A Perspective of the Value of Labor Unions

A Perspective of the Value of Labor Unions By Helen Del Grosso, SPHR Today, some people seem to equate unions as increased costs to corporations and the beginning of the end to many industries within the United States. The value of unions to employees is directly related to the individual s satisfaction to their work environment. Union membership appears to represent the belief that a union environment could improve conditions, preserve basic needs or assist employees in expression of their dissatisfaction with management. There are a number of examples herein that speak to the value Unions have provided, how this focus turned to laws of protection and a glimpse into where they might focus in the future. Triangle Shirtwaist Company The Triangle Shirtwaist Company is a historic example of the abuses of immigrants especially women and children of the garment industry. People who most needed a job and were afraid to voice concerns about wages and working conditions. The Triangle Shirtwaist Company was located on the top floors of the ten story building, in the heart of Manhattan. The factory employed mostly young females who were for the most part, recent immigrants. The shirtwaist employees worked seven days a week, from 7 am to 8 pm with a half hour lunch break during non-peak periods. They were paid about $6 dollars a week and many were required to use their own sewing needles, threads and irons. The Triangle factory was a non-union shop although some of its workers had joined the International Ladies Garment Workers Union. In the fall of 1909 the garment industry factory owners were attempting to increase the work hours and decrease the pay of workers. Months later in 1909, Local 25, of the International Ladies Garment Workers Union (ILGWU) convened a meeting with its few hundred members to discuss a general strike. By February 1910, the strike ended, most factories had rehired strikers, agreed to higher wages and shorter hours. Local 25 grew to more than 20,000 members. But the Workers at Triangle went back to work without an agreement. Management did not address their demands which included; unlocked doors in the factory and fire escapes that functioned. On Saturday, March 25, 1911, a fire broke out on the top floor of the ten story, Triangle Shirtwaist Factory. Workers couldn t open the ninth floor door to the stairs which was commonly locked by the owners. The ninth floor fire escape led nowhere; and collapsed under the weight of the factory worker s trying to escape the fire. 1

Many of those that waited near the windows for help jumped to their deaths as the workers found the firefighters ladders were not able to reach the top floors of the building and the fire hoses could not reach them. In less than an hour the fire was out and 150 workers were dead. Employees at the Triangle Shirtwaist Company were treated intolerably. The wages were poor; hours long with unsafe working conditions that resulted in the tragedy could have been avoided if the employer had given the simplest thought to the basic dignity of the employees instead of focusing on the bottom line revenues of the business. The majority of the employees were the most vulnerable population in the work force; individuals who were in desperate need of their wages and least likely to speak out; recent immigrants; primarily women and children. These individuals were not protected by the government, a union and certainly not their employer. The Government became more active when the New York State Assembly appointed a commission to investigate the factory conditions that contributed to this tragedy. Alfred E. Smith was vice chairman of the commission. He was elected Governor of New York in 1918 and during his term he strengthened worker s compensation laws, women s pensions and protections for working children and women. He was recently inducted to the Labor Hall of Fame for his crusades against dangerous and unhealthy workplaces and championing corrective legislation. Steel Industry The growth of the steel industry during the early twentieth century was afflicted by serious conflict between companies and their employees. Many steelworkers at this time worked twelve hour shifts, six or seven days a week, in hazardous environments. The iron ore went to blast furnaces which discharged the ore. The coal was sent to coke ovens where the coal would be baked in order to provide carbon for the steel. The ore, carbon and limestone would be poured into the top of a blast furnace and heated up to several thousands of degrees (think of a volcano) Superheated air is blown into the blast furnace from special furnaces which ignites the air and cooks the coke. A hole is bored into the furnace and the hot solution pours out. This solution is referred to as pig iron. The pig iron is poured into a vessel and heated whether through an Open Hearth Furnace method or a Basic Oxygen Furnace. The purpose of this snapshot is to provide you with an idea of the dangers involved. For a number of reasons but mostly wages and working conditions, the steelworkers were driven to organize by the Committee for Industrial Organization (CIO). The leader of the CIO was the United Mine Workers' president, John L. Lewis. Meetings between Lewis and U.S. Steel's chairman of the Board, Myron Taylor resulted with the signing of a contract on March 1, 1937, the company recognized Steel Worker s Organizing Committee (SWOC) as the 2

bargaining agent for its members only. According to article written by William Bork entitled Massacre at Republic Steel, 1 from the Illinois Labor History Society, the contract made binding arbitration the final step of the grievance procedure. It established a common labor wage of $5.00 a day, and an 8-hour day with time and one-half for overtime work. The SWOC rejoiced over this victory and turned to the rest of the steel industry, fully expecting smaller steel companies to follow. A group of companies opposed recognition of the union and refused to sign a contract. The group included Bethlehem Steel Corp., Republic Steel Corp., Youngstown Sheet & Tube, National Steel Corp., Inland Steel Co., and American Rolling Mill Co. Republic fired union men, and hired strikebreakers. It built up a stockpile of industrial munitions, including guns, tear gas, and clubs. These munitions were placed in the various plants of Republic Steel in preparation for a strike which the company anticipated. By May, 1937, SWOC prepared to strike three of the companies, Republic, Youngstown Sheet & Tube and Inland. A strike was called on May 26, 1937. There were 85,000 steelworkers involved. That day in May, 1937, an estimated crowd of around 1500 strikers and sympathizers had gathered. About 15 percent of the crowd included women and children. About 200 policemen were waiting for the marchers with billy clubs. Disaster ensued. Based on accounts of the time, Policemen in the front ranks drew their revolvers and fired point blank into the retreating marchers. Approximately 200 shots rang out. Marchers who had dropped to the ground to avoid the bullets were clubbed repeatedly by policemen. Film that was taken at the time clearly shows Lupe Marshall, a social worker from Chicago s Hull House, being prodded and arrested. By the end of the massacre four marchers had been fatally shot on site and six others were mortally wounded and died. Fifty-eight individuals required hospitalization or some sort of emergency medical treatment. The gunshot wounds of the dead were mostly in the back, only four were classified as frontal wounds. Police injuries were comparatively minor. Thirty-five policemen reported injuries with no gunshot wounds and only three policemen requiring overnight hospital care. The strike was called off. The government became involved and a Senate Committee investigation occurred. Major conclusions of the investigation were that the police should have allowed a peaceful demonstration, that the force the police used was excessive and that the shooting and beatings were avoidable. The nationwide death toll in the strike reached sixteen as six other strikers were killed on a picket line in Ohio. The Unions felt employees were retaliated against for exercising a constitutional right, their freedom of speech, to organize and assemble. Fundamental rights to the existence of a democracy. In this situation, the SWOC went to the National Labor Relations Board (NLRB). As a result of the NLRB involvement, in August 1941, Republic Steel and other Companies agreed to cease and desist from committing unfair labor practices. 3

The Labor Board provided for a series of membership card cross-checks and secret ballot elections which later established bargaining rights for SWOC. One year later, the companies signed their first contracts (under compulsion by the War Labor Board) with the new United Steelworkers of America. In March of 1946, John L. Lewis commenced negotiations on behalf of the United Mine Workers. Lewis wanted not only a wage increase; he wanted a substantial health and welfare fund for the miners. The conditions that they worked under had resulted in over 7900 deaths and over 378,951 2 were injured in the years of 1941-1945. Lewis felt the workers were entitled to a fund that would help them when sick or crippled and support their families in the case of their death. No agreement resulted in a strike that went over seven weeks. The United States Government took over the mine and on May 21, 1946 the Secretary of the Interior began to negotiate an agreement with the miners that resulted in an 18 ½ cent increase. In addition, a Welfare and Retirement Fund was established that was to be financed by a royalty of five cents on every ton of coal mined. These examples represent the voice and the vehicle that Unions provided to employees to improve hours, wages and working conditions. Their voice to assert the fact they were dissatisfied with the status quo. The Union provided numbers rather than an individual voice which resulted in media attention and ultimately government involvement and regulation. Legislative Changes During the 1930 s and 1940 s significant laws and regulations were enacted affecting Employee and Employer rights including: The Norris-LaGuardia Act 1932 Restricted Federal Judicial intervention in labor disputes. National Industrial Recovery Act 1933 Authorized the President of the United States to regulate businesses in the interests of promoting fair competition, supporting prices and competition, creating jobs for unemployed workers, and stimulating the United States economy to recover from the depression. National Labor Relations Act 1935 (Wagner Act) Provides employees with the right to organize and bargain collectively. The Fair Labor Standards Act 1938-Established a national minimum wage, provides federal standards for overtime and provides restrictions for the employment of minors. Labor Management Relations Act 1947 (Taft-Hartley Act) Balanced Union/Management rights. Guarantees employers right to free speech. Outlawed closed shop. Among other things, these changes provided employees with the legal right to organize and bargain collectively. They provided a vehicle for labor disputes 4

between unions and employers. They provided a minimum wage and the basis for overtime pay as well as rules for the employment of minors. And yet, Union membership was at an all time high in the 1950 s. 1950 s and Beyond Even though the government had instituted a number of laws to protect workers it wasn t enough. In April of 1954, 2800 United Auto Workers walked out of Wisconsin s Kohler Co. over a contract dispute. During the strike, Kohler operated its plumbing-fixture plant with close to 2,000 non-union employees that the Company promised to keep on the job even when the dispute was settled. The U.A.W. stated that it would require all the strikers be rehired. The National Labor Relations Board examiner upheld the union and charged Kohler with unfair labor practices. In his book The Enemy Within, Robert Kennedy talks about his tour of the facility during his work with the McClellan Committee. The McClellan Committee was the Senate Select Committee on Improper Activities in the Labor or Management Field during the 1950 s. Mr. Kennedy stated the following of his tour of the Kohler facility with the then company attorney Lyman Conger. We went with him through the enamel shop where the temperatures ordinarily range from 100 to 200 degrees, although it was not in operation that day. The UAW was attempting to get a twenty-minute lunch period for the employees who work there on an eight-hour shift. I was struck by how small a part Mr. Kohler took in our interview. It seemed as if he were there only because he felt he had to be. As it became evident later when he testified before the committee, Mr. Kohler knows little about the actual running of the company or about the seriousness of the issues in dispute between his company and the union. 3 In the 1950 s even after the Fair Labor Standards Act was enacted, Mr. Kennedy toured the Kohler facility and found that in the enamel shop workers were expected to take a two to three minute lunch break in a shop where temperatures were extreme in order to address the volume of work. Although the McClellan Committee Investigation included the excesses and illegal activities of certain union leaders, unions were still clearly assisting employees in addressing basic wrongs in the work environment relating to hours, wages and working conditions. The Civil Rights Act was passed in 1964 protecting applicants and employees from unlawful discrimination based on race, color, religion, gender or national origin. In 1967 The Age Discrimination in Employment Act was passed. Safety in the workplace was addressed through the Occupational Safety and Health Act (OSHA) of 1970. Followed in 1990 by the Americans with Disabilities Act and in 1993 with the Family and Medical Leave Act. 5

Beginning in the 1970 s, union membership saw a steady decline in the private sector while increasing in the public sector. One reason for this is that private employers began to address some of the remaining issues that might motivate employees to join a union. Private employers began to share profits with employees, to provide forums for employees to voice their opinions and management listened and responded to those opinions. According to data from the U.S. Department of Labor s Bureau of Labor Statistics 4 released in January 2006, 12% of wage and salary workers were union members from a peak of 33.2% in 1955. Going Forward In 2005, instead of celebrating 50 years of union solidarity within the AFL- CIO seven unions left the AFL-CIO and merged under the new affiliation Change to Win. The seven unions included Service Employees International Union, Laborers International Union of North America, International Brotherhood of Teamsters, Unite Here, United Food and Commercial Workers International, United Farm Workers and the Brotherhood of Carpenters and Joiners Union Change to Win has focused a majority of its budget to organizing. The AFL/CIO will be competing with them for new members. Both organizations have stated they will seek to organize many of the 50 million workers whose jobs cannot be sent overseas or replaced by machines. Those jobs include local government, janitors, cashiers, nursing home aides and security guards. The Department of Labor 5 releases statistics every year. The following is a snapshot of some of the 2006 statistics: A total of 3,723 minors were illegally employed, an average of 3.4 minors illegally employed per investigation. Hazardous Occupation Order violations were found in a third of the cases with child labor violations. The Employment Standards Administration s Wage and Hour Division recovered more than $171.5 million in back wages for over 246,000 employees. In fiscal year 2006, the agency collected nearly $50.6 million in back wages for approximately 86,700 workers in low-wage industries - an increase of over 10 percent of back wages collected in the same low-wage industries during the previous fiscal year. Over a third of WHD enforcement resources are attributed to investigations in nine low-wage industries, which include day care, restaurants, janitorial services, and temporary help. These statistics are evidentiary that even in the 21 st Century; many employers are not complying with basic employment laws. Just as the International Ladies Garment Workers Union (ILGWU) and John L. Lewis had tried to improve the 6

wages, hours and working conditions for the workers at the Triangle Shirtwaist Factory, for the Steel Workers and others, today s unions speak to the same issues. In addition, today s union s are monitoring statistics and forecasting socio-economic factors that may significantly impact employees and the workplace in general. Andy Stern is the President of the Service Employees International Union. In his book Getting America Back on Track, A Country that Works 6 he cites the following: By 2010, 25 percent of all jobs are expected to be contingent, meaning that the workers who hold those jobs will lack the rights of regular employees or even any expectation of long-term employment. If minimum wage had increased at the same rate as CEO s salaries since 1990 it would be $23.03 an hour and the average production worker would be making an annual salary of $110,000. In the past twenty years, the number of families declaring bankruptcy because of health emergency has gone up 2,000 percent. BLS June 2005 statistics survey of employer costs, union workers earns an average of $10.27 more per hour in total compensation than did nonunion workers. 92 percent of union workers are covered by medical benefits, compared with 68 percent of nonunion workers. Mr. Stern may be providing us with a commercial for organizing platforms that we will see going forward. Mr. Stern points out that workers have increased productivity but issues regarding real wages, contingent workers, contracting out of work, medical benefits, and social security benefits remain unresolved. The Change to Win 7 website states the mission is to secure the American Dream for all working people. The Change to Win website cites: Wages of Union workers averages 28% higher than non-union workers. The AFL/CIO website 8 and the Change to Win websites reflect organizing campaigns and lobbying efforts that could change tomorrow s work force through greater representation in labor unions especially in the private sector. The ties between labor and politics are not new. The Employee Free Choice Act (H.R. 1696 and S. 842) and the RESPECT Act (H.R. 1644/S.969) are both proposed legislation that speak to union organizing and union membership. Employers that don t adhere to laws regarding wages, hours and appropriate working conditions are delaying the inevitable whether that equates to lawsuits, legal penalties, work related injuries, turnover or employee representation by labor unions. The decision not to pay people or provide working conditions that can or will result in industrial accidents or injuries is bad management. American businesses are transferring work to other countries in 7

order to control labor costs among other reasons. You can hardly pick up five items without finding one with the label made in China cited one union leader. As a result several labor organizations are taking a more active role oversees in the garment industry as well as manufacturing. Are we simply transferring unaddressed problems and delaying costs along with the out sourcing of work? In April 2007, the Associated Press 9 reported that 32 workers were killed at a steel plant in China while in the process of transporting molten steel. The accident occurred at the Qinghe Special Steel Corporation when a steel ladle suddenly dropped and 30 tons of the liquid spilled out into a workshop 16 feet away. The same report cited that industrial accidents killed more than 127,000 people in China in 2005. According to the Department of Labor statistics previously cited in 2006, local government has the highest union membership rate at 41.9%. The fact is we have seen a trend in local government to organize contingent workers and an attempt to provide health insurance for these employees, true to Mr. Stern s predictions. No one is speaking to the increase in Union membership within local government. But the evidence remains that an employee s value of unions weakens when a positive work environment exists, when employers adhere to legislative requirements and when there are consistent practices and policies. The value of unions appear to decrease when there is regular communication within all levels of an organization; when management listens and responds and employees feel that they are heard. A culture of fear and inconsistency invites representation and inspires more union involvement. Going forward all employers will need to monitor trends regarding safety, hours and working conditions and provide employees a voice, and most importantly listen and address those concerns whether employees are represented by a Union or not. Good management, positive work environments that are safe and lawful should prevail whether a Union is present or not. It also makes good business sense. The cost can be calculated in good financial plans or spent later in loss of production, legal costs and penalties. You can pay them now or later. Inflation will take its toll paying later. Submitted by: Helen Del Grosso, SPHR Employee Relations Manager City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 (650) 329-2534 Helen.delgrosso@cityofpaloalto.org May 2007 8

1 William Bork, Massacre at Republic Steel (Illinois Labor History Museum) <www.kentlaw.edu> 2 U.S. Department of Labor, Mine Safety and Health Administration <www.msha.gov/stats> 3 Robert F. Kennedy, The Enemy Within (New York: Harper & Brothers, 1960) 275-276. 4 U.S. Department of Labor, Bureau of Labor Statistics < www.bls.gov> 5 U.S. Department of Labor, Employment Standards Administration, Wage and Hour Division www.dol.gov/esa/whd/statistics> 6 Andrew Stern, Getting America Back on Track, A Country That Works (New York: Free Press, 2006)5,7,12,17 7 Change to Win, the American Dream for American Workers <wwwchangetowin.org> 8 AFL/CIO, America s Union Movement <www.aflcio.org> 9 Associated Press, 32 Workers Killed in China Steel Plant Accident April 18, 2007 <www.msnbc.com> 9