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August 15, 2006
Labor Pains, Union Dues
While July saw U.S. employers announce the fewest number of job cuts in six years, declining manufacturing employment has been a cause for concern. Learn not only what the next few years hold and how industry labor compares with the rest of the country's workforce, but also the current state of U.S. labor unions.
First, some good news for United States business and industry: U.S. employers announced the fewest number of job cuts in six years in July. So far this year, companies have announced 473,636 job cuts, down 26 percent from the first seven months of 2005.
According to a monthly tally compiled by outplacement firm Challenger Gray & Christmas (via MarketWatch), announcements of total job reductions fell by 45 percent to 37,178 for July from 67,176 in June. The latest month's total is down 64 percent from the 102,971 job cuts announced in July 2005. It is the lowest since 17,241 in June 2000. Job cuts in the auto industry fell in July to just 924 — after nearly 70,000 in the first half of the year.
Challenger also reported that employers disclosed plans to hire 34,537 workers last month, 27 percent more than the same time last year.
For instance, "these are extremely busy days for aerospace, aviation, and defense recruiters," due in part to "the promise of working with state-of-the-art technology to innovate in areas ranging from commercial aviation, defense missile systems, space exploration, and satellite communications" at such places as Boeing, Lockheed Martin, Raytheon and smaller such employers, according to the Electronic Recruiting Exchange (ERE)'s Inside Recruiting. "And if the pace of hiring for those closely tied industries is any indication, they may rank among the best employment markets for engineers and recruiters alike for years to come."
Also on the hiring front, PricewaterhouseCoopers' most recent Manufacturing Barometer found that 58 percent plan to expand their workforce over the next 12 months, an increase over the 43 percent who expected to hire more employees a year ago. However, overall composite hiring for the industry remains flat at -0.1 percent, likely due to cutbacks at large firms.
The not-so-good news: An economic slowdown is being aggravated by inflation and stagnation, described by some Wall Street pundits as stagflation. Fueling the stagnation of the economy is the slowdown in the automobile industry. General Motors, Ford and Daimler Chrysler — The Big Three — are ruthlessly restructuring: trimming payrolls, laying off thousands of workers and closing down or selling off plants — which in turn has "multiplier effects" on industries such as steel, glass, plastics and rubber. Look at the largest auto supplier in the country, Delphi, which is in bankruptcy.
A recent Philadelphia Daily News article headlined "Workers on the Slag Heap of History" describes the devastation enveloping U.S. cities and towns:
The gates of many towns welcome visitors with abandoned factories. And the communities these factories flank tell you more about what is really destroying America than any Wall Street analyst or Washington policy wonk ever could. (The article is no longer available on the newspaper's Web site, but it is posted on the author's blog.)
The manufacturing sector lost 15,000 jobs in July, reversing a gain of 22,000 in the previous month, according to the Labor Department's report this month. Among 84 manufacturing industries, however, a little more than 45 percent were adding jobs.
The following are some revealing facts about the state of industry labor from the Bureau of Labor Statistics:
• Prior to 2000, annual average employment in manufacturing was estimated as more than 17 million. Manufacturing employment last year averaged 14,232,000.
• There were about 1,292 extended mass layoff events in manufacturing last year, resulting in 223,058 separations of workers from their jobs and 242,113 initial claimants for unemployment insurance. These 2005 numbers are the lowest in the 1996-2005 period.
• Last year the unemployment rate of persons most recently employed in manufacturing industries was 4.9 percent. The overall unemployment rate was 5.1 percent.
• Yet while total employment for all industry sectors is projected to increase 14.8 percent over the 2004-2014 period, manufacturing employment is expected to decrease 5.4 percent during the same timeframe.
• From 2004 to 2005, labor productivity — defined as output per hour — grew by 5 percent in manufacturing.
• In 2005, the annual average of weekly hours of production workers in manufacturing was 40.7. In comparison, the private industry average was 33.8 for production and nonsupervisory workers.
• Average hourly earnings of production workers in manufacturing were $16.56 last year, somewhat higher than the average of $16.11 for production and nonsupervisory workers in all private industry.
• In the economy as a whole, manufacturing represents about 11.0 percent of all employment.
Labor Unions
Around mid-century, labor unions represented about a third of all U.S. workers. However, the U.S. labor movement has gone through major changes in recent years, not the least of which was last year's departure from the AFL-CIO of a handful of major unions, a "schism" that marked "the biggest rift in organized labor in 70 years," IMT reported around that time.
Membership has been falling for years.
To wit: the union membership rate in the U.S. has declined from a high of 20.1 percent in 1983 to 2004's 12.5 percent. Last year's percentage of wage and salary workers being union members remained unchanged from 2004's, the U.S. Department of Labor's Bureau of Labor Statistics reported earlier this year.
In fact, according to the latest annual BLS-released "Union Members" report, union membership last year grew at roughly the same pace as overall job growth, leaving the share of U.S. workers in unions in 2005 unchanged at 12.5 percent. This latest report marked a milestone in U.S. union history: for the first time ever, the share of manufacturing workers who are covered by a union is no higher than the share of covered workers in the rest of economy (both 13.7 percent). Manufacturing workers are now no more likely to be represented by a union than the average U.S. worker. Union membership rates are still slightly higher in manufacturing (13.0 percent) than in the economy as a whole (12.5 percent), but if recent trends hold, union membership in manufacturing will also soon fall behind the rest of the economy.
Some highlights from last year's data are as follows:
• Nearly 15.7 million wage and salary workers were union members in 2005;
• Black workers were more likely to be union members than were white, Asian or Hispanic workers;
• Men were more likely than women to be union members; and
• Workers in the public sector had a union membership rate more than four times that of private-sector employees.
Is unionized labor nearing the end of its course? If it needs an overhaul, how would you suggest U.S. labor unions go about it?
Sources
Job cuts plunge to six-year low
by Rex Nutting
MarketWatch, Aug. 1, 2006
Who's Hiring, Who's Firing: Aerospace, Aviation, And Defense Recruiting Takes Off
Electronic Recruiting Exchange (ERE)'s Inside Recruiting, June 13, 2006
Growth is on the Horizon for Industrial Manufacturers, PricewaterhouseCoopers Survey Finds
PricewaterhouseCoopers (via PRIMEZONE), July 27, 2006
Workers on the Slag Heap of History
by David Sirota
The Philadelphia Daily News (via Sirota Blog), March 24, 2006
Labor Department's Employment Situation Report
U.S. Department of Labor Bureau of Labor Statistics, Last Modified: Aug. 04, 2006
U.S. Department of Labor Bureau of Labor Statistics, Industry At a Glance: Manufacturing
Union Members In 2005
U.S. Department of Labor Bureau of Labor Statistics, Jan. 20, 2006
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26 CommentsFor 25 years I have tried to "unify" self-employed workers in the fashion apparel industry. 99% of them fail because today they cannot survive all alone, and too many are not leaders to build a business with employees. Also there aren't many jobs left in this industry, at least here in America, but there are a huge amount of opportunities. I'd like to write up a proposal to "Unite" the union that still has a little bit of apparel industry, and suggest that they "unify" these self-employed in "collaboratories" (a word from the software industry).
What do you people think? The Unions sure need some new ideas and directions. Do you think that this may be a way to go in the 21st century?
Thanks
Shirley Willett
August 15, 2006 2:19 PMShirley, it seems to me that you are not getting it. Part of the reason why apparel industry moved out of the US... IS the UNIONS. The article almost hits you in the head telling you this. Both Corporate greed and Union greed are the main causes of our manufacturing decline and you advocate to unionize the self-employed?!?!?! This is the best one yet.
The little guy, the self-employed, has been probably already restructured, maybe let go from a union job, maybe he is too tired to face the hostility of corporate America and he got this little self-employed business together to get away of all this .... and you want to suffocate him with union dues and scare his customers with union demands?
And if you would find the idiot to sign up to this, what is the union going to do for him: fight against his employer (himself) for better pay, better working conditions and medical coverage? Is he going to have to go on strike against himself? With ideas like this one, few wonder why union membership is in decline. It seems to me that whenever one thinks that the bottom has been reached, that there is no way that you can get a [stupider] concept out there, there is always someone that makes it all possible, showing Murphy's principle as it relates to intelligence is still valid. (You know that the quantity of intelligence in the world is a constant and the population is continually increasing??)
I was thinking that management in corporate America is out of touch, but you beat all the expectations.
If unions try to play King Knute and stop the tide from coming in, they'll get just what he got, wet feet. So placating the status-quo is the order of the day in order to survive till tomorrow. Hopefully, for which King Knute will have his deputies working on behind the scene where all real politics are accomplished...
August 15, 2006 4:44 PMAfter being a manufacturing trained self-employed product designer for 20 years, I am now nearing retirement and have become utterly contemptious of American and international business, both union and non-union. The short-term greed is nearly unbelieveable out there.
Let's face it, people, "business" is simply solving a problem for people, who pay you for your efforts. Chasing a quick quarterly profit, with shoddy products, buy-outs and mergers, and screwing your customers and employees to make a dollar you really haven't earned is the "order of the day". No management should make more than 10 times the pay of the lowest fulltime employee, no one should be immune from talking to a dissatisfied customer, and no "union business agent or organizer" should get paid to sit on their ass and argue with an employer. If you aren't working to satisfy a customer, remove an obstacle from production or sales, or keep the doors open, you are expendable and should be removed. "Organizing" won't remove brainless management or malingering workers.
That's why "unions" are failing. They serve no purpose that finding another job doesn't correct better.
Vote with your feet and close our borders to slave labor and you'll see American business start recovering. And, for God's sake, teach new employees to value the customer and quit insulting them... and fire the ones who can't learn that.
August 15, 2006 5:11 PMDecline of US Businesses in manufacturing etc.
1. Unions: They give nothing in return for what they get for the employee. They don't train the workers, give the employer an advantage by hiring union workers, nor support them.
2. Government: They, mainly due to government red tape, environmental regualations and need to control, are as much to blame for business losses to other countries as the unions.
3. Think about it. Why is it all right to allow imports from countries who do not adhere to our stringent environmental, employee safety, ecology requirements and not reduce our own standareds for production here in America? After all, we breath the air they pollute just as much as they ours.
August 16, 2006 11:00 AMI worked in a union shop for many years as a front line manager.
I see why the manufacturing industry fell apart in the US the past. It comes from a few factors:
1. The Union: I have heard stories from many union workers of things that were simply ludicris. There were stories of workers who sat and did no work for weeks on end and when they were assigned work, they filed a grievance... and WON!?!? How is a company supposed to remain remotely cost effective when it has so much dead weight on its shoulders?
2. The Companies: In shortsightedness during the 60's and 70's, they failed to thin down before other countries got their manufacturing online. Cutting un-necessary jobs, looking for more efficient methods of production, etc, etc all came too little, too late... hence why in the 80's there was a mass shutting down of mills and other manufacturing.
3. The government: At a time when companies were hurting from the above two factors, the government, instead of helping companies, beat them to death with another side of attack: bureaucracy and regulations. The two largest elements that I am referring to are OSHA and Environmental standards. When companies are struggling to make profits and then someone gets hurt or some pollution occurs, instead of coming in and helping the companies with financial aid, new equipment, or help in maintaining facilities, they charged them nice wads of money. Talk about kicking the economy when its down. Imagine someone who has no money, has lost their job, can't find another due to being overqualified or underqualified for every job, has a mortgage, 2 kids who are both in college with large loans, and then the government gives them a fine of $40,000 because they didn't have enough money to pay their property taxes that year. Oh, wait, I forgot... that does happen.. silly me. Instead of fostering an environment where companies can improve their assets, they made it a problem to improve. New regulations made it more cost effective for companies to keep old delapidated (and inefficient) equipment because new equipment would create stiffer, and sometimes almost not attainable with equipment at the time, standards. To look at the flip side of this coin, you have governments in many other 3rd world countries who PAY their companies to stay in business. They do that so that their people are employed and therefore do not revolt. What does that do? It allows imports to become very very cheap, because those companies no longer have to create a profit.
So, in ending this rant, I have something to say about the current status of unions. They simply suck. The concept of what they started out is great, but now they have completely lost their reason for being. They help keep the lazy, unmotivated, poor employee employed while not fighting for any of the things that a union should be fighting for, such as a 40, or even 50 hour work week instead of the standard 70 or 80 hour week that was the norm where I worked. Instead of pushing for employee safety and additional training, they simply roll over and let the company do its whim in such things.
What does this all boil down to? Personal greed. Whether it be money or power, the current problem with unions AND companies is personal greed. Nobody looks at the long term good of the company, nation, or even their own lives. This will destroy the economy over time. You don't look directly at the ground infront of your shoes when you are running because you might trip. Why do you only look at the here and now when running a business?.... because you most definitely can and will trip.
August 16, 2006 5:23 PMUnion demands + excessive government regulations = jobs lost to overseas companies.
It is that simple!!!
August 17, 2006 11:38 AMPolitically speaking, which side of the aisle are unions and government agencies? Always has and continues to be the Soicalist Left. They are too entrenched to be ousted, therefore failure is assured.
"A government big enough to give you all you want is big enough to take all you have!" -Ronald Reagen
August 23, 2006 3:44 PMIt would be wrong for unions to survive in their current form.
The American unions are, and have been from the beginning, a criminal enterprise based on the concept the workers owned the jobs rather than the producer who created them.
Even John L.'s miner health and safety issues were much overblown -- most intelligent producers see their workers as a valuable resource worth protecting -- the middle manager working for production bonuses was another story and the cause of much grief.
Does that mean unions have no place in a free enterprise environment?
The answer, In My NEVER Humble Opinion, is NO!
The American labor union has consistently given short shrift to its most valuable potential, SKILL DEVELOPMENT!
One the things we learn working `in the field', after much study and schooling, is the tremendous number of `tricks of the trade'.
Those things passed on from generation to generation of skilled artisan.
THIS IS WHAT UNIONS SHOULD BE ABOUT.
I am loathe to see them do that, though, if it means keeping the current thieving cadre in power.
Ironically, it is this MISGUIDED Greed that has infected management who no longer give a damn about a company's reputation and future. Instead, they learn, while getting their ivy league MBA's, to pump the bottom line, collect their fat bonuses and desert -- with Golden life jackets -- the ship they helped sink..
I see already, in the marvelous -- and healthy -- boat-building industry in North Carolina, the meaningful solution, PRODUCER'S UNIONS, where the industry itself comes together to advance its productivity and profitability and, in doing so, is establishing training for those who seek gainful employment. A true win-win situation.
HBH
September 19, 2006 1:19 PMI agree unions must change to survive. They have to be willing to work for the good of the employee that pays his dues. Unions that don't produce valuable workers implode with the business that goes elsewhere to increase profit. Thankfully, government has taken on the job of many unions by ensuring people are not putting themselves in danger to make money for the investor. Unions were necessary, are now useful for business and employees that use them for worker improvement and will be killed if all they do is perpetuate high wages for incompetent workers.
Most union workers that are "let-go" due to management quitting don't become self employed. That is not how they were trained. Most go on to better jobs being more productive for lower wages.
The Ronald Reagan quote above is especially appropriate since he made the Air Traffic Controllers union become a whipping boy for collective bargaining opponents. I believe all of the unions' requests for contract changes were implemented before George H. W. Bush left office, but with younger more compliant and cheaper controllers. The government made criminals of the people they had trained mostly in the military and gave them a chance to work for themselves. The old-time controllers that I know have retired in comfort. A few marriages were ruined, but that might have happened anyway.
September 19, 2006 5:26 PMwhat is the outlook for future construction union groth and wage maintainence
September 19, 2006 7:41 PMIn reference to Unions and the general condition of our manufacturing sector left in this country: I think that NAFTA needs to be re-written in order to help curb the flow of jobs out of this country. In fact, I think new rules should apply to all importers of goods into the United States.
Donald Trump once said that if we taxed the Japanese (they came before the Chinese!) about 20%, that there would be no deficit. I think NAFTA should have been written so that we should require companies to keep at least 50% of their manufacturing base in this country.
Since it is after the fact, I think we should now offer incentives to those companies that do this and a duty on those companies that import over 50% of their goods or services from overseas. 10% would be nothing in the big picture as far as a duty is concerned, and it may give some American manufacturers the edge that they need to compete.
Every other country in the world does this but the good old United States is afraid to do this. Reagan threatened to do this and was most persuasive in getting some things to go his way, but it is time we get someone to stand up to the Chinese. A country that does not produce anything is weak and left at the mercy of the countries that provide those goods. That is why the government still does subsidize some companies here in the United States by providing them with orders whether they need the merchandise or not.
Such as shoe companies. There is only 5% of the shoes worn that are actually made here in the United States and most of that is boots and sandals. A whole industry of textile and much of the leather industry has went by the wayside because of our government's policies of international trading. They figure that if we become the economic power of the world that we can control it and other countries will not bite the hand that feed them. The problem is that there will always be radicals in the world that will throw a wrench in it.
We need to pull back and concentrate on taking care of our own a bit and these new incentives and duties that I propose would do the trick. As far as the unions are concerned, they are a big part of the problem because instead of working together for a company's well being, they are structured so that each person has a particular job. There is no lateral movement to cover an area in a factory where maybe another worker was sick that day or something and then it requires hiring more people than what you actually need to get the job done.
That is the problem with the Big 3 automakers. Saturn's setup is similiar to the Japanese and you do not have that problem. The union needs to change the way it does business and start working with the company to keep the workers working or they will simply outsource those jobs and we will continue to see a downspiraling effect in the industry as a whole.
Make no mistake though; no matter how hard we try to build our manufacturing companies, the government is working very hard to promote wealth and economic stability in other countries at the expense of our own. We need to vote for people who do the right thing and make Washington accountable again. The whole deal with elections is ridiculous. It should not cost 500 million to back a candidate. This just makes people that get elected slaves to the corporations and people who supported them; whether it is to our benefit or not.
America needs to wake up and smell the coffee before it gets any worse. We need a new approach in Congress that will work to provide solutions to problems, not drag them out over 4 or 8 years and never get anywhere near solving a problem.
Take immigration for instance -- whether these people came here illegally or not -- they are here. We need to provide them with a path to citizenship. Perhaps they should be made to work 5 years without getting any social security credit as their penalty for entering illegally. If we create a path to citizenship they will come out of hiding and we will know who is here. Right now we do not know who is here, and this is an obvious security problem. Many who are here are using phony social security numbers but they are paying into a system they will never collect on in that scenario. That is good for the social security system since there is supposed to be a shortage down the road. Whenever you pay twice from different locations into the same social security number, the government knows who has been here longer and that person that owns the number does not get credit twice. That money goes into the general fund. To crack down on the immigrants now just makes them go underground and not pay any taxes at all. They have helped our economy tremendously with merchandise and goods that they buy that they would not if they were not here. Yes, there are problems with them using our hospitals, etc., but if you make them legal, then that stops, as we can track them. They cannot run off and hide and not pay their bills. This alone could be a great help for manufacturing companies to compete in the market place with lower paid labor and these people are glad to do it. They will do jobs that many Americans refuse to do.
We need to think about this and back people in the next election who will put some things in motion instead of just talking about it. Playing footsie does not get the job done!
James Cox
September 21, 2006 6:41 AMI think the US should collectively support the unionization of foreign countries, thereby increasing their wages and improving their working conditions. This would decrease the savings US companies would see from outsourcing, and encourage them to move jobs back to the US.
November 9, 2006 12:24 PM
