Trade Unionism Under Globalization

TRADE UNIONISM UNDER GLOBALIZATION: THE DEMISE OF VOLUNTARISM?
SAMUEL ESTREICHER* Trade unionism and political organization are two different ways workers attempt to advance their economic and social objectives. Unions are the institutional expression of workers self- (or third-party-aided) organization. Unions fund themselves through membership dues or other sources and their achievements historically have been measured in the negotiation and enforcement of collective bargaining agreements. Some political negotiation (either political parties or nongovernmental organizations), also claim to represent the interests of worker-members (or persons aligned with their members). Both political parties and nongovernmental organizations are funded by membership dues and other sources; and their achievements are measured in legislation, regulations, and their enforcement. Unlike Europe, the United States has no enduring labor party tradition,1 and the U.S. labor movement has historically separated its role as collective bargaining agency from its political action contributions to candidates for government office. Over the last several decades, trade unions in the United States increasingly have been unable to realize their objectives at the bargaining table and have turned more and more to politics. The turn to the political has been true of labor movements in many European and developing countries for quite some time. Because of the great decline in U.S. manufacturing, and the much-weakened position of trade unions in the
* Dwight D. Opperman Professor of Law; Faculty Director, Center for Labor and Employment Law, New York University School of Law. An early version of this paper was presented as Employee Representation that Makes Sense in Todays World, keynote address at the Conference on Competition in the Global Workplace: The Role of Law in Economic Markets, St. Louis University School of Law, April 3, 2009. I thank Michael Levine, Kevin Kinney, Burt Neuborne, and the NYU Law faculty workshop for helpful comments; any remaining errors are my own. Contact: Samuel.Estreicher@nyu.edu. ALL RIGHTS RESERVED. Copyright 2010 by Samuel Estreicher. 1. See generally SEYMOUR MARTIN LIPSET & GARY MARKS, IT DIDNT HAPPEN HERE: WHY SOCIALISM FAILED IN THE UNITED STATES (2000).
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private sectordue in significant part to globalization2U.S. exceptionalism in this regard may be going by the boards as well. I. Trade unionism in private companies is a declining phenomenon in nearly all developed countries. In the United States, for example, union contracts cover a little less than eight percent of workers in the private sector and over half of the members of the two leading union federations (the AFL-CIO and Change to Win) are workers in government offices even though public-sector employment is only one-sixth of the overall workforce.3 The rate of decline may be slower in other developed countries, but the story of private-sector unionism decline is nearly universal, at least if viewed in terms of membership as opposed to contract coverage (where because of multiemployer bargaining structures and extension laws, contract coverage in some European countries far outstrips union membership).4 What started as a movement of workers against private capital is, in a sense, now a
2. My first sustained effort at exploring this issue is Samuel Estreicher, Labor Law Reform in a World of Competitive Product Markets, 69 CHI.-KENT L. REV. 3 (1993) (Kenneth M. Piper Lecture in Labor Law at IITs Chicago-Kent School of Law). 3. See tbls.1 & 4, infra Part II. In 2009, union members accounted for 12.3% of employed wage and salary workers, a slight decline from the previous year; in 1983, the first year for which comparable data are available, the union membership rate was 20.1%. (Because of the effect of
union security clauses, the percentage of employees covered by union contracts is usually a percentage point higher than the membership rate.) Workers in government offices had a union membership rate (37.4%) over five times that of private sector employees (7.2%), and account for half of total union membership even though government work is a little more than one-fifth the size of the private workforce. See U.S. DEPT. OF LABOR, BUREAU LAB. STATS., NEWS USDL10-0069, TABLE 3: UNION AFFILIATION OF EMPLOYED WAGE AND SALARY WORKERS BY OCCUPATION AND INDUSTRY (Jan. 22, 2010), http://www.bls.gov/news.release/union2.t03.htm. The data in this government release refers to members of a labor union or an employee association similar to a union, and presumably includes the three-million-member National Education Association which is not affiliated, though often politically aligned, with the AFL-CIO and Change to Win. Id. The split within the U.S. labor movement (which may soon be repaired) is evaluated in Samuel Estreicher, Disunity Within the House of Labor: Change to Win or to Stay the Course?, 27 J. LAB. RES. 505, 506 (2006); see also Samuel Estreicher, Think Global, Act Local: Employee Representation in a World of Global Labor and Product Market Competition , 4 VA. L. & BUS. REV. 81, 82 (2009). 4. See Jelle Visser, Union Membership Statistics in 24 Countries, MONTHLY LAB. REV., Jan. 2006, at 38. See also Barry T. Hirsch, Sluggish Institutions in a Dynamic World: Can Unions and Industrial Competition Coexist?, 22 J. ECON. PERSP., Winter 2008, at 153; David G. Blanchflower, A Cross-Country Study of Union Membership, INST. FOR THE STUDY OF LAB., No. 2016 (March 2006).
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movement of government workers, government contractor employees, and aid recipients against public capital.5 Unions also are decreasingly able to influence the terms and conditions of private employment by negotiating labor contracts. More and more, unions turn to the state to legislate (and guarantee) wages, hours, and benefits. What started as an expression of the self-organization of working people seeking what U.S. labor law terms true freedom of contract now takes the form of organized participation in the pluralist group bargaining process that is our political democracy. The fabled voluntarism of Samuel Gompers, the founding president of the American Federation of Law (AFL), the first successful union federation in this countrythat workers have to improve their lot by their own struggle, secure those gains through their own efforts and not depend on the stateno longer expresses the view of any major labor organization or leader. The increasing importance of politics to labor, and vice versa, finds expression in the influence of labor unions in the Obama administration and in its drive to legislate a public right to healthcare coverage and subsidize certain industries.6 We see a similar phenomenon in other countries. Recently, Germany enacted minimum wage laws in certain industries, replacing what had been a system based on the normative force of industry-wide collective bargaining agreements.7 Early in the Blair administration, the United Kingdom instituted minimum wage councils because collective bargaining agreements were not effectively setting minimum standards.8 Indeed, one could view much of the European Union project as an attempt to substitute public law for contract in many areas of economic life. Of course, the dedication of U.S. trade unions to private market solutions, even in the supposed halcyon days of the Gompers presidency of the AFL, was never absolute.9 Along with opposition to certain legislative
5. See generally Samuel Estreicher, Negotiating the Peoples Capital, 25 J. LAB. RES. 189, 191 (2004). 6. See, e.g., AFL-CIO, Health Care Cant Wait, http://www.aflcio.org/issues/healthcare/ (last visited Feb. 15, 2010). 7. See Friederike Gobbels, German Minimum-Wage Law Enacted, 2 Jones Day European Labor & Employment Law Update 3 (Issue 1, Aug. 2009) (discussing MindestarbeitsbedingungersetzMiARbG (Minimum Working Conditions Act), ver. of April 22, 2009, BundesgesetzblattTeil ISeite 818, Federal Law GazettePart ISide 818).
8. See David Metcalf, The British National Minimum Wage, 37 BRIT. J. INDUS. REL. 171 (Dec. 2002). 9. Some have argued that the voluntarism of Gompers and the early AFL reflected not so much deeply or sincerely held ideology but the brute reality of court hostility to maximum hours and other social legislation. See WILLIAM E. FORBATH, LAW AND THE SHAPING OF THE AMERICAN LABOR MOVEMENT (1991).
solutions, such as social insurance, the Federation supported workers compensation laws and prevailing wage laws for government contractors.10 Moreover, with the onset of the Great Depression, which undermined faith in unregulated markets, both the AFL and the breakaway federation, the Congress of Industrial Organization (CIO), broadened their political aims, developed strong political action committees, and made significant contributions in cash and in kind, largely to Democratic candidates for the White House, Congress, and state houses. Indeed, with the AFL-CIO merger in 1955, organized labors political influence expanded beyond purely labor relations concerns to include its critical backing of important social legislation such as the civil rights laws in the 1960s.11 Thus by the mid-1930s, organized labor rejected narrow conceptions of voluntarism, but the essential focus of U.S. trade unionism until the recent period was on securing and enforcing strong contracts in existing bargaining units, with some limited organizing of new units. Politics was an adjunct, a supplement to trade unionism. We are now, however, beginning to see a qualitative change in labors relationship to the state: trade unionism as a supplement to politics. Labors economic objectives have not changed; the means are undergoing substantial transformation. The thesis of this paper is that largely in response to the deepening of competitive forces in private markets in the United Statesderegulation, changing technology, and the opening up of global labor and product markets (due to decreasing transportation and communication costs and the lowering of trade barriers)organized labor increasingly will function predominantly as a political organization. Collective bargaining will continue to provide an institutional raison dtre and critical funding source for unions, but only one (and a diminishing one) of several means for advancing the interests of its members and other constituencies. This is not to suggest the emergence of a labor party on the European model; it is an American variant: the fortunes of the labor movement will become ever more tightly tied to the fortunes of the Democratic Party, and economic goals increasingly will be achieved not at the bargaining table, but through the provision of public resources.
10. See Theron Schlabach, Rationality & Welfare: Public Discussion of Poverty and Social Insurance in the United States 18751935, SOCIAL SECURITY ONLINE: RESEARCH NOTES & SPECIAL STUDIES BY THE HISTORIANS OFFICE, http://www.socialsecurity.gov/history/reports/ schlabach6.html (last visited Feb. 15, 2010). For accounts of the passage of the Davis-Bacon Act of 1931 and other prevailing-wage legislation, see ARMAND J. THIEBLOT, JR., PREVAILING WAGE LEGISLATION (1986) and ARMAND J. THIEBLOT, JR., THE DAVIS-BACON ACT (1975). See also HERBERT R. NORTHRUP, ORGANIZED LABOR AND THE NEGRO (1946). 11. See generally John T. Delaney et al., Evolutionary Politics? Union Differences and Political Activities in the 1990s, 20 J. LAB. RES. 277, 27879 (1999).
II. The turn to politics is not necessarily a good or bad development; it is understandable, if not unavoidable, given the challenges that unions face in private firms.
The unions problems are not in the public sector. In 2008, 36.8% of government workers were union members, and 40.7% were covered by collective bargaining contracts. In 2009, public-sector union members outnumbered public-sector members for the first time in history.12 The extent of unionization of government workes is a remarkable achievement since not all states or localities recognize collective bargaining rights for their employees.13 Unions continue to register gains in the government sectormost recently by convincing a number of state governors and legislatures to establish an agency to act as the employer in collective bargaining with home health care workers.14 Labors problems are in the private sector. Unions will continue to represent segments of the labor force where the costs of delay place a significant premium on avoiding labor stoppage (e.g., big-city commercial construction, airlines), where barriers to entry give incumbent firms some ability to absorb labor cost increases without losing patronage (e.g., construction, airlines, licensed engineers), or where regulation of acquisitions and new areas of service give unions special leverage to extract concessions (e.g., healthcare and communications). But for manufacturing generally, and the vast majority of private-sector companies, the unions task both to organize the workforce and insulate the unionized firm from the ravages of product market competition seems daunting. Most unions, voting with their feet in terms of how they invest organizing resources, have essentially concurred by investing those resources elsewhere. Determining how much globalization, as such, has contributed to union deterioration is difficult.15 U.S. consumers ability to purchase high-quality
12. In 2009, for the first time, unions had more members employed in government offices (7.9 million) than in private companies (7.4 million). See tbl.4 infra; U.S. DEPT. OF LABOR, TABLE 3, supra note 3. 13. See U.S. GEN. ACCOUNTING OFFICE, COLLECTIVE BARGAINING RIGHTS: INFORMATION ON THE NUMBER OF WORKERS WITH AND WITHOUT BARGAINING RIGHTS 89 (2002) (noting that twelve states lacked any collective bargaining laws for state and local employees). 14. See, e.g., Exec. Order No. 09-15, 33 Ill. Reg. 10087 (June 29, 2009) (directing the State of Illinois to establish an agency to bargain with home health care workers). 15. The existing empirical literature on union density and globalization does not clearly indicate a strong, unequivocal relationship. See, e.g., DAVID G. BLANCHFLOWER & ALEX BRYSON, THE UNION WAGE PREMIUM IN THE US AND THE UK 19 (Centre for Economic Performance, London Sch. of Econ. & Pol. Sci., 2004), available at http:www.dartmouth.edu/ ~blnchflr/papers/irralong.pdf; Dale Belman & Paula B. Voos, Changes in Union Wage Effects by
goods made abroad at lower prices than charged for U.S.-made goods, and U.S. companies ability to manufacture goods in places like China for sale back to the United States, has contributed to a shrinking of the manufacturing sector. A substantial literature has developed to attempt to explain the decline of unionism in private companies.16 My own view is that unions have trouble in competitive markets because, at least from the firms point of view, they are net cost-adding institutions17 but are unable to neutralize
Industry: A Fresh Look at the Evidence, 43 INDUS. REL. 491, 518 (2004); Barry T. Hirsch et al., Estimates of Union Density by State, MONTHLY LAB. REV., July 2001, at 54; Elisabetta Magnani & David Prentice, Did Globalization Reduce Unionization? Evidence from US Manufacturing, 10 LAB. ECON. 705, 721 (2003); Matthew J. Slaughter, Globalization and Declining Unionization in the United States, 46 INDUS. REL. 329, 345 (2007). 16. Four major explanations have been offered: (1) Employer Opposition, see JOHN SCHMITT & BEN ZIPPERER, DROPPING THE AX: ILLEGAL FIRINGS DURING UNION ELECTION CAMPAIGNS, 19512007, at 1 (Center for Econ. & Poly Research 2009), available at http://www.wapt.com/download/2007/0105/10678436.pdf; PAUL C. WEILER, GOVERNING THE
WORKPLACE: THE FUTURE OF LABOR AND EMPLOYMENT LAW 10811 (1990); Paul Weiler, Promises to Keep: Securing Workers Rights to Self-Organization Under the NLRA, 96 HARV. L. REV. 1769, 176970 (1983); (2) Changes in Worker Attitudes, see Henry S. Farber & Alan B. Krueger, Union Membership in the United States: The Decline Continues , in EMPLOYEE REPRESENTATION: ALTERNATIVES AND FUTURE DIRECTIONS 105, 130 (Bruce E. Kaufman & Morris M. Kleiner eds., 1993); Sharon Rabin Margalioth, The Significance of Workers Attitudes: Individualism as a Cause for Labors Decline , in EMPLOYEE REPRESENTATION IN THE EMERGING WORKPLACE: ALTERNATIVES/SUPPLEMENTS TO COLLECTIVE BARGAINING: PROCEEDINGS OF NEW YORK UNIVERSITY 50TH ANNUAL CONFERENCE ON LABOR 41116 (Samuel Estreicher ed., 1998); RICHARD B. FREEMAN & JOEL ROGERS, WHAT WORKERS WANT 69 (1999); but see SEYMOUR MARTIN LIPSET ET AL., THE PARADOX OF AMERICAN UNIONISM: WHY AMERICANS LIKE UNIONS MORE THAN CANADIANS DO, BUT JOIN MUCH LESS 9495 (2004); Leo Troy, Is the U.S. Unique in the Decline of Private Sector Unionism?, 11 J. LAB. RES. 111, 13738 (1990); (3) Structural Change, see Henry S. Farber & Bruce Western, Round Up the Usual Suspects: The Decline of Unions in the Private Sector, 19731998, at 2, 36 (Princeton Univ. Dept. of Econ., Working Paper No. 437, 2001); see also LEO TROY, THE NEW UNIONISM IN THE NEW SOCIETY: PUBLIC SECTOR UNIONS IN THE REDISTRIBUTIVE STATE 1 (1994); but see Richard B. Freeman, Contraction and Expansion: The Divergence of Private Sector and Public Sector Unionism in the United States, 2 J. ECON. PERSP. 63, 70 (1988); and (4) Global Labor and Product Market Competition, see Estreicher, Think Global, Act Local, supra note 3, at 81; Michael L. Wachter, Labor Unions: A Corporatist Institution in a Competitive World , 155 U. PA. L. REV. 581, 583 (2007); Estreicher, Labor Law Reform, supra note 2, at 10. 17. To employers in partially-organized industries, unions are perceived as net cost-adding institutions because unions seek to impose wage and benefit levels, seniority structures and job rules that increase the firms net labor costs beyond where they would have been in the absence of unionizationhence, the unions need, posited here, to impose the same cost regime on all competitors of the unionized firm. Unions have also been fairly consistently found to detract from firm profits. See BARRY T. HIRSCH, LABOR UNIONS AND ECONOMIC PERFORMANCE OF FIRMS 8788 (1991); Richard B. Freeman, What Do Unions Do?: The 2004 M-Brane Stringtwister Edition (Natl. Bur. Econ. Res., Working Paper No. 11410, 2005). This is not say,
those costs by organizing the entire product market or by tariffs or prevailing wage laws dampening product market competition.18 This ultimately fuels both employer opposition and withdrawal of capital from the union sector which, in turn, helps explain why there is so little natural growth of union membership or organization in private firms.19 The basic story set forth below in Table 1 is one of tremendous job growth in the private sector (at least until very recently), from 61.8 million jobs in 1973, nearly doubling to 108 million jobs in 2008 (down 5 million in 2009), with the total number of union members actually declining by around six million members during the same period:
Year Total Private Employment Union Members Covered by CBAs % Members 1973 61,886.5 14,954.1 N.A. 24.2 1980 71,440.7 14,331.6 15,525.7 20.1 1990 86,122.5 10,254.8 11,366.4 11.9 1995 91,680.5 9432.1 10,359.8 10.3 2000 101,809.9 9147.7 9968,5 9.0 2005 105,508.46 8225 8961.6 7.8 2008 108,072.6 8625.2 9084.4 7.6 2009 103,357.3 7430.8 8226.1 7.2
Table 1. Union Membership, Coverage, Density and Employment Among Private Sector Workers, 19732009 (in thousands)20
If we look at the fortunes, over the same period, of a historically union density-rich sector like manufacturing, which has been substantially affected by globalization, the picture is somewhat different because
manufacturing employment has declined (whereas overall private sector employment has grown substantially). As Table 2 indicates, private manufacturing lost around 6.5 million jobs, while unions lost nearly the same number of members during this period.
however, that unions necessarily impose net social costsan inquiry beyond the scope of this paper. 18. For my most recent article along these lines, see Samuel Estreicher, Think Global, Act Local, supra note 3. 19. Barry Hirsch suggests that focusing on the overall decline in private sector manufacturing ignores the actual growth in nonunion manufacturing employment (an additional 1.5 million jobs) between 1973 and 2006, despite a 2.5 million decline after 2000. See Hirsh, Sluggish Institutions, supra note 4, at 156. For a positive account of the state of U.S. manufacturing, see DANIEL IKENSON, THRIVING IN A GLOBAL ECONOMY: THE TRUTH ABOUT U.S. MANUFACTURING AND TRADE (Cato Institute, No. 35, Aug. 28, 2007), available at http://www.cato.org/pub_display.php?pub_id=8750. 20. Data in the tables in this paper are adapted from Barry Hirsch & David McPhersons website, Union Stats and Coverage Database, www.unionstats.com (last visited April 6, 2010).
Year Private Manuf. Employment Union Members Covered by CBAs % Members % Covered 1973 20,107.6 7827.7 N.A. 38.9 N.A. 1980 20,850.4 6726 7251.9 32.3 22.2 1990 20,338.6 4197.3 4514.1 20.6 22.2 1995 19,520 3439.6 3657.3 17.6 18.7 2000 19167.3 2831.8 2999.4 14.8 15.6 2005 15,518.4 2016.9 2127.3 13.0 13.7 2008 15,131.4 1723.5 1862.5 11.4 12.3 2009 13,454 1469.5 1594.7 10.9 11.9
Table 2. Union Membership, Coverage, Density, and Employment Among Private Sector Manufacturing Workers, 19732009 (in thousands)
Table 3 combines reports to indicate the extent to which manufacturing workers during this period changed from being a central force in the trade union movement to account for just slightly more than one-fifth of total union membership.
Year Total Private Employment Union Members Manufacturing Employment Union Members % of Total Membership 1973 61,886.5 14,954.1 20,107.6 7827.7 .523 1980 71,440.7 14,331.6 20,850.4 6726.0 .469 1990 86,122 10,254.8 20,338.6 4197.3 .409 1995 91,680.5 9432.1 19,520 3439.6 .364 2000 101,809.9 9147.7 19,167.3 2831.8 .309 2005 105,508.46 8225.0 15,518.4 2016.9 .245 2008 108,072.6 8265.2 15,131.4 1723.5 .208 2009 103,357.3 7430.8 13,454 1469.5 .19
Table 3. Overall Private Sector Union Membership Compared to Union Membership in Private Manufacturing, 1973 2009 (in thousands)
Table 4 offers a glimpse at the relevant importance of private and
public sector membership to the overall trade union movement: from a ratio of one public sector member for every five private sector members in 1973 to near parity in 2008 and numerical predominance in 2009, despite the fact that public employment is only 20% of the overall labor market.
Year Total Private Employment Members Total Public Employment Members Public/Private 1973 61,886.5 14,954.1 13,134.5 3134.5 .209 1980 71,440.7 14,331.6 16,308.8 5763.6 .400 1990 86,122.5 10,254.8 17,782.3 6485 .632 1995 91,680.5 9432.1 18,357.6 6927.4 .734 2000 101,809.9 9147.7 18,975.7 7110.5 .777 2005 105,508.46 8225 20,380.9 7430.4 .903 2008 108,072.6 8265.2 21,304.6 7832.3 .947 2009 103,357.3 7430.8 21,132 7896.5 1.06
Table 4. Overall Private Sector Union Membership Compared to Public Sector Membership, 19732009 (in thousands)
Unions have taken numerous steps to attempt to reverse their fortunes in the private sector, through coalitions with nonlabor groups as well as other unions. First, they have fashioned a strategy called the corporate campaign as an adjunct to traditional organizing. Unions here identify vulnerabilities in target corporationswhether a need for shareholder approval of executive compensation, antitakeover devices, or a going private decision; a need for government approval to build a new wing of a hospital or enter into a new line of service; the scrutiny of regulators over some product mishap; or concerns involving wages or hours worked, antitrust, or other difficulties warranting systemic litigation.21 Unions then organize a campaign of adverse publicity and religious and community boycotts directed at the target and its executives. The objective is to wrest from the target a neutrality and card-check agreement that facilitates union organization in some of the targets facilities. The unions leverage sometimes also comes from pension fund managers and other allies in the institutional shareholder community that organized labor has cultivated over the last two decades.22 Second, unions have made important strides in forging alliances with critical constituencies within the Democratic Party, both through their monetary and in-kind contributions to candidates23 and their support of key
21. For approving accounts, see James J. Brudney, Neutrality Agreements and Card Check Recognition: Prospects for Changing Paradigms, 90 IOWA L. REV. 819 (2005); Adrienne E. Eaton & Jill Kriesky, Union Organizing Under Neutrality Card Check Agreements , 55 Indus. & Lab. Rel. Rev. 42 (2001). For a critical view, see JAROL B. MANHEIM, THE DEATH OF A THOUSAND CUTS: CORPORATE CAMPAIGNS AND THE ATTACK ON THE CORPORATION 39 (2000). 22. See Stewart J. Schwab & Randall S. Thomas, Realigning Corporate Governance: Shareholder Activism by Labor Unions, in EMPLOYEE REPRESENTATION IN THE EMERGING WORKPLACE: ALTERNATIVES/SUPPLEMENTS TO COLLECTIVE BARGAINING: PROCEEDINGS OF NEW YORK UNIVERSITY 50TH ANNUAL CONFERENCE ON LABOR 34147 (Samuel Estreicher ed., 1998). 23. Eight labor organizations figured among the top 20 political action committees (in terms of total expenditures in 200910 election cycle); the Service Employees International Union (SEIU) came in second at $18,335,969, and the American Federation of State, County & Municipal Employee (AFSCME) came in fifth at $9,514,653. See OpenSecrets.org, Political Action Committees, http://opensecrets.org/pacs/ (last visited April 6, 2010). Eleven labor organizations are listed among the top thirty All-Time Donors for 19892010; AFSCME came in second with a $40,965,173 total, 98% of which went to Democratic candidates; the National Education Association, not an affiliate of either labor federation, came in seventh at $29,908,625,
92% of which went to Democratic candidates. OpenSecrets.org, Center for Responsive Politics, Heavy Hitters: Top All-Time Donors 19892010 Summary, http://www.opensecrets.org/orgs/ list.php (last visited Feb. 15, 2010). Among top so-called 527 committees, SEIU came in first with $27,839,177 in expenditures. OpenSecrets.org, Center for Responsive Politics, 527S Committees: Top 50 Federally Focused Organizations: 2008 , http://www.opensecrets.org/527s/ 527cmtes.php (last visited Feb. 15, 2010). The SEIU also engaged in an extensive microtargeting effort during the 2008 campaign. CATALIST, AGGREGATE ACTIVITIES OF
causes pressed by those constituencies, including universal healthcare and legalization of undocumented aliens. The objective is to promote a widespread understanding among Democratic politicians and activists that broad-gauged labor law reform to facilitate union organization is essential. We see this, of course, in the current campaign for the Employee Free Choice Act (EFCA) and the vocal support of most of the media and activist NGOs like Human Rights Watch and moveon.org. Third, unions have also forged ties with state and local legislators (some of whom may be especially indebted to public employee organizations) and community groups to promote enactment of living wage ordinances that, like prevailing wage laws in government-financed construction, arguably help mitigate some of the cost disadvantages of union representation.24 Similarly, with limited success, they have urged that relaxation of trade barriers be accompanied by enforceable labor standards, as exemplified by the recent decision of the Obama administration to impose sanctions on Chinese tire imports.25 This is a partial list but sufficient for present purposes to illustrate the kinds of efforts unions and their allies are engaged in to gain a stronger position in the U.S. private sector. III. Are these union efforts to retake the commanding heights of the private sector likely to succeed? It is too early, of course, to tell definitively. Conceivably, within a year or two, an Obama administration success on healthcare reform may engender sufficient public support for Democratic objectives to embolden U.S. Senators put in office with the help of labor dollars and sweat to vote for an unadulterated version of the EFCA, thus
PROGRESSIVE ORGANIZATIONS IN 2008: COMPILATION OF DATA FROM CATALIST SUBSCRIBERS 3637 (2009); Posting of Marc Ambinder to The Atlantic Politics Channel, http://politics.the atlantic.com/2009/10/seius_data_footprint_in_2008.php (Oct. 6, 2009, 08:54 EST). 24. See Zachary D. Fasman, Living Wage Ordinances and Traditional Labor Law: An Uneasy Conjunction, in COMPENSATION, WORK HOURS AND BENEFITS: PROCEEDING OF NEW YORK UNIVERSITY THE 57TH ANNUAL CONFERENCE ON LABOR 110 (Jeffrey Hirsch ed., 2009); see also Scott L. Cummings & Steven A. Boutcher, Mobilizing Local Government Law for LowWage Workers 1, 34 (The Univ. of Chicago Legal Forum Research Paper No. 09-23, 2009), available at http://ssrn.com/abstract=1472039. 25. See U.S. Office of the Trade Representative, Information Regarding Application of Transitional Product-Specific Safeguard Measure to Chinese Tires, Sept. 17, 2009, available at http://www.ustr.gov/node/5068. For a discussion of buy American provisions in recent economic crisis recovery legislation, see Angelo A. Paparelli & Ted J. Chiappari, Employ America Workers Act: Protectionist Turducken, N.Y.L.J., Feb. 23, 2009, at 3; Laura M. Baughtman & Joseph F. Francois, Chamber of Comm., Trade Actionor Inaction: The Cost for American Workers and Companies, Sept. 15, 2009.
smoothing the path for union organizers. But there is reason to believe that even after passage of a law like EFCA labors problems in the private sector will essentially continue, and that labors turn to the political may produce less fruit than hoped. The experience of Canadian unions in their private sector suggests that even with enactment of EFCA and other laws on labors wish list, such as
protections against strikebreakers, organizing rights for low-level supervisors, and mandatory bargaining over some permissive subjects, labors fortunes in private firms are not likely to be reversed any time soon. Strong pro-union laws can slow down deunionization, but the Canadian experience provides little basis for hope that it will lead to significant increased membership or labor contract coverage.26 This is because, if I may be allowed to lapse into old materialist ways of thinking, law can only do so much to curb material forces. A law like EFCA does not change the basic underlying economic dynamic. If unionization represents significant net labor costs (taking into account the quality and productivity of unionized labor) and unions cannot impose the same costs on the competition, legal employer opposition will continue unabated. Legal employer opposition may come earlier in the game under EFCA; employers of any significant size are likely to engage in a continuous anti-union educational campaign among their workforce. Many employees, once informed that unions cannot, in fact, deliver job security, will hesitate to sign union authorization cards, even under a card-check regime. Moreover, even if a unionization drive at a particular facility succeeds, this will be like being hit by lightning; because under EFCA, as proposed, an arbitrator will decide contract terms which, if the experience of the U.S. public sector is instructive, will have little relation to actual economic constraints on the organized firm. Companies are likely to do whatever they lawfully can to escape this fate. There is, moreover, no guarantee against capital flight, as well as no guarantee that the company will make needed capital investments in the unionized sector of its business rather than invest in other parts of the country or other countries where labor costs are considerably lower. Concern about such a dynamic change helps explain why labor has strongly supported passage of single-payer universal healthcare, and is a
26. In 2004, the unionization rate in the Canadian commercial sector (which excludes public services
TRADE UNIONISM UNDER GLOBALIZATION: THE DEMISE OF VOLUNTARISM? SAMUEL ESTREICHER* Trade unionism and political organization are two different ways workers attempt to advance their economic and social objectives. Unions are the institutional expression of workers self- (or third-party-aided) organization. Unions fund themselves through membership dues or other sources and their achievements historically have been measured in the negotiation and enforcement of collective bargaining agreements. Some political negotiation (either political parties or nongovernmental organizations), also claim to represent the interests of worker-members (or persons aligned with their members). Both political parties and nongovernmental organizations are funded by membership dues and other sources; and their achievements are measured in legislation, regulations, and their enforcement. Unlike Europe, the United States has no enduring labor party tradition,1 and the U.S. labor movement has historically separated its role as collective bargaining agency from its political action contributions to candidates for government office. Over the last several decades, trade unions in the United States increasingly have been unable to realize their objectives at the bargaining table and have turned more and more to politics. The turn to the political has been true of labor movements in many European and developing
countries for quite some time. Because of the great decline in U.S. manufacturing, and the much-weakened position of trade unions in the
* Dwight D. Opperman Professor of Law; Faculty Director, Center for Labor and Employment Law, New York University School of Law. An early version of this paper was presented as Employee Representation that Makes Sense in Todays World, keynote address a t the Conference on Competition in the Global Workplace: The Role of Law in Economic Markets, St. Louis University School of Law, April 3, 2009. I thank Michael Levine, Kevin Kinney, Burt Neuborne, and the NYU Law faculty workshop for helpful comments; any remaining errors are my own. Contact: Samuel.Estreicher@nyu.edu. ALL RIGHTS RESERVED. Copyright 2010 by Samuel Estreicher. 1. See generally SEYMOUR MARTIN LIPSET & GARY MARKS, IT DIDNT HAPPEN HERE: WHY SOCIALISM FAILED IN THE UNITED STATES (2000).
private sectordue in significant part to globalization2U.S. exceptionalism in this regard may be going by the boards as well. I. Trade unionism in private companies is a declining phenomenon in nearly all developed countries. In the United States, for example, union contracts cover a little less than eight percent of workers in the private sector and over half of the members of the two leading union federations (the AFL-CIO and Change to Win) are workers in government offices even though public-sector employment is only one-sixth of the overall workforce.3 The rate of decline may be slower in other developed countries, but the story of private-sector unionism decline is nearly universal, at least if viewed in terms of membership as opposed to contract coverage (where because of multiemployer bargaining structures and extension laws, contract coverage in some European countries far outstrips union membership).4 What started as a movement of workers against private capital is, in a sense, now a
2. My first sustained effort at exploring this issue is Samuel Estreicher, Labor Law Reform in a World of Competitive Product Markets, 69 CHI.-KENT L. REV. 3 (1993) (Kenneth M. Piper Lecture in Labor Law at IITs Chicago-Kent School of Law). 3. See tbls.1 & 4, infra Part II. In 2009, union members accounted for 12.3% of employed wage and salary workers, a slight decline from the previous year; in 1983, the first year for which comparable data are available, the union membership rate was 20.1%. (Because of the effect of union security clauses, the percentage of employees covered by union contracts is usually a percentage point higher than the membership rate.) Workers in government offices had a union membership rate (37.4%) over five times that of private sector employees (7.2%), and account for half of total union membership even though government work is a little more than one-fifth the size of the private workforce. See U.S. DEPT. OF LABOR, BUREAU LAB. STATS., NEWS USDL10-0069, TABLE 3: UNION AFFILIATION OF EMPLOYED WAGE AND SALARY WORKERS BY OCCUPATION AND INDUSTRY (Jan. 22, 2010), http://www.bls.gov/news.release/union2.t03.htm. The data in this government release refers to members of a labor union or an employee association similar to a union, and presumably includes the three-million-member National Education Association which is not affiliated, though often politically aligned, with the AFL-CIO and Change to Win. Id. The split within the U.S. labor movement (which may soon be repaired) is evaluated in Samuel Estreicher, Disunity Within the House of Labor: Change to Win or to Stay the Course?, 27 J. LAB. RES. 505, 506 (2006); see also Samuel Estreicher, Think Global, Act Local: Employee Representation in a World of Global Labor and Product Market Competition , 4 VA. L. & BUS. REV. 81, 82 (2009). 4. See Jelle Visser, Union Membership Statistics in 24 Countries, MONTHLY LAB. REV., Jan. 2006, at 38. See also Barry T. Hirsch, Sluggish Institutions in a Dynamic World: Can Unions and Industrial Competition Coexist?, 22 J. ECON. PERSP., Winter 2008, at 153; David G. Blanchflower, A Cross-Country Study of Union Membership, INST. FOR THE STUDY OF LAB., No. 2016 (March 2006).
movement of government workers, government contractor employees, and aid recipients against public capital.5 Unions also are decreasingly able to influence the terms and conditions of private employment by negotiating labor contracts. More and more,
unions turn to the state to legislate (and guarantee) wages, hours, and benefits. What started as an expression of the self-organization of working people seeking what U.S. labor law terms true freedom of contract now takes the form of organized participation in the pluralist group bargaining process that is our political democracy. The fabled voluntarism of Samuel Gompers, the founding president of the American Federation of Law (AFL), the first successful union federation in this countrythat workers have to improve their lot by their own struggle, secure those gains through their own efforts and not depend on the stateno longer expresses the view of any major labor organization or leader. The increasing importance of politics to labor, and vice versa, finds expression in the influence of labor unions in the Obama administration and in its drive to legislate a public right to healthcare coverage and subsidize certain industries.6 We see a similar phenomenon in other countries. Recently, Germany enacted minimum wage laws in certain industries, replacing what had been a system based on the normative force of industry-wide collective bargaining agreements.7 Early in the Blair administration, the United Kingdom instituted minimum wage councils because collective bargaining agreements were not effectively setting minimum standards.8 Indeed, one could view much of the European Union project as an attempt to substitute public law for contract in many areas of economic life. Of course, the dedication of U.S. trade unions to private market solutions, even in the supposed halcyon days of the Gompers presidency of the AFL, was never absolute.9 Along with opposition to certain legislative
5. See generally Samuel Estreicher, Negotiating the Peoples Capital, 25 J. LAB. RES. 189, 191 (2004). 6. See, e.g., AFL-CIO, Health Care Cant Wait, http://www.aflcio.org/issues/healthcare/ (last visited Feb. 15, 2010). 7. See Friederike Gobbels, German Minimum-Wage Law Enacted, 2 Jones Day European Labor & Employment Law Update 3 (Issue 1, Aug. 2009) (discussing MindestarbeitsbedingungersetzMiARbG (Minimum Working Conditions Act), ver. of April 22, 2009, BundesgesetzblattTeil ISeite 818, Federal Law GazettePart ISide 818). 8. See David Metcalf, The British National Minimum Wage, 37 BRIT. J. INDUS. REL. 171 (Dec. 2002). 9. Some have argued that the voluntarism of Gompers and the early AFL reflected not so much deeply or sincerely held ideology but the brute reality of court hostility to maximum hours and other social legislation. See WILLIAM E. FORBATH, LAW AND THE SHAPING OF THE AMERICAN LABOR MOVEMENT (1991).
solutions, such as social insurance, the Federation supported workers compensation laws and prevailing wage laws for government contractors.10 Moreover, with the onset of the Great Depression, which undermined faith in unregulated markets, both the AFL and the breakaway federation, the Congress of Industrial Organization (CIO), broadened their political aims, developed strong political action committees, and made significant contributions in cash and in kind, largely to Democratic candidates for the White House, Congress, and state houses. Indeed, with the AFL-CIO merger in 1955, organized labors political influence expanded beyond purely labor relations concerns to include its critical backing of important social legislation such as the civil rights laws in the 1960s.11 Thus by the mid-1930s, organized labor rejected narrow conceptions of voluntarism, but the essential focus of U.S. trade unionism until the recent period was on securing and enforcing strong contracts in existing
bargaining units, with some limited organizing of new units. Politics was an adjunct, a supplement to trade unionism. We are now, however, beginning to see a qualitative change in labors relationship to the state: trade unionism as a supplement to politics. Labors economic objectives have not changed; the means are undergoing substantial transformation. The thesis of this paper is that largely in response to the deepening of competitive forces in private markets in the United Statesderegulation, changing technology, and the opening up of global labor and product markets (due to decreasing transportation and communication costs and the lowering of trade barriers)organized labor increasingly will function predominantly as a political organization. Collective bargaining will continue to provide an institutional raison dtre and critical funding source for unions, but only one (and a diminishing one) of several means for advancing the interests of its members and other constituencies. This is not to suggest the emergence of a labor party on the European model; it is an American variant: the fortunes of the labor movement will become ever more tightly tied to the fortunes of the Democratic Party, and economic goals increasingly will be achieved not at the bargaining table, but through the provision of public resources.
10. See Theron Schlabach, Rationality & Welfare: Public Discussion of Poverty and Social Insurance in the United States 18751935, SOCIAL SECURITY ONLINE: RESEARCH NOTES & SPECIAL STUDIES BY THE HISTORIANS OFFICE, http://www.socialsecurity.gov/history/reports/ schlabach6.html (last visited Feb. 15, 2010). For accounts of the passage of the Davis-Bacon Act of 1931 and other prevailing-wage legislation, see ARMAND J. THIEBLOT, JR., PREVAILING WAGE LEGISLATION (1986) and ARMAND J. THIEBLOT, JR., THE DAVIS-BACON ACT (1975). See also HERBERT R. NORTHRUP, ORGANIZED LABOR AND THE NEGRO (1946). 11. See generally John T. Delaney et al., Evolutionary Politics? Union Differences and Political Activities in the 1990s, 20 J. LAB. RES. 277, 27879 (1999).
II. The turn to politics is not necessarily a good or bad development; it is understandable, if not unavoidable, given the challenges that unions face in private firms. The unions problems are not in the public sector. In 2008, 36.8% of government workers were union members, and 40.7% were covered by collective bargaining contracts. In 2009, public-sector union members outnumbered public-sector members for the first time in history.12 The extent of unionization of government workes is a remarkable achievement since not all states or localities recognize collective bargaining rights for their employees.13 Unions continue to register gains in the government sectormost recently by convincing a number of state governors and legislatures to establish an agency to act as the employer in collective bargaining with home health care workers.14 Labors problems are in the private sector. Unions will continue to represent segments of the labor force where the costs of delay place a significant premium on avoiding labor stoppage (e.g., big-city commercial construction, airlines), where barriers to entry give incumbent firms some ability to absorb labor cost increases without losing patronage (e.g., construction, airlines, licensed engineers), or where regulation of acquisitions and new areas of service give unions special leverage to extract concessions (e.g., healthcare and communications). But for manufacturing generally, and the vast majority of private-sector companies, the unions task both to organize the workforce and insulate the unionized firm from the ravages of product market competition seems daunting. Most
unions, voting with their feet in terms of how they invest organizing resources, have essentially concurred by investing those resources elsewhere. Determining how much globalization, as such, has contributed to union deterioration is difficult.15 U.S. consumers ability to purchase high-quality
goods made abroad at lower prices than charged for U.S.-made goods, and U.S. companies ability to manufacture goods in places like China for sale back to the United States, has contributed to a shrinking of the manufacturing sector. A substantial literature has developed to attempt to explain the decline of unionism in private companies.16 My own view is that unions have trouble in competitive markets because, at least from the firms point of view, they are net cost-adding institutions17 but are unable to neutralize
Industry: A Fresh Look at the Evidence, 43 INDUS. REL. 491, 518 (2004); Barry T. Hirsch et al., Estimates of Union Density by State, MONTHLY LAB. REV., July 2001, at 54; Elisabetta Magnani & David Prentice, Did Globalization Reduce Unionization? Evidence from US Manufacturing , 10 LAB. ECON. 705, 721 (2003); Matthew J. Slaughter, Globalization and Declining Unionization in the United States, 46 INDUS. REL. 329, 345 (2007). 16. Four major explanations have been offered: (1) Employer Opposition, see JOHN SCHMITT & BEN ZIPPERER, DROPPING THE AX: ILLEGAL FIRINGS DURING UNION ELECTION CAMPAIGNS, 19512007, at 1 (Center for Econ. & Poly Research 2009), available at http://www.wapt.com/download/2007/0105/10678436.pdf; P AUL C. WEILER, GOVERNING THE WORKPLACE: THE FUTURE OF LABOR AND EMPLOYMENT LAW 10811 (1990); Paul Weiler, Promises to Keep: Securing Workers Rights to Self-Organization Under the NLRA, 96 HARV. L. REV. 1769, 176970 (1983); (2) Changes in Worker Attitudes, see Henry S. Farber & Alan B. Krueger, Union Membership in the United States: The Decline Continues, in EMPLOYEE REPRESENTATION: ALTERNATIVES AND FUTURE DIRECTIONS 105, 130 (Bruce E. Kaufman & Morris M. Kleiner eds., 1993); Sharon Rabin Margalioth, The Significance of Workers Attitudes: Individualism as a Cause for Labors Decline , in EMPLOYEE REPRESENTATION IN THE EMERGING WORKPLACE: ALTERNATIVES/SUPPLEMENTS TO COLLECTIVE BARGAINING: PROCEEDINGS OF NEW YORK UNIVERSITY 50TH ANNUAL CONFERENCE ON LABOR 41116 (Samuel Estreicher ed., 1998); RICHARD B. FREEMAN & JOEL ROGERS, WHAT WORKERS WANT 69 (1999); but see SEYMOUR MARTIN LIPSET ET AL., THE PARADOX OF AMERICAN UNIONISM: WHY AMERICANS LIKE UNIONS MORE THAN CANADIANS DO, BUT JOIN MUCH LESS 9495 (2004); Leo Troy, Is the U.S. Unique in the Decline of Private Sector Unionism?, 11 J. LAB. RES. 111, 13738 (1990); (3) Structural Change, see Henry S. Farber & Bruce Western, Round Up the Usual Suspects: The Decline of Unions in the Private Sector, 1973 1998, at 2, 36 (Princeton Univ. Dept. of Econ., Working Paper No. 437, 2001); see also LEO TROY, THE NEW UNIONISM IN THE NEW SOCIETY: PUBLIC SECTOR UNIONS IN THE REDISTRIBUTIVE STATE 1 (1994); but see Richard B. Freeman, Contraction and Expansion: The Divergence of Private Sector and Public Sector Unionism in the United States, 2 J. ECON. PERSP. 63, 70 (1988); and (4) Global Labor and Product Market Competition, see Estreicher, Think Global, Act Local, supra note 3, at 81; Michael L. Wachter, Labor Unions: A Corporatist Institution in a Competitive World , 155 U. PA. L. REV. 581, 583 (2007); Estreicher, Labor Law Reform, supra note 2, at 10. 17. To employers in partially-organized industries, unions are perceived as net cost-adding institutions because unions seek to impose wage and benefit levels, seniority structures and job rules that increase the firms net labor costs beyond where they would have been in the absence of unionizationhence, the unions need, posited here, to impose the same cost regime on all
competitors of the unionized firm. Unions have also been fairly consistently found to detract from firm profits. See BARRY T. HIRSCH, LABOR UNIONS AND ECONOMIC PERFORMANCE OF FIRMS 8788 (1991); Richard B. Freeman, What Do Unions Do?: The 2004 M-Brane Stringtwister Edition (Natl. Bur. Econ. Res., Working Paper No. 11410, 2005). This is not say,
Year Total Private Employment Union Members Covered by CBAs % Members 1973 61,886.5 14,954.1 N.A. 24.2 1980 71,440.7 14,331.6 15,525.7 20.1 1990 86,122.5 10,254.8 11,366.4 11.9 1995 91,680.5 9432.1 10,359.8 10.3 2000 101,809.9 9147.7 9968,5 9.0 2005 105,508.46 8225 8961.6 7.8 2008 108,072.6 8625.2 9084.4 7.6 2009 103,357.3 7430.8 8226.1 7.2
If we look at the fortunes, over the same period, of a historically union density-rich sector like manufacturing, which has been substantially affected by globalization, the picture is somewhat different because manufacturing employment has declined (whereas overall private sector employment has grown substantially). As Table 2 indicates, private manufacturing lost around 6.5 million jobs, while unions lost nearly the same number of members during this period.
Year Private Manuf. Employment Union Members Covered by CBAs
% Members % Covered 1973 20,107.6 7827.7 N.A. 38.9 N.A. 1980 20,850.4 6726 7251.9 32.3 22.2 1990 20,338.6 4197.3 4514.1 20.6 22.2 1995 19,520 3439.6 3657.3 17.6 18.7 2000 19167.3 2831.8 2999.4 14.8 15.6 2005 15,518.4 2016.9 2127.3 13.0 13.7 2008 15,131.4 1723.5 1862.5 11.4 12.3 2009 13,454 1469.5 1594.7 10.9 11.9
Year Total Private Employment Union Members Manufacturing Employment Union Members % of Total Membership 1973 61,886.5 14,954.1 20,107.6 7827.7 .523 1980 71,440.7 14,331.6 20,850.4 6726.0 .469 1990 86,122 10,254.8 20,338.6 4197.3 .409 1995 91,680.5 9432.1 19,520 3439.6 .364 2000 101,809.9 9147.7 19,167.3 2831.8 .309 2005 105,508.46 8225.0 15,518.4 2016.9 .245 2008 108,072.6 8265.2 15,131.4 1723.5 .208 2009 103,357.3 7430.8 13,454 1469.5 .19
Table 3. Overall Private Sector Union Membership Compared to Union Membership in Private Manufacturing, 19732009 (in thousands)
Table 4 offers a glimpse at the relevant importance of private and public sector membership to the overall trade union movement: from a ratio of one public sector member for every five private sector members in 1973 to near parity in 2008 and numerical predominance in 2009, despite the fact that public employment is only 20% of the overall labor market.
Unions have taken numerous steps to attempt to reverse their fortunes in the private sector, through coalitions with nonlabor groups as well as other unions. First, they have fashioned a strategy called the corporate
campaign as an adjunct to traditional organizing. Unions here identify vulnerabilities in target corporationswhether a need for shareholder approval of executive compensation, antitakeover devices, or a going private decision; a need for government approval to build a new wing of a hospital or enter into a new line of service; the scrutiny of regulators over some product mishap; or concerns involving wages or hours worked, antitrust, or other difficulties warranting systemic litigation.21 Unions then organize a campaign of adverse publicity and religious and community boycotts directed at the target and its executives. The objective is to wrest from the target a neutrality and card-check agreement that facilitates union organization in some of the targets facilities. The unions leverage sometimes also comes from pension fund managers and other allies in the institutional shareholder community that organized labor has cultivated over the last two decades.22 Second, unions have made important strides in forging alliances with critical constituencies within the Democratic Party, both through their monetary and in-kind contributions to candidates23 and their support of key
21. For approving accounts, see James J. Brudney, Neutrality Agreements and Card Check Recognition: Prospects for Changing Paradigms, 90 IOWA L. REV. 819 (2005); Adrienne E. Eaton & Jill Kriesky, Union Organizing Under Neutrality Card Check Agreements , 55 Indus. & Lab. Rel. Rev. 42 (2001). For a critical view, see JAROL B. MANHEIM, THE DEATH OF A THOUSAND CUTS: CORPORATE CAMPAIGNS AND THE ATTACK ON THE CORPORATION 39 (2000). 22. See Stewart J. Schwab & Randall S. Thomas, Realigning Corporate Governance: Shareholder Activism by Labor Unions, in EMPLOYEE REPRESENTATION IN THE EMERGING WORKPLACE: ALTERNATIVES/SUPPLEMENTS TO COLLECTIVE BARGAINING: PROCEEDINGS OF NEW YORK UNIVERSITY 50TH ANNUAL CONFERENCE ON LABOR 34147 (Samuel Estreicher ed., 1998). 23. Eight labor organizations figured among the top 20 political action committees (in terms of total expenditures in 200910 election cycle); the Service Employees International Union (SEIU) came in second at $18,335,969, and the American Federation of State, County & Municipal Employee (AFSCME) came in fifth at $9,514,653. See OpenSecrets.org, Political Action Committees, http://opensecrets.org/pacs/ (last visited April 6, 2010). Eleven labor organizations are listed among the top thirty All-Time Donors for 19892010; AFSCME came in second with a $40,965,173 total, 98% of which went to Democratic candidates; the National Education Association, not an affiliate of either labor federation, came in seventh at $29,908,625, 92% of which went to Democratic candidates. OpenSecrets.org, Center for Responsive Politics, Heavy Hitters: Top All-Time Donors 19892010 Summary, http://www.opensecrets.org/orgs/ list.php (last visited Feb. 15, 2010). Among top so-called 527 committees, SEIU came in first with $27,839,177 in expenditures. OpenSecrets.org, Center for Responsive Politics, 527S Committees: Top 50 Federally Focused Organizations: 2008, http://www.opensecrets.org/527s/ 527cmtes.php (last visited Feb. 15, 2010). The SEIU also engaged in an extensive microtargeting effort during the 2008 campaign. CATALIST, AGGREGATE ACTIVITIES OF
causes pressed by those constituencies, including universal healthcare and legalization of undocumented aliens. The objective is to promote a widespread understanding among Democratic politicians and activists that broad-gauged labor law reform to facilitate union organization is essential. We see this, of course, in the current campaign for the Employee Free Choice Act (EFCA) and the vocal support of most of the media and activist NGOs like Human Rights Watch and moveon.org. Third, unions have also forged ties with state and local legislators (some of whom may be especially indebted to public employee organizations) and community groups to promote enactment of living wage ordinances that, like prevailing wage laws in government-financed construction, arguably help mitigate some of the cost disadvantages of union representation.24 Similarly, with limited success, they have urged that relaxation of trade barriers be accompanied by enforceable labor standards, as exemplified by the recent decision of the Obama
administration to impose sanctions on Chinese tire imports.25 This is a partial list but sufficient for present purposes to illustrate the kinds of efforts unions and their allies are engaged in to gain a stronger position in the U.S. private sector. III. Are these union efforts to retake the commanding heights of the private sector likely to succeed? It is too early, of course, to tell definitively. Conceivably, within a year or two, an Obama administration success on healthcare reform may engender sufficient public support for Democratic objectives to embolden U.S. Senators put in office with the help of labor dollars and sweat to vote for an unadulterated version of the EFCA, thus
PROGRESSIVE ORGANIZATIONS IN 2008: COMPILATION OF DATA FROM CATALIST SUBSCRIBERS 3637 (2009); Posting of Marc Ambinder to The Atlantic Politics Channel, http://politics.the atlantic.com/2009/10/seius_data_footprint_in_2008.php (Oct. 6, 2009, 08:54 EST). 24. See Zachary D. Fasman, Living Wage Ordinances and Traditional Labor Law: An Uneasy Conjunction, in COMPENSATION, WORK HOURS AND BENEFITS: PROCEEDING OF NEW YORK UNIVERSITY THE 57TH ANNUAL CONFERENCE ON LABOR 110 (Jeffrey Hirsch ed., 2009); see also Scott L. Cummings & Steven A. Boutcher, Mobilizing Local Government Law for LowWage Workers 1, 34 (The Univ. of Chicago Legal Forum Research Paper No. 09-23, 2009), available at http://ssrn.com/abstract=1472039. 25. See U.S. Office of the Trade Representative, Information Regarding Application of Transitional Product-Specific Safeguard Measure to Chinese Tires, Sept. 17, 2009, available at http://www.ustr.gov/node/5068. For a discussion of buy American provisions in recent economic crisis recovery legislation, see Angelo A. Paparelli & Ted J. Chiappari, Employ America Workers Act: Protectionist Turducken, N.Y.L.J., Feb. 23, 2009, at 3; Laura M. Baughtman & Joseph F. Francois, Chamber of Comm., Trade Actionor Inaction: The Cost for American Workers and Companies, Sept. 15, 2009.
smoothing the path for union organizers. But there is reason to believe that even after passage of a law like EFCA labors problems in the private sector will essentially continue, and that labors turn to the political may produce less fruit than hoped. The experience of Canadian unions in their private sector suggests that even with enactment of EFCA and other laws on labors wish list, such as protections against strikebreakers, organizing rights for low-level supervisors, and mandatory bargaining over some permissive subjects, labors fortunes in private firms are not likely to be reversed any time soon. Strong pro-union laws can slow down deunionization, but the Canadian experience provides little basis for hope that it will lead to significant increased membership or labor contract coverage.26 This is because, if I may be allowed to lapse into old materialist ways of thinking, law can only do so much to curb material forces. A law like EFCA does not change the basic underlying economic dynamic. If unionization represents significant net labor costs (taking into account the quality and productivity of unionized labor) and unions cannot impose the same costs on the competition, legal employer opposition will continue unabated. Legal employer opposition may come earlier in the game under EFCA; employers of any significant size are likely to engage in a continuous anti-union educational campaign among their workforce. Many employees, once informed that unions cannot, in fact, deliver job security, will hesitate to sign union authorization cards, even under a card-check regime. Moreover, even if a unionization drive at a particular facility succeeds, this will be like being hit by lightning; because under EFCA, as proposed, an arbitrator will decide contract terms which, if the experience of the U.S. public sector is instructive, will have little relation to actual economic constraints on the organized firm. Companies are likely to do
whatever they lawfully can to escape this fate. There is, moreover, no guarantee against capital flight, as well as no guarantee that the company will make needed capital investments in the unionized sector of its business rather than invest in other parts of the country or other countries where labor costs are considerably lower. Concern about such a dynamic change helps explain why labor has strongly supported passage of single-payer universal healthcare, and is a
TRADE UNIONISM UNDER GLOBALIZATION: THE DEMISE OF VOLUNTARISM? SAMUEL ESTREICHER* Trade unionism and political organization are two different ways workers attempt to advance their economic and social objectives. Unions are the institutional expression of workers self- (or third-party-aided) organization. Unions fund themselves through membership dues or other sources and their achievements historically have been measured in the negotiation and enforcement of collective bargaining agreements. Some political negotiation (either political parties or nongovernmental organizations), also claim to represent the interests of worker-members (or persons aligned with their members). Both political parties and nongovernmental organizations are funded by membership dues and other sources; and their achievements are measured in legislation, regulations, and their enforcement. Unlike Europe, the United States has no enduring labor party tradition,1 and the U.S. labor movement has historically separated its role as collective bargaining agency from its political action contributions to candidates for government office. Over the last several decades, trade unions in the United States increasingly have been unable to realize their objectives at the bargaining table and have turned more and more to politics. The turn to the political has been true of labor movements in many European and developing countries for quite some time. Because of the great decline in U.S. manufacturing, and the much-weakened position of trade unions in the
* Dwight D. Opperman Professor of Law; Faculty Director, Center for Labor and Employment Law, New York University School of Law. An early version of this paper was presented as Employee Representation that Makes Sense in Todays World, keynote address at the Conference on Competition in the Global Workplace: The Role of Law in Economic Markets, St. Louis University School of Law, April 3, 2009. I thank Michael Levine, Kevin Kinney, Burt Neuborne, and the NYU Law faculty workshop for helpful comments; any remaining errors are my own. Contact: Samuel.Estreicher@nyu.edu. ALL RIGHTS RESERVED. Copyright 2010 by Samuel Estreicher. 1. See generally SEYMOUR MARTIN LIPSET & GARY MARKS, IT DIDNT HAPPEN HERE: WHY SOCIALISM FAILED IN THE UNITED STATES (2000).
private sectordue in significant part to globalization2U.S. exceptionalism in this regard may be going by the boards as well. I. Trade unionism in private companies is a declining phenomenon in nearly all developed countries. In the United States, for example, union contracts cover a little less than eight percent of workers in the private sector and over half of the members of the two leading union federations (the AFL-CIO and Change to Win) are workers in government offices even
though public-sector employment is only one-sixth of the overall workforce.3 The rate of decline may be slower in other developed countries, but the story of private-sector unionism decline is nearly universal, at least if viewed in terms of membership as opposed to contract coverage (where because of multiemployer bargaining structures and extension laws, contract coverage in some European countries far outstrips union membership).4 What started as a movement of workers against private capital is, in a sense, now a
2. My first sustained effort at exploring this issue is Samuel Estreicher, Labor Law Reform in a World of Competitive Product Markets, 69 CHI.-KENT L. REV. 3 (1993) (Kenneth M. Piper Lecture in Labor Law at IITs Chicago-Kent School of Law). 3. See tbls.1 & 4, infra Part II. In 2009, union members accounted for 12.3% of employed wage and salary workers, a slight decline from the previous year; in 1983, the first year for which comparable data are available, the union membership rate was 20.1%. (Because of the effect of union security clauses, the percentage of employees covered by union contracts is usually a percentage point higher than the membership rate.) Workers in government offices had a union membership rate (37.4%) over five times that of private sector employees (7.2%), and account for half of total union membership even though government work is a little more than one-fifth the size of the private workforce. See U.S. DEPT. OF LABOR, BUREAU LAB. STATS., NEWS USDL10-0069, TABLE 3: UNION AFFILIATION OF EMPLOYED WAGE AND SALARY WORKERS BY OCCUPATION AND INDUSTRY (Jan. 22, 2010), http://www.bls.gov/news.release/union2.t03.htm. The data in this government release refers to members of a labor union or an employee association similar to a union, and presumably includes the three-million-member National Education Association which is not affiliated, though often politically aligned, with the AFL-CIO and Change to Win. Id. The split within the U.S. labor movement (which may soon be repaired) is evaluated in Samuel Estreicher, Disunity Within the House of Labor: Change to Win or to Stay the Course?, 27 J. LAB. RES. 505, 506 (2006); see also Samuel Estreicher, Think Global, Act Local: Employee Representation in a World of Global Labor and Product Market Competition, 4 VA. L. & BUS. REV. 81, 82 (2009). 4. See Jelle Visser, Union Membership Statistics in 24 Countries, MONTHLY LAB. REV., Jan. 2006, at 38. See also Barry T. Hirsch, Sluggish Institutions in a Dynamic World: Can Unions and Industrial Competition Coexist?, 22 J. ECON. PERSP., Winter 2008, at 153; David G. Blanchflower, A Cross-Country Study of Union Membership, INST. FOR THE STUDY OF LAB., No. 2016 (March 2006).
movement of government workers, government contractor employees, and aid recipients against public capital.5 Unions also are decreasingly able to influence the terms and conditions of private employment by negotiating labor contracts. More and more, unions turn to the state to legislate (and guarantee) wages, hours, and benefits. What started as an expression of the self-organization of working people seeking what U.S. labor law terms true freedom of contract now takes the form of organized participation in the pluralist group bargaining process that is our political democracy. The fabled voluntarism of Samuel Gompers, the founding president of the American Federation of Law (AFL), the first successful union federation in this countrythat workers have to improve their lot by their own struggle, secure those gains through their own efforts and not depend on the stateno longer expresses the view of any major labor organization or leader. The increasing importance of politics to labor, and vice versa, finds expression in the influence of labor unions in the Obama administration and in its drive to legislate a public right to healthcare coverage and subsidize certain industries.6 We see a similar phenomenon in other countries. Recently, Germany enacted minimum wage laws in certain industries, replacing what had been a system based on the normative force of industry-wide collective bargaining agreements.7 Early in the Blair administration, the United Kingdom instituted minimum wage councils because collective bargaining agreements were not effectively setting minimum standards.8 Indeed, one could view much of the European
Union project as an attempt to substitute public law for contract in many areas of economic life. Of course, the dedication of U.S. trade unions to private market solutions, even in the supposed halcyon days of the Gompers presidency of the AFL, was never absolute.9 Along with opposition to certain legislative
5. See generally Samuel Estreicher, Negotiating the Peoples Capital, 25 J. LAB. RES. 189, 191 (2004). 6. See, e.g., AFL-CIO, Health Care Cant Wait, http://www.aflcio.org/issues/healthcare/ (last visited Feb. 15, 2010). 7. See Friederike Gobbels, German Minimum-Wage Law Enacted, 2 Jones Day European Labor & Employment Law Update 3 (Issue 1, Aug. 2009) (discussing MindestarbeitsbedingungersetzMiARbG (Minimum Working Conditions Act), ver. of April 22, 2009, BundesgesetzblattTeil ISeite 818, Federal Law GazettePart ISide 818). 8. See David Metcalf, The British National Minimum Wage, 37 BRIT. J. INDUS. REL. 171 (Dec. 2002). 9. Some have argued that the voluntarism of Gompers and the early AFL reflected not so much deeply or sincerely held ideology but the brute reality of court hostility to maximum hours and other social legislation. See WILLIAM E. FORBATH, LAW AND THE SHAPING OF THE AMERICAN LABOR MOVEMENT (1991).
solutions, such as social insurance, the Federation supported workers compensation laws and prevailing wage laws for government contractors.10 Moreover, with the onset of the Great Depression, which undermined faith in unregulated markets, both the AFL and the breakaway federation, the Congress of Industrial Organization (CIO), broadened their political aims, developed strong political action committees, and made significant contributions in cash and in kind, largely to Democratic candidates for the White House, Congress, and state houses. Indeed, with the AFL-CIO merger in 1955, organized labors political influence expanded beyond purely labor relations concerns to include its critical backing of important social legislation such as the civil rights laws in the 1960s.11 Thus by the mid-1930s, organized labor rejected narrow conceptions of voluntarism, but the essential focus of U.S. trade unionism until the recent period was on securing and enforcing strong contracts in existing bargaining units, with some limited organizing of new units. Politics was an adjunct, a supplement to trade unionism. We are now, however, beginning to see a qualitative change in labors relationship to the state: trade unionism as a supplement to politics. Labors economic objectives have not changed; the means are undergoing substantial transformation. The thesis of this paper is that largely in response to the deepening of competitive forces in private markets in the United Statesderegulation, changing technology, and the opening up of global labor and product markets (due to decreasing transportation and communication costs and the lowering of trade barriers)organized labor increasingly will function predominantly as a political organization. Collective bargaining will continue to provide an institutional raison dtre and critical funding source for unions, but only one (and a diminishing one) of several means for advancing the interests of its members and other constituencies. This is not to suggest the emergence of a labor party on the European model; it is an American variant: the fortunes of the labor movement will become ever more tightly tied to the fortunes of the Democratic Party, and economic goals increasingly will be achieved not at the bargaining table, but through the provision of public resources.
10. See Theron Schlabach, Rationality & Welfare: Public Discussion of Poverty and Social Insurance in the United States 18751935, SOCIAL SECURITY ONLINE: RESEARCH NOTES &
SPECIAL STUDIES BY THE HISTORIANS OFFICE, http://www.socialsecurity.gov/history/reports/ schlabach6.html (last visited Feb. 15, 2010). For accounts of the passage of the Davis-Bacon Act of 1931 and other prevailing-wage legislation, see ARMAND J. THIEBLOT, JR., PREVAILING WAGE LEGISLATION (1986) and ARMAND J. THIEBLOT, JR., THE DAVIS-BACON ACT (1975). See also HERBERT R. NORTHRUP, ORGANIZED LABOR AND THE NEGRO (1946). 11. See generally John T. Delaney et al., Evolutionary Politics? Union Differences and Political Activities in the 1990s, 20 J. LAB. RES. 277, 27879 (1999).
II. The turn to politics is not necessarily a good or bad development; it is understandable, if not unavoidable, given the challenges that unions face in private firms. The unions problems are not in the public sector. In 2008, 36.8% of government workers were union members, and 40.7% were covered by collective bargaining contracts. In 2009, public-sector union members outnumbered public-sector members for the first time in history.12 The extent of unionization of government workes is a remarkable achievement since not all states or localities recognize collective bargaining rights for their employees.13 Unions continue to register gains in the government sectormost recently by convincing a number of state governors and legislatures to establish an agency to act as the employer in collective bargaining with home health care workers.14 Labors problems are in the private sector. Unions will continue to represent segments of the labor force where the costs of delay place a significant premium on avoiding labor stoppage (e.g., big-city commercial construction, airlines), where barriers to entry give incumbent firms some ability to absorb labor cost increases without losing patronage (e.g., construction, airlines, licensed engineers), or where regulation of acquisitions and new areas of service give unions special leverage to extract concessions (e.g., healthcare and communications). But for manufacturing generally, and the vast majority of private-sector companies, the unions task both to organize the workforce and insulate the unionized firm from the ravages of product market competition seems daunting. Most unions, voting with their feet in terms of how they invest organizing resources, have essentially concurred by investing those resources elsewhere. Determining how much globalization, as such, has contributed to union deterioration is difficult.15 U.S. consumers ability to purchase high-quality
goods made abroad at lower prices than charged for U.S.-made goods, and U.S. companies ability to manufacture goods in places like China for sale back to the United States, has contributed to a shrinking of the manufacturing sector.
A substantial literature has developed to attempt to explain the decline of unionism in private companies.16 My own view is that unions have trouble in competitive markets because, at least from the firms point of view, they are net cost-adding institutions17 but are unable to neutralize
Industry: A Fresh Look at the Evidence, 43 INDUS. REL. 491, 518 (2004); Barry T. Hirsch et al., Estimates of Union Density by State, MONTHLY LAB. REV., July 2001, at 54; Elisabetta Magnani & David Prentice, Did Globalization Reduce Unionization? Evidence from US Manufacturing, 10 LAB. ECON. 705, 721 (2003); Matthew J. Slaughter, Globalization and Declining Unionization in the United States, 46 INDUS. REL. 329, 345 (2007). 16. Four major explanations have been offered: (1) Employer Opposition, see JOHN SCHMITT & BEN ZIPPERER, DROPPING THE AX: ILLEGAL FIRINGS DURING UNION ELECTION CAMPAIGNS, 19512007, at 1 (Center for Econ. & Poly Research 2009), available at http://www.wapt.com/download/2007/0105/10678436.pdf; P AUL C. WEILER, GOVERNING THE WORKPLACE: THE FUTURE OF LABOR AND EMPLOYMENT LAW 10811 (1990); Paul Weiler, Promises to Keep: Securing Workers Rights to Self-Organization Under the NLRA, 96 HARV. L. REV. 1769, 176970 (1983); (2) Changes in Worker Attitudes, see Henry S. Farber & Alan B. Krueger, Union Membership in the United States: The Decline Continues , in EMPLOYEE REPRESENTATION: ALTERNATIVES AND FUTURE DIRECTIONS 105, 130 (Bruce E. Kaufman & Morris M. Kleiner eds., 1993); Sharon Rabin Margalioth, The Significance of Workers Attitudes: Individualism as a Cause for Labors Decline, in EMPLOYEE REPRESENTATION IN THE EMERGING WORKPLACE: ALTERNATIVES/SUPPLEMENTS TO COLLECTIVE BARGAINING: PROCEEDINGS OF NEW YORK UNIVERSITY 50TH ANNUAL CONFERENCE ON LABOR 41116 (Samuel Estreicher ed., 1998); RICHARD B. FREEMAN & JOEL ROGERS, WHAT WORKERS WANT 69 (1999); but see SEYMOUR MARTIN LIPSET ET AL., THE PARADOX OF AMERICAN UNIONISM: WHY AMERICANS LIKE UNIONS MORE THAN CANADIANS DO, BUT JOIN MUCH LESS 9495 (2004); Leo Troy, Is the U.S. Unique in the Decline of Private Sector Unionism?, 11 J. LAB. RES. 111, 13738 (1990); (3) Structural Change, see Henry S. Farber & Bruce Western, Round Up the Usual Suspects: The Decline of Unions in the Private Sector, 1973 1998, at 2, 36 (Princeton Univ. Dept. of Econ., Working Paper No. 437, 2001); see also LEO TROY, THE NEW UNIONISM IN THE NEW SOCIETY: PUBLIC SECTOR UNIONS IN THE REDISTRIBUTIVE STATE 1 (1994); but see Richard B. Freeman, Contraction and Expansion: The Divergence of Private Sector and Public Sector Unionism in the United States, 2 J. ECON. PERSP. 63, 70 (1988); and (4) Global Labor and Product Market Competition, see Estreicher, Think Global, Act Local, supra note 3, at 81; Michael L. Wachter, Labor Unions: A Corporatist Institution in a Competitive World , 155 U. PA. L. REV. 581, 583 (2007); Estreicher, Labor Law Reform, supra note 2, at 10. 17. To employers in partially-organized industries, unions are perceived as net cost-adding institutions because unions seek to impose wage and benefit levels, seniority structures and job rules that increase the firms net labor costs beyond where they would have been in the absence of unionizationhence, the unions need, posited here, to impose the same cost regime on all competitors of the unionized firm. Unions have also been fairly consistently found to detract from firm profits. See BARRY T. HIRSCH, LABOR UNIONS AND ECONOMIC PERFORMANCE OF FIRMS 8788 (1991); Richard B. Freeman, What Do Unions Do?: The 2004 M-Brane Stringtwister Edition (Natl. Bur. Econ. Res., Working Paper No. 11410, 2005). This is not say,
Year Total Private Employment Union Members Covered by CBAs % Members
1973 61,886.5 14,954.1 N.A. 24.2 1980 71,440.7 14,331.6 15,525.7 20.1 1990 86,122.5 10,254.8 11,366.4 11.9 1995 91,680.5 9432.1 10,359.8 10.3 2000 101,809.9 9147.7 9968,5 9.0 2005 105,508.46 8225 8961.6 7.8 2008 108,072.6 8625.2 9084.4 7.6 2009 103,357.3 7430.8 8226.1 7.2
If we look at the fortunes, over the same period, of a historically union density-rich sector like manufacturing, which has been substantially affected by globalization, the picture is somewhat different because manufacturing employment has declined (whereas overall private sector employment has grown substantially). As Table 2 indicates, private manufacturing lost around 6.5 million jobs, while unions lost nearly the same number of members during this period.
Year Private Manuf. Employment Union Members Covered by CBAs % Members % Covered 1973 20,107.6 7827.7 N.A. 38.9 N.A. 1980 20,850.4 6726 7251.9 32.3 22.2 1990 20,338.6 4197.3 4514.1 20.6 22.2 1995 19,520 3439.6 3657.3 17.6 18.7 2000 19167.3 2831.8 2999.4 14.8 15.6 2005 15,518.4 2016.9 2127.3 13.0 13.7 2008 15,131.4 1723.5 1862.5 11.4 12.3 2009 13,454 1469.5 1594.7 10.9 11.9
Year Total Private Employment Union Members Manufacturing Employment Union Members
% of Total Membership 1973 61,886.5 14,954.1 20,107.6 7827.7 .523 1980 71,440.7 14,331.6 20,850.4 6726.0 .469 1990 86,122 10,254.8 20,338.6 4197.3 .409 1995 91,680.5 9432.1 19,520 3439.6 .364 2000 101,809.9 9147.7 19,167.3 2831.8 .309 2005 105,508.46 8225.0 15,518.4 2016.9 .245 2008 108,072.6 8265.2 15,131.4 1723.5 .208 2009 103,357.3 7430.8 13,454 1469.5 .19
Table 3. Overall Private Sector Union Membership Compared to Union Membership in Private Manufacturing, 19732009 (in thousands)
Table 4 offers a glimpse at the relevant importance of private and public sector membership to the overall trade union movement: from a ratio of one public sector member for every five private sector members in 1973 to near parity in 2008 and numerical predominance in 2009, despite the fact that public employment is only 20% of the overall labor market.
Unions have taken numerous steps to attempt to reverse their fortunes in the private sector, through coalitions with nonlabor groups as well as other unions. First, they have fashioned a strategy called the corporate campaign as an adjunct to traditional organizing. Unions here identify vulnerabilities in target corporationswhether a need for shareholder approval of executive compensation, antitakeover devices, or a going private decision; a need for government approval to build a new wing of a hospital or enter into a new line of service; the scrutiny of regulators over some product mishap; or concerns involving wages or hours worked, antitrust, or other difficulties warranting systemic litigation.21 Unions then organize a campaign of adverse publicity and religious and community boycotts directed at the target and its executives. The objective is to wrest from the target a neutrality and card-check agreement that facilitates union organization in some of the targets facilities. The unions leverage sometimes also comes from pension fund managers and other allies in the institutional shareholder community that organized labor has cultivated over the last two decades.22 Second, unions have made important strides in forging alliances with critical constituencies within the Democratic Party, both through their monetary and in-kind contributions to candidates23 and their support of key
21. For approving accounts, see James J. Brudney, Neutrality Agreements and Card Check Recognition: Prospects for Changing Paradigms, 90 IOWA L. REV. 819 (2005); Adrienne E. Eaton & Jill Kriesky, Union Organizing Under Neutrality Card Check Agreements , 55 Indus. & Lab. Rel. Rev. 42 (2001). For a critical view, see JAROL B. MANHEIM, THE DEATH OF A
THOUSAND CUTS: CORPORATE CAMPAIGNS AND THE ATTACK ON THE CORPORATION 39 (2000). 22. See Stewart J. Schwab & Randall S. Thomas, Realigning Corporate Governance: Shareholder Activism by Labor Unions, in EMPLOYEE REPRESENTATION IN THE EMERGING WORKPLACE: ALTERNATIVES/SUPPLEMENTS TO COLLECTIVE BARGAINING: PROCEEDINGS OF NEW YORK UNIVERSITY 50TH ANNUAL CONFERENCE ON LABOR 34147 (Samuel Estreicher ed., 1998). 23. Eight labor organizations figured among the top 20 political action committees (in terms of total expenditures in 200910 election cycle); the Service Employees International Union (SEIU) came in second at $18,335,969, and the American Federation of State, County & Municipal Employee (AFSCME) came in fifth at $9,514,653. See OpenSecrets.org, Political Action Committees, http://opensecrets.org/pacs/ (last visited April 6, 2010). Eleven labor organizations are listed among the top thirty All-Time Donors for 19892010; AFSCME came in second with a $40,965,173 total, 98% of which went to Democratic candidates; the National Education Association, not an affiliate of either labor federation, came in seventh at $29,908,625, 92% of which went to Democratic candidates. OpenSecrets.org, Center for Responsive Politics, Heavy Hitters: Top All-Time Donors 19892010 Summary, http://www.opensecrets.org/orgs/ list.php (last visited Feb. 15, 2010). Among top so-called 527 committees, SEIU came in first with $27,839,177 in expenditures. OpenSecrets.org, Center for Responsive Politics, 527S Committees: Top 50 Federally Focused Organizations: 2008, http://www.opensecrets.org/527s/ 527cmtes.php (last visited Feb. 15, 2010). The SEIU also engaged in an extensive microtargeting effort during the 2008 campaign. CATALIST, AGGREGATE ACTIVITIES OF
causes pressed by those constituencies, including universal healthcare and legalization of undocumented aliens. The objective is to promote a widespread understanding among Democratic politicians and activists that broad-gauged labor law reform to facilitate union organization is essential. We see this, of course, in the current campaign for the Employee Free Choice Act (EFCA) and the vocal support of most of the media and activist NGOs like Human Rights Watch and moveon.org. Third, unions have also forged ties with state and local legislators (some of whom may be especially indebted to public employee organizations) and community groups to promote enactment of living wage ordinances that, like prevailing wage laws in government-financed construction, arguably help mitigate some of the cost disadvantages of union representation.24 Similarly, with limited success, they have urged that relaxation of trade barriers be accompanied by enforceable labor standards, as exemplified by the recent decision of the Obama administration to impose sanctions on Chinese tire imports.25 This is a partial list but sufficient for present purposes to illustrate the kinds of efforts unions and their allies are engaged in to gain a stronger position in the U.S. private sector. III. Are these union efforts to retake the commanding heights of the private sector likely to succeed? It is too early, of course, to tell definitively. Conceivably, within a year or two, an Obama administration success on healthcare reform may engender sufficient public support for Democratic objectives to embolden U.S. Senators put in office with the help of labor dollars and sweat to vote for an unadulterated version of the EFCA, thus
PROGRESSIVE ORGANIZATIONS IN 2008: COMPILATION OF DATA FROM CATALIST SUBSCRIBERS 3637 (2009); Posting of Marc Ambinder to The Atlantic Politics Channel, http://politics.the atlantic.com/2009/10/seius_data_footprint_in_2008.php (Oct. 6, 2009, 08:54 EST). 24. See Zachary D. Fasman, Living Wage Ordinances and Traditional Labor Law: An Uneasy Conjunction, in COMPENSATION, WORK HOURS AND BENEFITS: PROCEEDING OF NEW YORK UNIVERSITY THE 57TH ANNUAL CONFERENCE ON LABOR 110 (Jeffrey Hirsch ed., 2009); see also Scott L. Cummings & Steven A. Boutcher, Mobilizing Local Government Law for LowWage Workers 1, 34 (The Univ. of Chicago Legal Forum Research Paper No. 09-23, 2009), available at http://ssrn.com/abstract=1472039. 25. See U.S. Office of the Trade Representative, Information Regarding Application of Transitional Product-Specific Safeguard Measure to Chinese Tires, Sept. 17, 2009, available at
http://www.ustr.gov/node/5068. For a discussion of buy American provisions in recent economic crisis recovery legislation, see Angelo A. Paparelli & Ted J. Chiappari, Employ America Workers Act: Protectionist Turducken, N.Y.L.J., Feb. 23, 2009, at 3; Laura M. Baughtman & Joseph F. Francois, Chamber of Comm., Trade Actionor Inaction: The Cost for American Workers and Companies, Sept. 15, 2009.
smoothing the path for union organizers. But there is reason to believe that even after passage of a law like EFCA labors problems in the private sector will essentially continue, and that labors turn to the political may produce less fruit than hoped. The experience of Canadian unions in their private sector suggests that even with enactment of EFCA and other laws on labors wish list, such as protections against strikebreakers, organizing rights for low-level supervisors, and mandatory bargaining over some permissive subjects, labors fortunes in private firms are not likely to be reversed any time soon. Strong pro-union laws can slow down deunionization, but the Canadian experience provides little basis for hope that it will lead to significant increased membership or labor contract coverage.26 This is because, if I may be allowed to lapse into old materialist ways of thinking, law can only do so much to curb material forces. A law like EFCA does not change the basic underlying economic dynamic. If unionization represents significant net labor costs (taking into account the quality and productivity of unionized labor) and unions cannot impose the same costs on the competition, legal employer opposition will continue unabated. Legal employer opposition may come earlier in the game under EFCA; employers of any significant size are likely to engage in a continuous anti-union educational campaign among their workforce. Many employees, once informed that unions cannot, in fact, deliver job security, will hesitate to sign union authorization cards, even under a card-check regime. Moreover, even if a unionization drive at a particular facility succeeds, this will be like being hit by lightning; because under EFCA, as proposed, an arbitrator will decide contract terms which, if the experience of the U.S. public sector is instructive, will have little relation to actual economic constraints on the organized firm. Companies are likely to do whatever they lawfully can to escape this fate. There is, moreover, no guarantee against capital flight, as well as no guarantee that the company will make needed capital investments in the unionized sector of its business rather than invest in other parts of the country or other countries where labor costs are considerably lower. Concern about such a dynamic change helps explain why labor has strongly supported passage of single-payer universal healthcare, and is a
The labour sector of the Indian economy consists of roughly 487 million workers, the second largest after China.[1] Of these over 94 percent work in unincorporated, unorganised enterprises ranging from pushcart vendors to home-based diamond and gem polishing operations.[2][3] The organised sector includes workers employed by the government, state-owned enterprises and private sector enterprises. In 2008, the organised sector employed 27.5 million workers, of which 17.3 million worked for government or government owned entities.[4]
Labour structure in India[edit]
A majority of labour in India is employed by unorganised sector (unincorporated). These include family owned shops and street vendors. Above is a self-employed child labourer in the unorganised retail sector of India.
Labour at an unorganised handicraft manufacturing enterprise. Over 94 percent of India's working population is part of the unorganised sector.[2] In local terms, organised sector or formal sector in India refers to licensed organisations, that is, those who are registered and pay sales tax, income tax, etc. These include the publicly traded companies, incorporated or formally registered entities, corporations, factories, shopping malls, hotels, and large businesses. Unorganised sector, also known as informal sector or own account enterprises, refers to all unlicensed, self-employed or unregistered economic activity such as owner manned general stores, handicrafts and handloom workers, rural traders, farmers, etc.[5][6] India's Ministry of Labour, in its 2008 report, classified the unorganised labour in India into four groups.[7] This classification categorized India's unorganised labour force by occupation, nature
of employment, specially distressed categories and service categories. The unorganised occupational groups include small and marginal farmers, landless agricultural labourers, share croppers, fishermen, those engaged in animal husbandry, beedi rolling, labeling and packing, building and construction workers, leather workers, weavers, artisans, salt workers, workers in brick kilns and stone quarries, workers in saw mills, and workers in oil mills. A separate category based on nature of employment includes attached agricultural labourers, bonded labourers, migrant workers, contract and casual labourers. Another separate category dedicated to distressed unorganised sector includes toddy tappers, scavengers, carriers of head loads, drivers of animal driven vehicles, loaders and unloaders. The last unorganised labour category includes service workers such as midwives, domestic workers, barbers, vegetable and fruit vendors, newspaper vendors, pavement vendors, hand cart operators, and the unorganised retail.[8][9] The unorganised sector has low productivity and offers lower wages. Even though it accounted for over 94 percent of workers, India's unorganised sector created just 57 percent of India's national domestic product in 2006, or about 9 fold less per worker than the organised sector.[10] According to Bhalla, the productivity gap sharply worsens when rural unorganised sector is compared to urban unorganised sector, with gross value added productivity gap spiking an additional 2 to 4 fold depending on occupation. Some of lowest income jobs are in the rural unorganised sectors. Poverty rates are reported to be significantly higher in families where all working age members have only worked the unorganised sector throughout their lives.[11][12] Agriculture, dairy, horticulture and related occupations alone employ 52 percent of labour in India. About 30 million workers are migrant workers, most in agriculture, and local stable employment is unavailable for them. India's National Sample Survey Office in its 67th report found that unorganised manufacturing, unorganised trading/retail and unorganised services employed about 10 percent each of all workers nationwide, as of 2010. It also reported that India had about 58 million unincorporated non-Agriculture enterprises in 2010. In the organised private sector with more than 10 employees per company, the biggest employers in 2008 were manufacturing at 5 million; social services at 2.2 million, which includes private schools and hospitals; finance at 1.1 million which includes bank, insurance and real estate; and agriculture at 1 million. India had more central and state government employees in 2008, than employees in all private sector companies combined. If state-owned companies and municipal government employees were included, India had a 1.8:1 ratio between public sector employees and private sector employees. In terms of gender equality in employment, male to female ratio was 5:1 in government and government owned enterprises; private sector fared better at 3:1 ratio. Combined, counting only companies with more than 10 employees per company, the organised public and private sector employed 5.5 million women and 22 million men.[4] Given its natural rate of population growth and aging characteristics, India is adding about 13 million new workers every year to its labour pool. India's economy has been adding about 8
million new jobs every year predominantly in low paying, unorganised sector.[13] The remaining 5 million youth joining the ranks of poorly paid partial employment, casual labour pool for temporary infrastructure and real estate construction jobs, or in many cases, being unemployed.
Labour relations[edit]
About 7 per cent of the 400 million-strong workforce were employed in the formal sector (comprising government and corporates) in 2000[14] contributing a whopping 60 per cent of the nominal GDP of the nation. The Trade Unions Act of 1926 provided recognition and protection for a nascent Indian labour union movement. The number of unions grew considerably after independence, but most unions are small and usually active in only one firm.[citation needed] In 1997, India had about 59,000 trade unions registered with the government of India.[15] Of these only 9,900 unions filed income and expenditure reports and claimed to represent 7.4 million workers. The state of Kerala at 9,800 trade unions had the highest number of registered unions, but only few filed income and expenditure reports with the government of India. The state of Karnataka had the fastest growth in number of unions between 1950s to 1990s. In 1995, India had 10 central federations of trade unions, namely (arranged by number of member unions in 1980): INTUC, CITU, BMS, AITUC, HMS, NLO, UTUC, AIUTUC, NFITU and TUCC. Each federation had numerous local trade union affiliates, with the smallest TUCC with 65 and INTUC with 1604 affiliated unions. By 1989, BMS had become India's largest federation of unions with 3,117 affiliated unions, while INTUC remained the largest federation by combined number of members at 2.2 million.[15] The largest federation of trade unions, INTUC, represents about 0.5% of India's labour force in organised sector and unorganised sector. In 2010, over 98% of Indian workers did not belong to any trade unions and were not covered by any collective bargaining agreements.
Labour relations during 1950-1990[edit]

A number of economists (e.g.: Fallon and Lucas, 1989; Besley and Burgess, 2004) have studied the industrial relations climate in India, with a large number of studies focusing on state-level differences in India's Industrial Disputes Act. Some studies (e.g.: Besley and Burges, 2004) purport to show that pro-worker amendments to the Industrial Disputes Act have had a negative impact on industrial output and employment - as well as on poverty. [16] However these studies have faced serious criticism on the grounds that the data used are misinterpreted, [17] and that the results are not robust with respect to standard econometric tests.[18] Between 1950 and 1970, labour disputes nearly tripled in India, from an average of 1000 labour disputes per year, to an average of 3000 labour disputes per year. The number of labour relations issues within a year peaked in 1973 at 3,370 labour disputes. The number of workers who joined labour disputes within the same year, and stopped work, peaked in 1979, at 2.9 million workers. The number of lost man-days from labour relation issues peaked in 1982 at 74.6 million lost man-days, or about 2.7% of total man-days in organised sector.[15] While the 1970s experienced a spike in labour unions and disputes, an sudden reduction in labour disputes was observed
during 1975-1977, when Indira Gandhi, then prime minister, declared an emergency and amongst other things suspended many civil rights including the worker's right to strike.[19]
Labour relations during 1990-2000[edit]

Union membership is concentrated in the organised sector, and in the early 1990s total membership was about 9 million. Many unions are affiliated with regional or national federations, the most important of which are the Indian National Trade Union Congress, the All India Trade Union Congress, the Centre of Indian Trade Unions, the Hind Mazdoor Sabha, and the Bharatiya Mazdoor Sangh. Politicians have often been union leaders, and some analysts believe that strikes and other labour protests are called primarily to further the interests of political parties rather than to promote the interests of the work force. The government recorded 1,825 strikes and lockouts in 1990. As a result, 24.1 million workdays were lost, 10.6 million to strikes and 13.5 million to lockouts. More than 1.3 million workers were involved in these labour disputes. The number and seriousness of strikes and lockouts have varied from year to year. However, the figures for 1990 and preliminary data from 1991 indicate declines from levels reached in the 1980s, when between 33 to 75 million workdays per year were lost because of labour disputes. In 1999, the government of India recorded about 927 strikes and lockouts, or about half of those for 1990. The number of lost man-days were about the same for 1999 and 1991, even though Indian economic output and number of workers had grown significantly over the 1990s.[20]
Unorganised labour issues[edit]

Many issues plague unorganised labour. India's Ministry of Labour has identified significant issues with migrant, home or bondage labourers and child labour.
Migrant workers[edit]
Migrant skilled and unskilled labourers of India constitute about 40 to 85 percent of low wage working population in many parts of the Middle East. They are credited to having built many of
the notable buildings in the Arab countries, including the Burj Khalifa in Dubai (above). Various claims of poor living conditions and labour abuse have been reported.[21] India has two broad groups of migrant labourers - one that migrates to temporarily work overseas, and another that migrates domestically on a seasonal and work available basis. About 4 million Indian-origin labourers are migrant workers in the middle east alone. They are credited to have been the majority of workers who built many of Dubai, Bahrain, Qatar and Persian Gulf modern architecture, including the Burj Khalifa, the tallest building in world's history which opened in January 2010. These migrant workers are attracted by better salaries (typically US$2 to 5 per hour), possibility of earning overtime pay, and opportunity to remit funds to support their families in India. The Middle East-based migrant workers from India remitted about US$20 billion in 2009. Once the projects are over, they are required to return at their own expenses, with no unemployment or social security benefits. In some cases, labour abuses such as unpaid salaries, unsafe work conditions and poor living conditions have been claimed.[21][22] Domestic migrant workers have been estimated to be about 4.2 million. These workers range from full-time to part-time workers, temporary or permanent workers. They are typically employed for remuneration in cash or kind, in any household through any agency or directly, to do the household work, but do not include any member of the family of an employer. Some of these work exclusively for a single employer, while others work for more than one employer. Some are live-in workers, while some are seasonal. The employment of these migrant workers is typically at the will of the employer and the worker, and compensation varies.[23][24]
Debt bondage[edit]
Further information: Debt bondage in India Bonded labour is a forced relationship between an employer and an employee, where the compulsion is derived from outstanding debt. Often the interest accrues at a rate that is so high that the bonded labour lasts a very long periods of time, or indefinitely. Sometimes, the employee has no options for employment in the organised or unorganised sectors of India, and prefers the security of any employment including one offered in bonded labour form. While illegal, bonded labour relationships may be reinforced by force, or they may continue from custom. Once an employee enters into a bonded relationships, they are characterised by asymmetry of information, opportunity, no time to search for alternative jobs and high exit costs.[25][26] Estimates of bonded labour in India vary widely, depending on survey methods, assumptions and sources. Official Indian government estimates claim a few hundred thousand labourers are bonded labourers; while estimates by activists and social organisations range between 2.6 to 5 million. The major employment sectors for debt bonded labour include: agriculture, stone quarries, brick kilns, religious and temple workmen, pottery, rural weaving, fishing, forestry, betel and bidi workers, carpet, illegal mining and fireworks. Child labour has been found in
family debt bonded situations. In each survey, debt bonded labourers have been found in unorganised, unincorporated sector.[25]
Child labour[edit]
Further information: Child labour in India According to 2001 Census, India had 12.6 million children, aged 514, who work either parttime or full-time. Of these over 60 percent work in unorganised agriculture sector, and the rest in other unorganised labour markets.[27] Poverty, lack of schools, poor education infrastructure and growth of unorganised economy are considered as the most important causes of child labour in India.[28][29][30][31] Article 24 of India's constitution prohibits child labour. Additionally, various laws and the Indian Penal Code, such as the Juvenile Justice (care and protection) of Children Act-2000, and the Child Labour (Prohibition and Abolition) Act-1986 provide a basis in law to identify, prosecute and stop child labour in India.[32] Nevertheless, child labour is observed in almost all unorganised, small scale, informal sectors of the Indian economy.[33][34][35] Scholars suggest inflexibility and structure of India's labour market, size of informal economy, legal hurdles preventing industries from scaling up and lack of modern manufacturing technologies are major macroeconomic factors encouraging demand for and acceptability of child labour.[31][36][37]
Labour laws in India[edit]

History[edit]
Main article: Indian labour law
Labour law notices in India. The labour laws of India originated and express the socio-political views of leaders such as Nehru from pre-1947 independence movement struggle. These laws were expanded in part after debates in Constituent Assemblies and in part from international conventions and recommendations such as of International Labour Organisation. The current mosaic of Indian
laws on employment are thus a combination of India's history during its colonial heritage, India's experiments with socialism, important human rights and the conventions and standards that have emerged from the United Nations. The laws cover the right to work of ones choice, right against discrimination, prohibition of child labour, fair and humane conditions of work, social security, protection of wages, redress of grievances, right to organise and form trade unions, collective bargaining and participation in management.[2] India has numerous labour laws such as those prohibiting discrimination and Child labour, those that aim to guarantee fair and humane conditions of work, those that provide social security, minimum wage, right to organise, form trade unions and enforce collective bargaining. India also has numerous rigid regulations such as maximum number of employees per company in certain sectors of economy, and limitations on employers on retrenchment and layoffs, requirement of paperwork, bureaucratic process and government approval for change in labour in companies even if these are because of economic conditions.[2][38][39] Indian labour laws are considered to be very highly regulated and rigid as compared to those of other countries in the world. The intensity of these laws have been criticised as the cause of low employment growth, large unorganised sectors, underground economy and low per capita income.[40][41][42] These have led many to demand reforms for Labour market flexibility in India.[43][44][45] India has over 50 major Acts and numerous laws that regulate employers in matters relating to industrial relations, employee unions as well as who, how and when enterprises can employ or terminate employment. Many of these laws survive from British colonial times, while some have been enacted after India's independence from Britain.[46][47] India is a federal form of government. Labour is a subject in the concurrent list of the Indian Constitution and therefore labour matters are in the jurisdiction of both central and state governments. Both central and state governments have enacted laws on labour relations and employment issues. Some of the major laws relevant to India are:[46] Workmens Compensation Act of 1923[48] The Workmens Compensation Act compensates a workman for any injury suffered during the course of his employment or to his dependents in the case of his death. The Act provides for the rate at which compensation shall be paid to an employee. This is one of many social security laws in India.[49] Trade Unions Act of 1926[50] This Act enacted the rules and protections granted to Trade Unions in India. This law was amended in 2001. Payment of Wages Act of 1936[51] The Payment of Wages Act regulates by when wages shall be distributed to employees by the employers. The law also provides the tax withholdings the employer must deduct and pay to the central or state government before distributing the wages.
Industrial Employment (Standing orders) Act of 1946[52] This Act requires employers in industrial establishments to define and post the conditions of employment by issuing so-called standing orders. These standing orders must be approved by the government and duly certified. These orders aim to remove flexibility from the employer in terms of job, hours, timing, leave grant, productivity measures and other matters. The standing orders mandate that the employer classify its employees, state the shifts, payment of wages, rules for vacation, rules for sick leave, holidays, rules for termination amongst others. Industrial Disputes Act of 1947[53] The Industrial Disputes act 1947 regulates how employers may address industrial disputes such as lockouts, layoffs, retrenchment etc. It controls the lawful processes for reconciliation, adjudication of labour disputes. The Act also regulates what rules and conditions employers must comply before the termination or layoff of a workman who has been in continuous service for more than one year with the employer. The employer is required to give notice of termination to the employee with a copy of the notice to appropriate government office seeking government's permission, explain valid reasons for termination, and wait for one month before the employment can be lawfully terminated. The employer may pay full compensation for one month in lieu of the notice. Furthermore, employer must pay an equivalent to 15 days average pay for each completed year of employees continuous service. Thus, an employee who has worked for 4 years in addition to various notices and due process, must be paid a minimum of the employee's wage equivalent to 60 days before retrenchment, if the government grants the employer a permission to layoff. Minimum Wages Act of 1948[54] The Minimum Wages Act prescribes minimum wages in all enterprises, and in some cases those working at home per the schedule of the Act. Central and State Governments can and do revise minimum wages at their discretion. The minimum wage is further classified by nature of work, location and numerous other factors at the discretion of the government. The minimum wage ranges between 143 to 1120 per day for work in the so-called central sphere. State governments have their own minimum wage schedules.[55] Industries (Regulation and Development) Act of 1951[56] This law declared numerous key manufacturing industries under its so-called[dubious discuss] First Schedule. It placed many industries under common central government regulations in addition to whatever laws state government enact. It also reserved over 600 products that can only be manufactured in small scale enterprises, thereby regulating who can enter in these businesses, and above all placing a limit on the number of employees per company for the listed products. The list included all key technology and industrial products in early 1950s, including products ranging from certain iron and steel products, fuel derivatives, motors, certain machinery, machine tools, to ceramics and scientific equipment.
Employees Provident Fund and Miscellaneous Provisions Act of 1952[57] This Act seeks to ensure the financial security of the employees in an establishment by providing for a system of compulsory savings. The Act provides for establishments of a contributory Provident Fund in which employees contribution shall be at least equal to the contribution payable by the employer. Minimum contribution by the employees shall be 10-12% of the wages. This amount is payable to the employee after retirement and could also be withdrawn partly for certain specified purposes. Maternity Benefit Act of 1961[58] The Maternity Benefit Act regulates the employment of the women and maternity benefits mandated by law. Any woman employee who worked in any establishment for a period of at least 80 days during the 12 months immediately preceding the date of her expected delivery, is entitled to receive maternity benefits under the Act. The employer is required to pay maternity benefits, medical allowance, maternity leave and nursing breaks. Payment of Bonus Act of 1965[59] This Act, applies to an enterprise employing 20 or more persons. The Act requires employer to pay a bonus to persons on the basis of profits or on the basis of production or productivity. The Act was modified to require companies to pay a minimum bonus, even if the employer suffers losses during the accounting year. This minimum is currently 8.33 percent of the salary. Payment of Gratuity Act of 1972[60] This law applies to all establishments employing 10 or more workers. Gratuity is payable to the employee if he or she resigns or retires. The Indian government mandates that this payment be at the rate of 15 days salary of the employee for each completed year of service subject to a maximum of 1000000.
Criticisms[edit]
Scholars suggest India's rigid labour laws and excessive regulations assumed to protect the labour are the cause of slow employment growth in high paying, organised sector.[61][62][63] India's labour-related acts and regulations have led to labour-market rigidity. This encourages shadow economy for entrepreneurs, an economy that prefers to employ informal labour to avoid the complicated and opaque laws. In particular, Indian labour legislation such as the Industrial Disputes Act of 1947 added rigid labour laws and one sided trade union laws. Although the Act does not prohibit layoffs and retrenchments, it does require[64] entrepreneurs and companies to get the permission from government officials to fire an employee for absenteeism, retrench employees for economic reasons, or to close an economically nonviable company. This bureaucratic process can stretch into years, and the government officials have consistently and almost always denied such permission.[65][66][67] As a result, the scholars argue that India's inflexible labour laws have created a strong disincentive to formally register new companies and hire additional workers in existing organised sector companies.[68] Unlike China, Indian
businesses have avoided substituting India's abundant labour for export or domestic opportunities, or use labour instead of expensive equipment for quality control or other operations. These are reasons for India's weak employment growth.[61][62][69][70][71] More recently, a few scholars have completed a comparative study between states of India with different labour regulations.[72][73] They compared states of India who have amended labour legislations to grant more flexibility to employers, to those states in India that have made their labour laws even more rigid and complicated to comply with. These studies find that states with flexible labour laws have grown significantly faster. Flexible labour states have been able to take advantage of the export opportunities, and the per capita household income has risen much faster in states with flexible labour laws. States with rigid labour laws have led local entrepreneurs to prefer casual workers or contract workers with finite employment time period; in essence, more rigid and inflexible labour law states see increased informal employment.[74][75] A 2007 article in The Economist finds India to have the most restrictive labour laws in any major economy of the world.[44] India's private sector, including its organised manufacturing sector, employs about 10 million Indians. Manufacturing firms need to obtain government permission to lay off workers from factories, and this permission is usually denied if they have more than 100 staff. This partly explains why most Indian firms are small: 87 percent of employment in India's organised manufacturing sector is in firms with fewer than ten employees, compared with only 5 percent in China. Small Indian firms cannot reap economies of scale or exploit the latest technology, and so suffer from lower productivity than if they scaled up, employed more people and were much bigger companies. This cripples Indian firms ability to rapidly expand or adjust with changes in global economy, both during early opportunity phase and during economic change. One exception is white collar jobs, where companies have stronger lobbies and employees are not unionised, so they have managed to operate freely with a much larger workforce and have been able to lay off a significant portion of their workforce without contravening labour laws.[76] In almost all cases white collar employees are forced to resign under threat of negative recommendations and black-listing with industry associations.[77] Djankov and Ramalho have reviewed a number of labour studies on developing countries including India. They find, consistent with above criticisms, that countries with rigid employment laws have larger unorganised sectors and higher unemployment, especially among young workers. They also report the rigid, inflexible labour laws are strongly related to low per capita income.[40][78] International comparison of Indian labour laws The table below contrasts the labour laws of India to those of China and United States, as of 2011.

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TRADE UNIONISM UNDER GLOBALIZATION: THE DEMISE OF VOLUNTARISM?

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Table 4 offers a glimpse at the relevant importance of private and

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Labour structure in India[edit]

Labour relations during 1950-1990[edit]

Labour relations during 1990-2000[edit]

Unorganised labour issues[edit]

Labour laws in India[edit]

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