Employers Stand their Ground

April 19th, 2012 by Phil Mattera

These are heady days for the corporate accountability movement. Threats of consumer boycotts prompted half a dozen major companies to drop out of the American Legislative Exchange Council, which in turn forced ALEC to cease its efforts to get states to enact “stand your ground” laws like the one in Florida at the center of an uproar over the shooting of an unarmed teenager.

At the same time, institutional investors humiliated Citigroup by rejecting a board-approved compensation package for its senior executives. Although the “say on pay” resolution is non-binding, it will in all likelihood result in smaller paydays for top officers of an institution that epitomizes financial sector misconduct. This comes on the heels of an announcement by Goldman Sachs that it would change its board structure in response to pressure from the capital strategies arm of the public employee union AFSCME.

Environmentalists have succeeded in stalling and perhaps killing the disastrous Keystone XL pipeline . The past few months have also seen a surge in protest over working conditions at the Chinese plants that produce the wildly popular Apple iPad tablets. Apple’s manufacturing contractor Foxconn was forced to boost pay for factory workers, while Apple itself faced demonstrations at many of its normally idolized retail stores. The Apple campaign and others are being propelled by new online services such as Sum of Us and Change.org that mobilize online pressure for a variety of anti-corporate initiatives.

Missing from all this positive momentum is a significant victory for the U.S. labor movement. While major corporations have bowed to pressure from consumers and shareholders, they are standing their ground against unions.

Rather than making concessions, large private-sector employers are looking to further roll back labor’s power. Companies such as American Airlines and Hostess Brands (maker of Twinkies and Wonder Bread) have filed for Chapter 11 and are using the bankruptcy courts to decimate their collective bargaining agreements and gut pension plans.

Verizon continues to stonewall in negotiations with members of the Communications Workers of America, who struck the company for two weeks last summer in the face of unprecedented concessionary demands from management but then went back to work without a new contract. CWA is also facing difficult negotiations with AT&T, even though the union went out on a limb to support the company’s ultimately unsuccessful bid to take over T-Mobile.

There have been a few relatively bright spots for labor. For example, after being locked out for three months, Steelworkers union members at Cooper Tire and Rubber managed to negotiate a new contract that excluded the company’s demand for a five-tier wage structure with no guaranteed pay increases.

Yet organized labor has not been able to take the offensive in a significant way, and employers continue to feel emboldened. This comes through loud and clear in the results of the latest Employers Bargaining Objectives survey conducted by Bloomberg BNA (summarized in the April 11 edition of Labor Relations Week).

“Employers are fairly brimming with confidence as they head into 2012 talks,” Bloomberg BNA writes. “Nine out of 10 of the employers surveyed are either fairly confident or highly confident of obtaining the goals they have set for their labor agreements.”

Those goals, of course, do not include hikes in pay and improvements in working conditions. In fact, only 11 percent of respondents said they expected to have to negotiate significant wage increases, while 27 percent said they planned to bargain for no improvements at all in wage rates. Many employers expect to shift more health care costs to workers, and few expect to agree to stronger job security provisions.

Employers are prepared to play hardball in seeking their objectives. For example, one-quarter of manufacturing-sector respondents told Bloomberg BNA they would be likely to resort to a lockout of workers if they did not get their way in negotiations. Corporations have little fear of strikes, which are all but extinct, and if workers do dare to walk out, employers are confident of prevailing—or at least maintaining the kind of impasse that exists at Verizon.

Such arrogance is not surprising at a time when unemployment levels remain high and private-sector unionization rates are abysmally low. The question is what it will take to shatter employer intransigence.

One piece of the solution is greater cooperation between unions and the rest of the broader corporate accountability movement, and that’s exactly what seems to be emerging from the 99% Spring offensive.

Strong private sector unions in the United States are an essential check on the power of large corporations and one of the most effective vehicles for raising living standards. Corporate accountability will mean much more when big business is running away not only from ALEC but also from union-busting.

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