Union Organization

1. Union Organization Picking a target Union return on investment depends on cost of organizing Expected cost of servicing workers Expected probability of win Expected bargaining strength in the sector

2. Union Organization Picking a target Union return on investment depends on cost of organizing Expected cost of servicing workers Heterogeneity of workers, interests Worker turnover Part-time vs. full-time vs. transitory workers Worker ability to pay dues Size of unit (returns to scale) Monopoly or oligopoly

3. Union Organization Picking a target 3. Expected probability of win Wages and benefits in the firm relative to local reference, industry norms Worker sense of inequity or injustice Campaigns based on workplace dignity: 56% win Traditional wages, hours, job security: 27% win Probability of firm resistance Phone sampling, research

4. Union Organization Picking a target 4. Expected bargaining strength in the sector Depends on the elasticity of labor demand Laws of derived demand Depends on the growth of labor demand Growing firm profits Growing firm revenues Growing employment Growing labor productivity Can also help with sense of fairness

5. Union Organization W W1 W0 Labor demand: N: number of workers; W: Wage Demand N N1 N0 Wage Bill = W*N; Change in wage bill = W1N1 – W0N0

6. Union Organization W Relatively Inelastic Demand W1 W0 Labor demand: N: number of workers; W: Wage Relatively Elastic Demand N N1 N2 N0 Change in wage bill = W1N2 – W0N0 is smaller than with elastic demand

7. Union Organization ED = Elasticity of demand = % change in employment % change in wage 0 < ED < 1: inelastic demand ED = 1: unitary elastic demand ED > 1: elastic demand Wage increase with inelastic demand will raise the wage bill Wage increase with elastic demand will lower the wage bill

8. Union Organization ED = Elasticity of demand = 0.3 < 1, inelastic % change in employment = 3% % change in wage = 10% W1 = W0 (1.10) N1 = N0 (0.97) Change in wage bill = W1N1 – W0N0 = W0 (1.10)* N0 (0.97) - W0N0 = 0.067*W0N0 So wage bill rises when wage rises when the elasticity of demand is below 1.

9. Union Organization Laws of derived demand Union labor demand is less elastic when … Product demand is less elastic Few substitutes for the product Monopoly/oligopoly Weak import penetration Examples? There are few substitutes for union labor No ready supply of replacement workers High union density in the industry Nonunion options paid comparable wages (Davis-Bacon)

10. Union Organization Laws of derived demand Union labor demand is less elastic when … “Importance of being unimportant”—labor costs are a small fraction of total costs Heavily capitalized sectors Crafts vs. industrial unions Only holds when elasticity of demand for product is bigger than the elasticity of substitution (holds most of the time)

11. Steps for union recognition by NLRB election • Initial contact • Workers contact union • Union targets workers • Union typically assigns an organizer • Determines campaign focus • Solicits assistance and trains employees sympathetic to the union • Nonemployees do not have access to the premises as long as there is an alternative way to contact workers • Employees are known by fellow workers • If the union is successful, it will need an infrastructure of employees to serve as stewards, local leaders

12. Steps for union recognition by NLRB election • Solicitation • Work time vs personal time at work vs nonwork time • NLRB reserves work time for work—limits interference in firm business practice • Personal time at work (lunch, breaks) are open for oral solicitation by employees • Pro union posters, bulletins, clothing, buttons ok if they do not disrupt business • Off-premises solicitation is ok

13. Steps for union recognition by NLRB election • Authorization cards Minimum of 30% needed to authorize election (unions will not press for election unless they have majority. AFL-CIO recommends 75%) 5. Representation Petition Union submits RC petition. NLRB verifies minimum 30% interest. • Cross-petition from other unions requires additional 10% interest

14. Steps for union recognition by NLRB election Strict Rules Governing Firm Behavior During Union Campaign

15. Steps for union recognition by NLRB election • Secret Ballot election Within 30 days of verification of need for election 50% required to win Run-off among top two options if no majority Voters include everyone in bargaining unit Employed at least 30 days in the year prior Avoidance of fraudulent employees Economic strikers within 12 months of strike Replacement workers Part-time workers with continuing interest SAG: anyone who worked at least two days in last 12 months

16. Steps for union recognition by NLRB election • Rules on election day • No mass meetings 24 hours before election • Firm cannot offer benefits or reprisals No special pay from firm to compensate for voting expenses Special pay from union for voting expenses is ok, other compensation is illegal

17. Steps for union recognition by NLRB election • Certification of Election If NLRB certifies union win, union is immediately certified. Has one year to get a contract Contract bar—no other elections allowed for one year, regardless of who wins If firm is guilty of ULP, NLRB may call for another vote; or Gissel doctrine NLRB may certify union if firm behavior is considered so bad as to make a fair election impossible and there is evidence that union has a majority; or J.P. Stevens ordered to bargain, even though union did not demonstrate majority through authorization cards

18. Voluntary Recognition • If firm volunteers to recognize union, NLRB will certify union. • Recognition picketing (limit of 30 days, after which firm can ask for expedited election) • Economic pressure (boycotts, political pressure) • Prior agreements between firm and worker to accept recognition cards in lieu of NLRB election • Absent election, union at risk of decertification election,

19. Eaton and Kriesky on Neutrality and Card Check Agreements ILRR (October 2001) • Unions may wish to forge agreements that lower the cost of organizing or the standard for success • Agreements with firms that have multiple sites • Centralized agreements • Generalized agreement based on a few local relationships • Agreement with entirely new firms • Agreements with Associations of Employers • Most common: Steel, autos, communications, hospitality, gaming • (66%) restrict agreement to specific occupations, job classifications, or facilities

20. Types of agreements Neutrality Agreements: “Neither helping nor hindering” union organization efforts, facts allowed (UAW, CWA) “Employer will not communicate opposition; employer will not attack or demean the union or its representatives (HERE) Firm will not provide support to anti-union groups (USWA) Weaker statements: strive for climate free of hostility; only positive, pro-company statements will be issued

21. Types of agreements Card Check Agreements: (73%) Third party neutral will validate membership cards signed by union members. Firm will recognize union if a minimum level is reached (say 65%) Similar to above, but if percentage of cards is above 50% but below threshold, a nonNLRB election is held. If percentage is between 30% and 50%, NLRB election held.

22. Types of agreements Access: (66%) Union will be allowed on the firm premises. (36%) Union given lists of employees in the bargaining unit First contract Accretion of new sites into existing bargaining units (50% of multi-site agreements) Arbitration if first contract not reached (USWA) Negotiations begin immediately upon recognition

23. Data • 57 International unions with 10,000+ members • 36 respond • 23 had at least one agreement • 132 agreements total (113 at least partially useable) • Data analyzed only relate to these 113 contracts

24. Union Success • Recognition • NLRB elections: 46% 1983-1998 • Neutrality only: 46% • Card Check: 74% (understated viz. NLRB) • Card check, U.S. public sector: 85% • Card check, Quebec: 83% • Card check, Ontario: 78% • First contract • NLRB elections: 66-80% • Neutrality only: 100% • Card check: 96% • Does this mean that universal mandatory application of card check or neutrality will raise union density?

25. Thieblot. “The Fall and Future of Unionism in Construction.” Journal of Labor Research Spring 2001. • 1959 Landrum Griffin Act allows closed shops in building trades (pre-hire agreements) • Davis Bacon Act (1931); Little Davis Bacon Acts 2/3 of states); Project Labor Agreements (eg Des Moines Iowa Events Center) • Construction has lost density more than most industries

26. Why has Union Density fallen in Construction? • Demographics: women, educated? • Insignificant in construction trades • 10 states repealed little Davis Bacon Acts since 1979 • Most of the decline predates this • Decline occurs does not slow after Landrum Griffin • Union/Nonunion Cost Structure

27. Union / Nonunion Cost Differential • Pay differential 50% plus • Pay differential largest for the least skilled • How can unionized firm compete?

28. Union / Nonunion Cost Differential • Unit Labor Cost = W*N = W = W Q (Q/N) (APN) W = wage N = number of workers Q = output or revenue If W is 50% higher in union sector, APN must be at least 50% higher for union firm to be competitive

29. Union / Nonunion Cost Differential Evidence on relative productivity Cost per Sq foot = a0 + a1*INPUTS + a2*(UNION) a2 > 0 implies union effect on wages dominates union effect on productivity a2 < 0 implies union effect on productivity dominates union effect on wage Evidence suggests a2 > 0; responsible for at least part of the decline

30. Union / Nonunion Cost Differential Other sources of higher union cost Work rules Price of helpers Staffing: journeymen vs less skilled Trade staffing restrictions Slow adjustment to new technologies, trades Consequence: union market share has fallen from 75% in 1950 to 25% today

31. Union / Nonunion Cost Differential • Competitive option when unit costs are higher in union sector • Raise costs in nonunion sector • Role of prevailing wage laws • Government projects are 20% of the market, largely union • Private sector projects are about 80% of the market, largely nonunion

32. Other Strategies for unionized firms, unions • Unions • Job targeting: Try to lower W in union sector • “list price vs street price” • Union pools money on high priced, prevailing wage jobs to subsidize wages on competitive bids • Salting: try to lower APN or raise W in nonunion sector • More later • Unionized firms • Double breasting: union and nonunion crews

33. Fine. “Union Salting: Reactions and Rulings since Town and CountryJournal of Labor Research Summer 2002. • Salting: union members or organizers accept employment at a nonunion firm with the intent of filing unfair labor practice charges and organizing the work place • Aim is to pressure firm to recognize the union without a certification election; or • To disrupt nonunion firm production activities and lower its cost advantage over union firms

34. Fine. “Union Salting: Reactions and Rulings since Town and CountryJournal of Labor Research Summer 2002. • NLRB v. Town and Country Electric (1995) • IBEW locals 292 and 343 asked their unemployed members to apply for jobs at Town and Country Electric • Those employed trained on how to organize the site • How to monitor employer actions for possible ULP charges • IBEW paid the salts the difference between nonunion and union scale. • IBEW alleged one salt wrongfully discharged; 10 others wrongfully refused employment • NLRB upholds charge; consistently has held that salts are entitled to the same rights as other employees

35. Fine. “Union Salting: Reactions and Rulings since Town and CountryJournal of Labor Research Summer 2002. • ULP charges rise 36% in nonunion firms after salting • NLRB Cases involving salts • 1995: 4 • 1996: 9 (of 262 salt cases filed in 1996) • 1997: 10 • 1998: 8 • 1999: 8 • 2000: 16

36. Fine. “Union Salting: Reactions and Rulings since Town and CountryJournal of Labor Research Summer 2002. • Salt “charges” upheld by NLRB • 18 “refusal to consider” • 22 “refusal to hire” • 19 “unlawful interrogation” • 19 “unlawful discharge” • Penalties include back pay, reinstatements

37. Fine. “Union Salting: Reactions and Rulings since Town and CountryJournal of Labor Research Summer 2002. • Employer responses • Salting insurance paid by the Associated Builders and Contractors • Architectural Glass and Metal Co. Inc. (1997) can dismiss salts if there is an anti-moonlighting clause in contract • Industrial Company Southeast, Inc. (1997) Can require applications on original forms (union had submitted applications on xeroxed application forms.

38. Decertification • RD petition must be filed by employees • At least 30% of employees must sign a decertification petition • Employer cannot encourage this process, must remain neutral • Filed within 60-90 days of expiration of a contract; or • if there has been no contract filed within 1 year of certification; or • After a contract has expired

39. Decertification • RM petition can be filed by the employer • Timing similar to RD • Evidence supporting RM petition can include: • Unsolicited communications from employees requesting decertification; • Failure of union to represent workers, fulfill responsibilities; • Changes in the size of the workforce

40. Decertification • Unions lose 75% of decertification elections • Unions win 45-50% of certification elections • RD petitions are gaining over time, RC and RM petitions have decreased in relative importance. • Combined RD + RM mean that decertification elections are rising in importance Scott, Hester and Arnold. “Employer-Initiated Elections, 1968-1992.” Journal of Labor Research Spring 1997.