Norris-La Guardia Anti-Injunction Act of 1932 restricts the employer's use of court orders to hamper union organizing drives and limit strikes. It also made yellowdog contracts unenforceable in federal courts. The National Labor Relations Act of 1935, also known as the Wagner Act, defines a set of unfair labor practices for employers. It requires that employers bargain with unions and not interfere with the worker's right to organize. Among the specific unfair labor practices prohibited are firing workers involved in union activities and discriminating against workers who support a union. The act also established the National Labor Relations Board (NLRB), an independent government agency that can investigate unfair labor practices and order the stop of such practices. The NLRB also runs certification elections in which workers decide if a particular union is to represent them in collective bargaining. The Labor-Management Relations Act of 1947, also known as the Taft-Hartley Act, curbed union power by permitting states to pass right-to-work laws. These laws prohibit unions from requiring that workers become union members as a condition of employment in unionized firms. The Taft-Hartley Act also gave workers the right to hold elections that would decertify a union from representing them in collective bargaining. This emphasis on the rights of workers not to join unions and not to participate in collective bargaining represented another shift in the political climate regarding labor. The Labor-Management Reporting and Disclosure Act of 1959, known as the Landrum-Griffin Act, requires the complete disclosure of union finances. The LandrumGriffin Act also requires unions to hold regularly scheduled elections so as to make the leadership more accountable to the members. Labor policy was also influenced by the executive branch. Executive Order 10988, issued by President John F. Kennedy in 1962, granted federal government workers the right to organize. Until then, federal workers were prohibited from joining unions. A number of state laws later extended the right to organize to state and local government workers in many jurisdictions. Only 18.5 percent of public-sector workers belonged to unions in 1970. By 1999 this percentage had risen to 37.3 percent. B3 Economic Changes and Unionization Rates The most striking feature of the American union movement today is a steady decline in private-sector unionization rates that began in the mid-1960s. The period since then has witnessed major changes in the structure of the U.S. economy. In 1970, 26.4 percent of American workers worked in manufacturing, and 25.9 percent worked in the service sector. By 1998, manufacturing employed 15.8 percent of workers, and the service sector employed 35.9 percent. The location of jobs also shifted. In 1970 only 48 percent of the population lived in Southern and Western states, which tend to have less favorable environments for union organizing, such as right-towork laws. By 1999, 58 percent of the population lived in these states. Finally, the participation of women in the workforce increased markedly. This trend dampens unionization rates because women have historically been less likely than men to join unions. In addition to these structural economic changes, other factors also help determine trends in union membership. Within industries and occupations, within states, and within demographic groups, unionization rates have dropped drastically. Experts attribute part of the decline in the union movement to changes in workers' voting patterns in union certification elections. The NLRB holds an election to certify a union as a collective bargaining agent after 30 percent of the workers petition for such an election. The union can represent the workers if it obtains a simple majority of the workers who will make up the bargaining unit. In 1955 unions won over two-thirds of representation elections. By 1990 unions won only 47 percent of the elections. The worsening performance of unions in certification elections results partly from an increase in aggressive antiunion tactics by management. There are many ways in which management activities can reduce the success of union organizing drives. These include the filing of petitions to delay the certification election and the hiring of consultants to handle the management campaign, sending out letters to workers, and giving so-called captive-audience antiunion speeches in the workplace. These activities reduce the likelihood of union representation. Management has stepped up antiunion activities in part owing to a rise in foreign competition as well as to the deregulation of certain unionized industries, such as trucking, airlines, and railroads. The tide of foreign goods flowing into the United States today captures part of the profits that would previously have been shared between firms and workers in the affected industries. Deregulation, which began in the late 1970s, introduced competitive forces into the marketplace and also diminished profits. When faced with foreign competition or a less regulated environment, firms resist much more strongly union wage demands and the introduction of union work rules. The political climate that unions face has also changed. This change is best exemplified by President Ronald Reagan's successful break of a strike called by federal air traffic controllers in 1981. Citing federal law that banned government employees from striking, Reagan ordered the firing of thousands of controllers. This event signaled a remarkable shift in the political power of unions in the United States. C Current Trends in Organized Labor Overall, the labor movement in the United States seems to be in a state of long-run decline. Membership has declined from a peak of 35 percent of the workforce in 1954 to 12.5 percent in 2004. Unions in the nonmanufacturing sector, however, experienced great growth in the last decades of the 20th century. Many of the fastestgrowing and most active unions represent public employees and service workers, such as those in the SEIU. Teachers and social workers, as well as transit and sanitation workers, have conducted prolonged strikes in many major cities and made substantial economic gains. The unionization of professionals represents a potential growth area for the future. In the health-care sector, for example, many professionals now work for large organizations, such as health maintenance organizations (HMOs) and other forms of managed care that have gained economic importance. These organizations, together with the health insurance industry, play a key role in determining the working conditions of health care professionals. To regain greater control over working conditions, these professionals have begun to unionize. The American Medical Association (AMA), for example, voted in 1999 to form a union of doctors to negotiate with HMOs. The traditional sectors of the labor movement also have shown signs of resurgence. These signs include the election of reformer John Sweeney as president of the AFLCIO and a new commitment by the federation to fund and support union organizing drives. An action widely interpreted as a victory for labor was Congress's refusal in 1997 to grant the U.S. president fast-track authority to negotiate future trade deals. Pacts such as the North American Free Trade Agreement (NAFTA), negotiated by the administration of President Bill Clinton, remove tariffs and effectively send jobs out of the United States to factories in countries where labor is cheaper. Also in 1997, Ron Carey, then president of the Teamsters Union, led a successful strike against United Parcel Service of America (UPS). After 15 days the company agreed to most of the union demands. Unions have also won victories in textile mills in the South in recent years. In 1999 textile workers at six textile plants in North Carolina voted to join the Union of Needletrades, Industrial and Textile Employees (UNITE). Other signs point to recurring turmoil in the labor movement. Shortly after the Teamsters victory over UPS, high-ranking officials in the Teamsters union were convicted of fundraising irregularities in Carey's 1996 reelection campaign. The fundraising scandal invalidated the election results and disqualified Carey from running in a new election. He was later expelled from the union. In the late 20th century awareness increased of the need to overhaul the legal environment that regulates the relationship between workers and employers. In 1993 the Clinton Administration appointed a Commission on the Future of Worker-Management Relations, headed by John Dunlop, secretary of labor under President Gerald Ford. The Dunlop Commission included representatives from the business, labor, and academic communities. The commission investigated methods to improve labormanagement cooperation and use employee participation to enhance worker productivity. It also reviewed changes that could be made in the legal framework to enhance cooperation and reduce conflict and delay in the workplace. The Dunlop Commission recommended increased flexibility in accepting employee participation programs in nonunion establishments. Many programs that provide a forum for workers and management to discuss work-related issues in nonunion settings could be considered illegal under current regulations. The commission also recommended streamlining the process required for workers to elect a union as their collective bargaining agent. The Dunlop Commission released its recommendations shortly before the 1994 election of a Republican Congress, and the new Congress took no action on those recommendations. Perhaps the biggest sign of turmoil in the labor movement occurred in 2005 when the SEIU, the Teamsters Union, and the UFCW split from the AFL-CIO. Despite the reputation of Sweeney as a reformer, his successor as head of the SEIU, Andrew Stern, grew dissatisfied with the continuing decline in union membership and the reluctance of the AFL-CIO to shift a substantial portion of its budget to union organizing efforts. Stern, Teamsters president James Hoffa, and UFCW president Joe Hansen proposed that 50 percent of AFL-CIO dues money be used for organizing. When their proposal was rejected by the AFL-CIO's executive committee, the three union leaders withdrew from the labor federation and called on other unions to join their Change to Win Coalition. Three other major unions--the Laborers' International Union of North America, the United Farm Workers of America, and UNITE HERE--joined the coalition. UNITE HERE threatened to leave the AFL-CIO as well. Contributed By: George J. Borjas Microsoft ® Encarta ® 2009. © 1993-2008 Microsoft Corporation. All rights reserved.