Old Unions Build a New Set of U.S. Labor Relations

If Labor Day is coming late this year, so is attention to an important national change: Organized labor is beginning to transcend its image of pinky rings and 10-cent cigar smoke to regroup as a force in modern U.S. political and economic life. By 1988, its hitherto waning political influence could be on the upswing.

After all, it could hardly go down. The conservative years of the early and mid-1980s marked a nadir of labor credibility on all fronts. Labor’s share of the national work force and union success in representation elections were both on a downward slide. Futurists openly dismissed unions and labor leaders as dinosaurs; then the 1984 presidential election--when the AFL-CIO anointed Walter F. Mondale, only to see him carry one state--seemed to prove their point.

To be sure, talk of a late-1980s turnabout has to be more tentative than conclusive. Basic economic forces are still not favorable to work-force organizing--not with jobs migrating from Frost Belt assembly lines to Sun Belt sweatshops, Taiwan and service industries. What clearly has changed, though, is the way union strategists show greater wisdom in deploying their not-inconsiderable resources. Most important, they seem to be giving up yesterday’s glory dreams--of hand-picking Democratic presidential nominees, captaining great coalitions for “Social Justice” or making every year’s wages in autos or steel set a new record.

None of that works anymore. Union members--and potential enlistees--prefer realistic bread-and-butter economics to grandiose political blueprints or Brie-and-Chablis alliances. And it’s precisely this basic-issue game that union leaders now seem to be playing with renewed public sensitivity and good timing.

Much has changed since 1984, when the simultaneous deflation of Mondale, “reactionary liberalism” and AFL-CIO hubris paved the way for a Republican landslide--and, ultimately, for today’s public fatigue with Reagan domestic policy. Since last winter, poll after poll has shown Americans favoring new policy directions rather than continued pursuit of Reagan ideology. Demand for more government activism and increased federal spending has been rising. And once the Democrats recaptured the U.S. Senate in 1986--with labor playing a critical role--union leaders saw the opportunity for a whole new political and economic agenda.

This has indeed been unfolding. Tax cuts and industrial deregulation are starting to look like yesterday’s themes. The debate is shifting away from laissez faire to tougher trade laws, restraint of mergers, partial re-regulation in some industries (air travel, for one) and increased federal spending in areas--highways, the environment, housing--where public demand has been building. This time, labor is riding with the trend. In addition, the AFL-CIO has put its strategic chips on a number of specific new major proposals: an increase in the minimum wage to $4.65 an hour by 1990; a bill proposed by Sen. Edward M. Kennedy (D-Mass.) requiring business to provide employees with certain minimum health insurance coverage; legislation to oblige businesses to give employees unpaid parental leave; catastrophic health insurance, and a requirement that firms over a certain size must give employees notice of plant closings.

By no means will all these be enacted. Nor should they. Some would overburden the federal budget; some would weigh too heavily on business, small business in particular. But in each case, supporters can produce favorable public opinion polls. For example, a recent survey found a whopping 86% majority favoring plant-closing legislation. In general, at least, these are new directions the public wants to explore. Politically, the AFL-CIO has found itself an acceptable, even mildly popular agenda--and now surprised business organizations find themselves on the defensive.

Even labor’s mid-August decision to oppose the U.S. Supreme Court nomination of Judge Robert H. Bork could be an influence-building move. To date, the anti-Bork effort has been led by cultural pressure groups of dubious credibility in Middle America. AFL-CIO involvement may focus debate--and Bork’s possible vulnerability--on business and economic issues.

Ingredient No. 2 in labor’s incipient rebound is that its new aggressiveness is not just a matter of politics and legislation. A number of unions are also getting involved in the nitty-gritty of capitalism itself--corporate finance.

Wall Street gamesmanship could turn out to be organized labor’s most fascinating comeback ploy: utilizing their pension fund and contract-negotiation leverage over much of U.S. industry to deal themselves into the current restructuring of corporate America. Yesterday’s adversarial approach to business--give us the fattest pay packet and to hell with the rest of it--is gone, after helping turn out the lights in steel plants and many other industries. But where unions give wage concessions, some are beginning to demand a compensatory voice in company management and a share in future profits. And even national labor strategists are paying attention. Back in February, the AFL-CIO held its first-ever seminar for union officials to study the effect of mergers and acquisitions on collective bargaining, a development that AFL-CIO Industrial Union Special Projects Director Joseph B. Uehlein describes as, “reflecting the realization that we need to be players in this corporate change game.”

The result is that unions are not just involving themselves peripherally in corporate restructurings, through the share-holdings of huge multibillion-dollar union pension funds. Major unions like the Airline Pilots Assn. and Food and Commercial Workers have actually been wheeling and dealing. They have been hiring lawyers and investment bankers such as Lazard Freres & Co. and Drexel Burnham Lambert to represent them in attempts to repackage the corporate frameworks of such companies as Safeway Stores Inc., Pan American World Airways, Trans World Airlines Inc. and United Airlines. Labor strategists involved in restructuring Pan Am actually went so far as to approach international arch-capitalist Sir James M. Goldsmith about participating.

Investment banker Eugene J. Keilin, who’s worked on several of these possible deals, calls it an important trend, especially if the United and Pan Am efforts succeed: “What you are beginning to see, in a number of other industries and with a number of other unions, are people exploring the same thing the pilots have done. This is getting enormous attention.” And it should. Eugene V. Debbs and Samuel Gompers must be spinning in their graves.

In short, just as the economic climate of 1987 has changed since 1984, labor’s tactics seem to be changing as well. But not enough people perceive the transition. And the need to take labor seriously again may also extend to the 1988 political realm. Because there’s no way union leaders can agree on a 1988 Democratic presidential endorsement, they’ll never make the sort of heavy-handed early commitment that embarrassed them last time.

As a result, labor is bound to be heavily courted, especially during the early primaries. Strong union political organizations and a greater public relevance for their 1987-88 policy positions seem bound to make labor’s embrace worth more next year than it was to the hapless Mondale in 1984.

Organized labor’s goals and interests are not necessarily America’s. Like the U.S. Chamber of Commerce, the AFL-CIO remains a certified special interest. But buoyed by a changing national mood, labor has been catching up with the strategic realities of late-1980s politics and economics. They’re nobody’s patsies any more--nobody’s pea-brained, cigar-chomping dinosaurs, either. And, for the moment at least, their influence seems to be on a roll.