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Business & Tech

Public Sector Unions on the Ropes

Coupled with declining membership, the future and legitimacy of organized labor is up for debate in the U.S.

Local union leaders see the political fight in Wisconsin and emerging ones in Indiana, New Jersey, Ohio and Michigan as a rallying call that is galvanizing both member and citizen support for organized labor. However, union critics and professional observers see recent events as the culmination of a 20-year trend and a public response to a government system that is unsustainable. What remains clear is that public sector unions are the target of budget trimming measures and policy shifts in states across the Midwest, and with private sector union membership continuing to decline, the future and legitimacy of organized labor is up for debate in the U.S.

“I think that what a lot of private sector workers are waking up to is the fact that public sector unions are hiring the people who will determine their pay and benefits,” said Todd Maisch, vice president of government affairs for the Illinois Chamber of Commerce. “Private sector workers have a dual burden of writing a bigger check to the government to fund employee retirement and at the same time have to fund their own retirement.”

Maisch attributed the backlash to voters' realization that there are a number of costs associated with states' labor costs that are unsustainable. Maisch acknowledges that politicians in Illinois and other states have shirked their responsibility to fully fund pension systems, a fact most union leaders point to when discussing the great financial burden public pensions are placing on state governments. However, Maisch says that inadequate pension funding is only part of the problem.

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“We recognize that the state has not always funded the pension system the way it should,” Maisch said. “But the system itself is not sustainable. The benefits (for public sector workers) are much higher than their private sector counterparts.”

While Maisch views the actions in Wisconsin and other states as fiscally responsible policy choices, union leaders see the move as purely political. Frank Libby, president of the Chicago Regional Council of Carpenters, said Wisconsin Gov. Scott Walker’s recorded telephone call with a liberal blogger was evidence enough that his agenda was more motivated by politics than policy.

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“This is an agenda. This is not about balancing a state budget, it’s about driving an agenda,” said Libby. “You heard him (Gov. Walker); he says he has us on the run now.”

Maisch sees the argument that this is purely political as obvious.

“Of course it’s political, you have to use the political system to change the status quo,” said Maisch. “It’s not a vendetta; it is simply the realignment of the resources taxpayers can fairly provide.”

Illinois has long been valued by organized labor as a union stronghold, but Libby says Illinois is not immune to the kind of reforms aimed at curbing union strength being pursued in other states. Libby referenced continuing legal action the Carpenters Council has taken against the state in an effort to prevent the limiting of collective bargaining rights for workers at Chicago’s McCormick Place.

“Wisconsin has a governor taking on many more unions,” said Libby, “but what’s happening in Wisconsin is not unique.”

Local private sector union leaders see the events in other states, despite the focus on public sector workers, as a warning.

“We have to be very active right now, we have to mobilize our members and remind them that unions got them the wages, the conditions and benefits by fighting for them,” said Ed Maher, spokesman for the International Union of Operating Engineers Local 150 in Glen Ellyn. “This labor battle hasn’t been seen in a generation. We have to stand up and fight for what we got ourselves and what we want for the next generation.”

While the blows suffered by organized labor in Wisconsin will be bored solely by public sector union members, many pundits and economists see this anti-union sentiment as the death knell of big labor in the U.S.  Since its peak during the mid- to late-1950s, when they represented nearly 35 percent of the workforce, private sector unions have seen a steady decline in their membership. Today, according to the Bureau of Labor Statistics, private sector union membership has fallen to 6.9 percent. This sharp downfall has been attributed by some to the decline of U.S. manufacturing jobs.

“The great loss of manufacturing jobs has had a direct effect on the loss of our members,” said Beth Spencer, a spokeswoman for the Illinois AFL-CIO, which has regional offices in Burr Ridge. “The jobs that have been lost are in the areas that are most heavily unionized.”

The loss of manufacturing jobs and a decline in blue-collar employment in the U.S. has long been identified as one of the contributing factors in the erosion of private sector union membership, but Georgia State University economist Barry Hirsch notes that it is not as significant as labor leaders make it out to be.

Hirsch notes in his 2008 essay, “Sluggish Institutions in a Dynamic World: Can Unions and Industrial Competition Coexist,” that despite a massive downturn in private sector union membership, nonunion manufacturing employment remained steady over time. According to Hirsch's report, nonunion employment in manufacturing rose by about 1.5 million between 1973 and 2006, despite a sharp 2.5 million decline after 2000. Union members employed in the manufacturing sector fell from 7.8 million in 1973 to only 1.8 million in 2006.  You can read his entire paper here.

Others, including Hirsch and Maher, believe that not only did the decline of U.S. manufacturing and other industries with a large union presence force a decline in membership, but organized labor’s focus on political action, instead of organizing new members, has made retaining their numbers even more difficult.

“The roots of the union movement are in organizing,” said Maher. “That’s what we need to get back to.”

According to Maher, Operating Engineers 150 is doing just that. Bucking national trends, Local 150 has doubled its membership in the last 25 years.

“As a union we have been very aggressive with organizing. In 1986 we had 11,000 members, in 2011 we have 23,000 members,” said Maher. “Northeastern Illinois is one of the very few strongholds that organized labor has left in this country. There are only a few places that have market shares for unions.”

However, organizing capabilities and general job losses aren’t the only things threatening the strength of both public and private sector unions. In lieu of actions taken in Wisconsin, other states including Ohio and New Jersey are looking to cut public worker pay and benefits to fill widening state budget gaps. This sets a dangerous precedent, according to Spencer, whether people are discussing public or private unions.

“It always concerns us,” said Spencer. “We’re always looking over our shoulder, looking round the bend to see what’s happening with our state legislature and our governor.”

Maher believes that organized labor has value for both members and nonmembers, and is here to stay despite its sharp decline in recent years.

“Workers that are not organized have still benefited from the organized labor movement. Worker’s rights are the same as human rights,” Maher said. “Labor has been fighting these battles for its entire existence. The time has come to when we have some more battles to fight and we will fight to keep these rights."

However, Libby admitted that there is a legitimate frustration being expressed by voters toward labor unions.

“This is happening throughout the country,” said Libby. “There are 22 states that will have to be dealing with this issue, and I think there is a level of frustration for people who are nonunion.”

Maisch however, believes that current efforts to limit the power of both private and public sector unions has more to do with trends in our economic system.

“Clearly you have a situation, in very general terms, where you have had some strategic overreach by private sector unions,” said Maisch. “It is the failure of (unions) to recognize that the globe is getting smaller and this is going to result in a real competition that American can win, but not without creating a competitive atmosphere.”

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