Outsourcing and union power |
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Authors: | Charles R Perry |
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Institution: | (1) University of Pennsylvania, 19104 Philadelphia, PA |
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Abstract: | The outsourcing of union work and jobs either diffuses or diminishes union membership, depending on perspective and situation.
The correlation of trends in union membership to trends in union power, while less than perfect, has until recently been relatively
strong over the past sixteen years. The fact that as diverse a sample of unions as AFSCME, SEIU, and UAW have chosen to make
outsourcing a prominent labor/public relations issue suggests that the correlation continues to be perceived by the union
movement to be significant, notwithstanding the efforts of the “new” leadership of the AFL-CIO to break that link with respect
to union political power by “taxing” member unions and their members to contribute both money and militancy to the 1996 election
cycle.
Although outsourcing may lead only to the diffusion of union membership either within or between unions, as opposed to the
diminution of union membership, this fact has not received a great deal of attention. The net effect on total union membership
of outsourcing from one union employer to another union employer is unclear, although the effect on the membership of the
union at the outsourcing employer is not. The redistribution of membership within a union as a result of outsourcing is likely
to have little immediate impact on union power. However, as even the best case scenario presented above suggests, it may have
significant long-run deleterious effects on union bargaining power by taking labor out of a sheltered market and putting it
into potentially competitive market. This is particularly likely to be the case when outsourcing (1) places the outsourced
work into a different industry or wage contour and (2) creates the possibility of moving from sole-source to multiplesource
supplier arrangements.
The redistribution of membership between unions as a result of outsourcing is unlikely to have a major impact on union power
broadly defined. It can have, however, serious deleterious effects in terms of the power of an individual union, as suggested
in my “competitive case” scenario. The fact that one union’s losses due to outsourcing may be another union’s gain is of little
consolation to the losing union. That act, in and of itself, may make the threat of outsourcing a potential union “Achilles
heel” at the bargaining table by placing it into competition with some other, perhaps unknown, union as well as possibly nonunion
competition.
The most obvious threat to union power comes from outsourcing that diminishes union membership overall by transferring jobs
from union to nonunion employers. The willingness and ability of employers to move work/jobs entirely out of the orbit of
union control constitutes, in terms of power and particularly union bargaining power, a revisitation of the phenomenon of
the “runaway shop.” It may also be viewed as a proactive form of hiring permanent replacements for (potentially) striking
workers. The union options in dealing with such a challenge are to endeavor to preclude outsourcing through legislation or
collective bargaining or to chase the work by organizing the unorganized, hopefully with the help of the unionized outsourcing
employer. Neither option may be easy, but as the 1996 auto industry negotiations suggest, the former may be less difficult
than the latter. The possibility that outsourcing from union to nonunion employer may provide unions with the power to organize
from the top (outsourcer) down (outsourcee) cannot be entirely ignored as the issue of supplier “neutrality” reportedly was
raised in the 1996 auto negotiations.
The adverse effects of outsourcing on union political and financial power, by virtue of its impact on the level or distribution
of union membership, can and may well be offset by an increase in union activism—as measured by dues levels, merger activity,
organizing commitment, and political action. The adverse effects of outsourcing on union bargaining power are more problematical
from the union standpoint. The effect of outsourcing, whatever its rationale or scenario, appears to be to put union labor
back into competition. Thus, outsourcing constitutes yet another challenge to the labor movement in its ongoing and seemingly
increasingly unsuccessful battle to take and keep U.S. union labor out of competition by proving itself able and willing to
organize to the extent of the market and standardizing wages in that market. |
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