Labour Unions and the Workers of the Future
From: Page 36, Scientific American - August 1998 (News and Analysis - Economics)
Look for the Union Label
New analysis of economic data shows that unionization could maximize productivity.After nearly a century of union-management warfare in the U.S., a series of nationwide surveys showing that union shops dominate the ranks of the country's most productive workplaces may come as a surprise. In fact, according to Lisa M. Lynch of Tufts University and Sandra E. Black of the Federal Reserve Bank of New York, economic Darwinism - the survival of the fittest championed by generations of hard-nosed tycoons - may be doing what legions of organizers could not: putting an end to autocratic bosses and regimented workplaces.
American industry has been trying to reinvent itself for more than 20 years. Management gurus have proclaimed Theories X, Y and Z, not to mention Quality Circles, Total Quality Management (TQM) and High Output Management. Only in the past few years, however, have any solid data become available on which techniques work and which don't. Businesses do not always respond to surveys, and previous attempts to collect data ran into response rates of as low as 6 percent, making their results unrepresentative. Enter the U.S. Census's Educational Quality of the Workforce National Employer Survey, first conducted in 1994, which collected data on business practices from a nationally representative sample of more than 1,500 workplaces.
Lynch and Black correlated the survey data with other statistics that detailed the productivity of each business in the sample. They took as their "typical" establishment a non-union company with limited profit sharing and without TQM or other formal quality-enhancing methods. (Unionized firms constituted about 20 percent of the sample, consistent with the waning reach of organized labor in the U.S.)
The average unionized establishment recorded productivity levels 16 percent higher than the baseline firm, whereas average non-union ones scored 11 percent lower. One reason: most of the union shops had adopted so-called formal quality programs, in which up to half the workers meet regularly to discuss workplace issues. Moreover, production workers at these establishments shared in the firms profits, and more than a quarter did their lobs in self-managed teams. Productivity in such union shops was 20 percent above baseline. That small minority of unionized workplaces still following the adversarial line recorded productivity 15 percent lower than the baseline, even worse than the non-union average.
Are these productivity gains the result of high-performance management techniques rather than unionization? No, Lynch and Black say. Adoption of the same methods in non-union establishments yielded only a 10 percent improvement in productivity over the baseline. The doubled gains in well-run union shops, Lynch contends, may result from the greater stake unionized workers have in their place of employment: they can accept or even propose large changes in job practice without worrying that they are cutting their own throats in doing so. (Lynch tells the opposing story of a high-tech company that paid its janitors a small bonus for suggesting a simple measure to speed nightly office cleaning and then laid-off a third of them.)
Even if a union cannot guarantee job security, she says, it enables workers to negotiate on a more or less equal footing. Especially in manufacturing, Lynch notes, unionized workplaces tend to have lower turnover. Consequently, they also reap more benefit from company specific on-the-job training.
These documented productivity gains cast a different light on the declining percentage of unionized workers throughout the U.S. Are employers acting against their own interests when they work to block unionization? Lynch believes that a follow-up survey, with initial analyses due out this winter, may help answer that question and others. Economists will he able to see how many of the previously sampled firms that have traditional management-labor relations managed to stay in business and to what extent the "corporate reengineering" mania of the past few years has paid off. Most serious reengineering efforts - the ones that aren't just downsizing by another name - lead to increased worker involvement, Lynch argues, if only because they require finding out how people actually do their jobs. Armed with that knowledge, and with the willing cooperation of their employees, firms may yet be able to break out of the productivity doldrums.
Paul Wallich
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Neil Rieck
Kitchener - Waterloo - Cambridge, Ontario, Canada.