Behind the Lines

Sticking It to the Union

The hectic but familiar day of workers in a Smithfield pork-processing plant was interrupted on January 24, when 21 workers were pulled off the line and arrested by a band of Immigration and Customs Enforcement agents.

The company claims the raid on the North Carolina plant was a “routine” immigration check, but union activists cry foul. They argue this was just the latest stunt in a 15-year campaign by Smithfield to discourage unionization among its workers. In three different suits, Smithfield has been found guilty of violations of federal labor law, including threats to cut wages or close the plant, spying on union supporters, firing union supporters and physically assaulting employees [see “The 10 Worst Corporations of 2006,” Multinational Monitor, November/December 2006].

Smithfield, while a dramatic case, is not an anomaly. Nationwide union rates are dropping at a remarkable pace and employer intimidation is partly to blame. One in five union activists were fired illegally in 2005, according to a report released in January by the Washington, D.C.-based Center for Economic and Policy Research (CEPR).

“There is fairly ferocious employer opposition to unions,” says John Schmitt, author of the report and a senior economist at CEPR. “If you fire one or two people, the rest will think twice.” Schmitt says that current labor laws punish violations such as illegal firings with minimal penalties for employers, even though such actions have devastating consequences for employees. If an ousted worker manages to get their case before the National Labor Relations Board (NLRB) — and actually wins the case — the employee will be reinstated into a suspicious, hostile work environment and the back pay received will typically be far less than the wage earned when working at the company.

“Given these small penalties for illegal firings, the [National Labor Relations Act] NLRA, in practice, has given employers a powerful anti-union strategy: fire one or more prominent pro-union employees — typically workers involved in organizing the union — with the hope of disrupting the internal workings of the union’s campaign, while intimidating the rest of the potential bargaining unit,” Schmitt writes in his report. While the number of illegal firings peaked in the early 1980s, that number has been on the rise again since 2000.

Michael Eastman, executive director for labor policy at the Chamber of Commerce, brushes off these reports, saying that fired workers are merely individuals with complaints. “Many times individuals are discharged and coincidentally they are involved with union organizing,” he says. “I would disagree with reports that suggest it is because of employer maleficience.”

Instead, Eastman compares unions to failing businesses. “Unions are having trouble selling their product,” he says. “They don’t have the right message.”

Some industries have lost more unions than others, however. Schmitt found that manufacturing, long considered a “union job,” showed the largest union membership declines.

These findings may be explained by a 2000 study reporting that 68 percent of employers in “mobile industries,” such as manufacturing, communications and distribution, responded to union activity by threatening to shut down part or all of their operations. The study, led by Kate Bronfenbrenner, director of Labor Education Research at Cornell University, found that only 36 percent of employers in immobile industries, such as construction, health care and retail, made similar threats [see “Raw Power,” by Kate Bronfenbrenner, Multinational Monitor, December 2000].

“We found that the recent acceleration in capital mobility has had a devastating impact on the extent and nature of union organizing campaigns,” the study states. “Where employers can credibly threaten to shut down and/or move their operations in response to union activity, they do so in large numbers.”

While threats can be effective, most employers also call in reinforcements: unionbusters. Generally describing themselves as labor or management consultants, unionbusters specialize in campaigning against unions with tactics ranging from videos and pamphlets, to one-on-one meetings. One such firm, the Labor Relations Institute (LRI) advertises its ability to “develop a campaign strategy that emphasizes your organization’s strengths and the union’s many weaknesses.” It also offers propaganda items such as “Unions Suck” suckers and sponges printed with “Don’t get soaked for union dues. Vote No!” that are “specifically designed to create a positive bandwagon effect as election day approaches,” according to the firm’s  web site. LRI also sells anti-union videos with titles including “Union Battleground” and “Your Job on the Line” or pamphlets reading “Don’t Be A Loser — Stay Union-Free.”

While largely operating under the radar, unionbusters have been a core feature of union election landscape since the 1970s and are hired by 75 percent of employers facing a union organizing drive, Bronfenbrenner found.

“By the 1990s, the consultants themselves, their anti-union ideology and their vast armory of counter-organizing tactics had all become deeply ingrained in the fabric of labor-management relations, with disastrous consequences for unions and for employees intent on exercising their legal right to organize,” wrote John Logan, of the London School of Economics, in a 2002 report, “The Union-Free Movement in the USA.” Logan’s study found that employers are willing to shell out tens of thousands of dollars for anti-union consulting, with some bills reaching into the millions of dollars.

And while these firms brag about their impact to employers, they are loathe to speak about their work publicly. Philip Wilson, vice president and general counsel of LRI Management Services, says he is “not interested in participating in an interview about what we do.”

CEPR’s Schmitt doesn’t see the downward trend of union rates changing anytime soon. He says activists will have to wait until after the elections in 2008 for hope of successfully pressing for changes in U.S. labor law. Even with the sophisticated tactics of unionbusters, Schmitt says, “The biggest obstacles in U.S. labor are the labor laws, even if you do all the right things.”

— Jennifer Wedekind

Out of Work

The number of people unemployed worldwide remained at an historical high in 2006 despite strong global economic growth, according to the International Labor Organization’s (ILO’s) January report, “Global Employment Trends Brief 2007.”

The ILO reported that even though more people are working globally than ever before, the number of unemployed remained at an all-time high of 195.2 million in 2006, a global rate of 6.3 percent. This rate was almost unchanged from the previous year.

The ILO report counts workers in the informal sector, self-employed persons and unpaid family members as employed.

The ILO also reports only modest gains in lifting some of the world’s 1.37 billion working poor — those working but living on less than the equivalent of $2 per person, per day — out of poverty. It stresses that there aren’t enough decent and productive jobs to raise them and their families above the $2 poverty line.

“The strong economic growth of the last half decade has only had a slight impact on the reduction of the number of workers who live with their families in poverty and this was only true in a handful of countries. In addition, growth failed to reduce global unemployment,” says ILO Director-General Juan Somavia.

“What’s more, even with continued strong global economic growth in 2007, there is serious concern about the prospects for decent job creation and reducing working poverty further.”

The report says that to make long-term inroads into unemployment and working poverty, it is essential that periods of high growth be better used to generate more decent and productive jobs. Reducing unemployment and working poverty through creation of such jobs should be viewed as a precondition for sustained economic growth.

Jose Salazar Xirinachs, the ILO’s executive director of the employment sector, says that an integrated approach is needed to increase the job content of growth.

Policymakers need to balance high-productivity sector growth and labor-intensive growth, he says. In the area of macro-economic policy, they should avoid a preoccupation with inflation leading to overly restrictive fiscal and monetary policy, he says.

Another area of importance, he adds, is trade policy. In this period of trade negotiations and bilateral agreements, Xirinachs says, it is important to pay attention to gradualism and orderly adjustments. There is also a need to take into account the employment effects of trade agreements.

Xirinachs also points to the need to pay attention to the role of small and medium sized enterprises (SMEs). It is crucial to have policies to promote the SME sector, as in many countries it is the SME segment that is more dynamic in job creation.

He also highlights institutional and labor market interventions as another important area, in terms of finding the right balance between flexibility in labor market regulations and protection for workers.

According to the ILO report, at the end of 2006, 2.9 billion people aged 15 and older were in work, up 1.6 percent from the previous year.

How many of the new jobs created in 2006 were decent jobs is difficult to estimate, but given that the share of working poor in total employment decreased from 54.8 percent in 1996 to 47.4 percent in 2006, it is likely that at least some of the jobs were productive enough to help people work themselves and their families out of poverty, the ILO says.

Among the main findings of the report is that, for the last decade, economic growth has been reflected more in rising levels of productivity and less in growing employment. While world productivity increased by 26 percent, the global number of those employed rose by only 16.6 percent.

The last decade has also witnessed a decline in the share of the world’s working-age population (aged 15 years and older) that is in employment. This employment-to-population ratio stood at 61.4 percent in 2006. This was 1.2 percentage points lower than 10 years earlier. The decrease was larger among young people (aged 15 to 24). Within this group, the ratio decreased from 51 percent in 1996 to 46.8 percent in 2006.

The increasing proportion of young people in school may in part explain this reduction, said the ILO.

Unemployment hit young people the hardest, with 86.3 million young people accounting for 44 percent of the world’s total unemployed in 2006.

The gap between men and women continued, with 48.9 percent of women employed in 2006, compared with 74 percent of men. A decade earlier, in 1996, 49.6 percent of women and 75.7 percent of men were employed.

In 2006, the employment share of the service sector in total global employment progressed from 39.5 percent to 40 percent and, for the first time, overtook the share of agriculture, which fell from 39.7 percent to 38.7 percent. The industry sector represented 21.3 percent of total employment.

The report said that in most of the regions, unemployment rates did not change markedly between 2005 and 2006.

East Asia’s unemployment rate was 3.6 percent, the lowest in the world. For the fifth consecutive year, East Asian economies have had GDP growth of over 8 percent. This was underpinned by China’s growth rate of more than 10 percent. Despite such solid economic expansion, the total number of unemployed increased in 2006 by more than the previous year. The change was small enough, however, for the unemployment rate to rise by only 0.1 percentage points, to 3.6 percent.

Current estimates suggest that the number of people in East Asia working but still living with their families on below $2 a day fell to 347 million (or 44.2 percent of those in work) in 2006.

Slightly positive labor market trends in recent years in Latin America and the Caribbean are partly the result of three successive years of economic growth of over 4 percent. The unemployment rate decreased fractionally from 8.1 percent to 8 percent in 2006, which was about the same level as 10 years earlier.

Positive labor market trends are also reflected in a decrease in working poverty. The total numbers, as well as the share of those working but still living in poverty with their families, have decreased both at the $1- and $2-a-day poverty levels ever since reaching a high in 2003. Still, in 2006 almost one-third of those employed lived in households where each family member had to live on less than $2 a day.

According to the report, the Middle East and North Africa remained the region with the highest unemployment rate in the world, at 12.2 percent in 2006. Sub-Saharan Africa’s rate stood at 9.8 percent, the second highest in the world. Sub-Saharan Africa also had the highest share in working poverty, with eight out of 10 women and men living on less than $2 a day with their families.

The ILO estimates that the global number of employed people earning $1 a day or less declined between 2001 and 2006. However, in Sub-Saharan Africa, it increased by another 14 million; the number held constant in Latin America and the Middle East and North Africa.

“Nowadays, the widespread conviction is that decent work is the only sustainable way to reduce poverty, which is why the target of ‘full, productive and decent employment’ will be a new target within the Millennium Development Goals in 2007. Therefore, it is now the time for governments as well as the international community to make sure that the favorable economic conditions in most parts of the world will be translated into decent job growth,” the report concludes.

—Kanaga Raja, Third World Network Features/South-North Development Monitor (SUNS). Kanaga Raja is a researcher with Third World Network based in Geneva, Switzerland.