Labor more militant as economy teeters

Union trouble? Potential strike? Is America slipping into a new period of friction between owners and workers?

Yes, but don't think baseball park. Think office, hospital, cockpit, shipyards.

Far away from the glare of million-dollar athletes and fat TV contracts, the nation's economic slowdown is threatening millions of ordinary workers' paychecks and jobs.

As organized labor asserts itself, potential strikes threaten, in turn, to further undermine the US recovery.

The standoff – particularly in transportation – has implications for everyone from the White House to the factory floor: A West Coast dockyard strike, for example, could halt half of US trade.

The tension comes at an unusual moment, as the economy is sputtering despite 40-year-low interest rates. With big business on the ropes financially and labor aware of weak job markets, neither side has the clear advantage.

Organized labor has weathered worse downturns, of course. But this time the slump is hitting unexpected pockets of the union movement. The result may be that, once again, some unions get squeezed harder than the overall economy.

Even state and local government workers – organized labor's bright spot during the 1990s – face uncharacteristically fierce cuts as states and cities grapple with budget shortfalls.

"Undoubtedly, before the whole thing shakes out, there will be [more] layoffs," says Daniel J. B. Mitchell, professor of management and public policy at the University of California at Los Angeles. "The public sector is certainly in distress," and airlines are "obviously being affected."

Illinois is playing host to some of labor's severest tests.

The most visible union-management conflict outside baseball lies in Chicago. There, the nation's No. 2 airline, United Airlines, is dancing a complicated minuet with its three major unions and the federal government. Last week, the carrier threatened to declare bankruptcy this fall unless its unions could agree to cost cuts in 30 days. United argues the cuts are necessary to qualify for a $1.8 billion federal bailout, available to airlines hurt by last September's terrorist attacks. Without the bailout, the company estimates it will run out of cash this fall.

The outlook remains murky because employees own 55 percent of the airline's stock. Ordinarily, ownership would make workers more amenable to concessions, labor experts say. But in this case, the unions are all waiting to see what concessions the other groups will offer.

This week, the pilots' union postponed a vote on its proposed 10 percent pay cut. Machinists argue the company already owes them $500 million in back pay. And the flight attendants' union says cuts from its lower-paid workers can't possibly make up the shortfall without cooperation from the other two groups.

"At United, things are in pretty dire straits," says Thomas Kochan, professor of management at the Massachusetts Institute of Technology.

Other airlines are closely monitoring the situation, because any concessions to United would hurt their competitive situation. In the past 10 days, US Airways has filed for bankruptcy and American announced up to 7,000 layoffs. Delta, Continental, and Northwest have all announced cuts in their fall flights.

"The last week was one of the worst ever in the airline industry," says Joseph Tiberi, spokesman for the machinists' union.

Meanwhile, some 10,500 union longshoremen on the West Coast are trying to hammer out a new contract to replace the one that expired at the end of June. Should talks fail, it is considered likely that President Bush would step in rather allow a strike to disrupt US shipping.

The double whammy of recession and Sept. 11 has also hit Chicago-based Boeing. The aircraft manufacturer has moved to round-the-clock negotiations with the machinists to wrap up a three-year contract to replace the one that expires Sept. 1. With demand for aircraft slumping, the company has taken the unusual step of saying it would not try to keep production going in the event of a strike.

Another union hard hit by the double whammy: the Hotel Employees and Restaurant Employees International Union. Last week, the union's Chicago local, representing nearly 7,000 employees, authorized a strike Aug. 31 if it doesn't agree on a new contract with Chicago hotels.

"There's a lot of hidden unemployment going on," Professor Kochan says. A slump in hotel and restaurant traffic is forcing managers to cut hours of their already part-time employees.

Even less visible, but equally important, are the cuts that state and local governments are beginning to make. Public-sector unions have been one of the few bright spots for the labor movement since the 1980s recession shrunk union representation in the private sector. Today, for example, unions represent 1 in 10 workers in the private sector, down from 1 in 6 in 1983. Union representation of government employees, meanwhile, has stayed steady – nearly in 4 in 10 workers – during that period.

That may fall a bit now, thanks to dramatic declines in tax revenues. "We've been hit fairly hard in a number of locations already and next year could be even tougher," says Steven Kreisberg, associate director for research and collective bargaining for the American Federation of State, County and Municipal Employees (AFSCME). The union represents state and local government employees. States including Ohio, Minnesota, Iowa, and Nebraska, are laying off workers in a bid to bridge their budget deficits.

Here in Illinois, two departments – corrections and human services – are taking almost all the cuts, which will mean fewer front-line supervisors in state prisons and the closure of several mental-health hospitals.

Here in Alton, Ill., more than 100 union staffers stand to lose their jobs at the civil wing of the local mental health center. The AFSCME local union has gone to court to try to delay the Sept. 15 closure.

One of the few encouraging signs for the union movement comes from a survey of unionized employers. As of last year, nearly 6 in 10 expected to negotiate at least a 3 percent first-year pay increase in new labor contracts for 2002. That was about the same as the previous year, according to the Bureau of National Affairs, the publisher that does the study.