Will Obama Help Contractor Employees Join a Union?

June 19th, 2014 by Phil Mattera

vail-good-jobs-nationAfter the passage of the Wagner Act in 1935, labor activists organized workers with the slogan: “The President wants you to join a union.” We haven’t seen much encouragement of collective bargaining from the White House during the past 75 years, but there is a move afoot to change that, at least with respect to employees of companies working for the federal government.

The Good Jobs Nation campaign, which has been highlighting the plight of low-paid employees of federal contractors and helped prod President Obama to issue an executive order that will boost the pay of those workers to $10.10, is raising the ante. It is now calling for another executive order that would pressure contractors to bargain with workers in exchange for a commitment not to strike.

While there would certainly be legal challenges to such an order, it is the logical next step in the effort to address poor working conditions among portions of the federal contractor workforce and to use those standards to promote better standards for the entire U.S. working population.

It’s already well documented that many contractors flout federal workplace regulations. A report issued last year by the majority staff of the Senate Health, Education, Labor and Pensions Committee showed that contractors were among the worst violators in areas such as wage and hour standards and occupational safety and health. A federally mandated wage increase will certainly help, but it is only through collective bargaining that contractor employees will get all the protections they need.

Good Jobs Nation is focusing on workers in fields such as foodservice and security, but how much unionization is missing from the overall contractor workforce? To begin to answer this question, I looked at what the largest contractors are saying (or not saying) about unions in their filings with the Securities and Exchange Commission.

I started with the list of 50 largest contractors in FY2014 shown on the USA Spending website. Excluding those that are privately held, foreign-owned or non-profit, I looked at each firm’s 10-K annual report, which is required to report the total number of employees and has traditionally been the place where companies indicate the extent to which those workers are covered by collective bargaining agreements. Since the main goal of the 10-K is to inform investors of potential risks that could affect the value of their holdings, the company is supposed to indicate whether a work stoppage is possible.

Back in the day when unions were stronger, most large companies had something to report on labor relations. These days many companies indicate that they are not a party to any collective bargaining agreements or don’t bother to say anything on the subject.

Numerous 10-Ks of the top contractors fall into this category. Healthcare companies such as McKesson (the 5th largest contractor), Humana (8th) and UnitedHealth (20st) say nothing about unions. Other firms such as Health Net (11th), telecom equipment maker Harris Corp. (33rd) and Orbital Sciences Corporation (43rd) proudly announced that their U.S. workforce is union-free.

The companies with the biggest union presence are leading Pentagon contractors. Shipbuilder Huntington Ingalls (9th) reports the highest figure I found: 50 percent. Boeing (2nd) reports 37 percent while General Dynamics (4th) and L-3 Communications (10th) each give a figure of 20 percent. The largest contractor of them all, Lockheed Martin, says its unionization level is 15 percent.

On the other hand, some of the aerospace contractors are only lightly unionized: the figure for Raytheon (3rd) is 8 percent and for Northrop Grumman (19th) only 5 percent. Once a heavily unionized firm, General Electric (22nd) says only 7 percent of its total workforce has collective bargaining, even though it has shifted more than half of that workforce overseas, where unions remain stronger.

In other words, not a single one of the companies profiting most from the bloated military budget has a workforce that is majority union, and some have kept the union presence to a bare minimum.

Unions are even more scarce among the large information technology firms that account for another substantial portion of federal contractor spending. Among the firms that don’t mention any union presence are: SAIC, Computer Sciences Corporation, Hewlett Packard, CACI International and IBM.

Employees at these firms are certainly better paid than those employed by contractors performing functions such as building maintenance, but the absence of unions among better treated workers makes it harder for everyone to organize.

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