At the table, public unions do better
New York transit workers fared better in contract talks than did Northwest Airlines's mechanics.
New York transit workers went on strike for three days and managed to save the right to retire at 55 with half pay, plus they got wage increases totaling almost 12 percent over three years.
Northwest Airlines's mechanics have been on strike since this past August. If they approve the current settlement on December 30th, the best they can hope for is four weeks of layoff pay and a pink slip.
This tale of two unions shows the change in the relative power of private versus public sector unions in the past 40 years. The once seemingly inconsequential municipal unions have successfully protected their wages and benefits.
At the same time, the once powerful private sector unions have become increasingly accustomed to making concessions to hold onto their jobs in the global economy.
But as more cities and states around the country face pressure to cut their long-term costs, like the Metropolitan Transportation Authority in New York, experts say many more municipal unions may also find themselves in a concessionary mode. While the Transit Workers Union did manage to hold their own on the pension issue, in a compromise they agreed to pay more for healthcare - a first for the powerful city union.
"I wouldn't call this a win for the TWU, I'd say it was a gray outcome," says Mitchell Langbert professor at Brooklyn College. "Unions in New York have had so much influence ... that any kind of giveback is a bit of a setback."
Some labor experts contend that the MTA's tough negotiating stance on benefits indicates that the public sector managers are now taking a cue from their private sector counterparts in insisting that workers now take on more responsibility for their benefits. And that could produce more municipal/union clashes in the future.
"There's a reemergence of concessionary bargaining from the 1980's - the idea of insisting on wage cuts, wage freezes, and benefit cuts has come back full force in the airlines, the auto industry, and now in New York," says Gary Chaisson, of Clark University in Worcester, Mass. "Before there was always a quid pro quo that jobs would be saved, but now there's [not]."
Forty years ago, more than 35 percent of the private sector workforce was organized, and unions like the AFL-CIO had the power to make corporate America quake. Meanwhile, most public sector employees couldn't organize by law.
Today, the situation is reversed. Only 8 percent of the private sector employees are unionized, and they've become accustomed to making concessions in their healthcare and pension benefits. In the airlines, the nation's most financially distressed sector, significant wage cuts are also common.
Meanwhile, public sector employees - almost 38 percent of whom are now unionized - are holding their own, despite the fact that cities, towns, and states also are facing increased healthcare costs and billions of dollars in unfunded pension liabilities.
In Kentucky, public employees just negotiated wage and benefit increases. In Illinois, a two week strike of county courthouse workers was settled with wage increases and preserved a cap on healthcare contributions. In California, an uproar forced Gov. Arnold Schwarzenegger (R) to drop his recommendations to replace state worker's traditional defined benefit pensions with less expensive 401(k) type retirement plans. Compare that to what's happened in the Northwest mechanic's strike, probably the most extreme example of the failure of a private sector union to protect gains made by its workers.
Like all of the legacy carriers, Northwest is facing tough competition from low cost carriers and higher fuel costs. Its pilots and salaried management had agreed to wage and benefits cuts. But last summer, when the airline asked the mechanics for cuts and to reduce the workforce, 4,400 mechanics went on strike. [Editor's note: The original version incorrectly stated that Northwest mechanics had taken a pay cut prior to the August strike.]
"Northwest had two years to get ready for that strike. It had an infrastructure in place," says William Adams, president and CEO of Adams, Nash, Haskell & Sheridan in Fort Wright, Ky. "All they had to do was hit speed dial and they had replacement workers ready to go."
It replaced all of the strikers, though they are permanent only at the airline's hub. It now has a mechanics force of about 880, several hundred of whom are union members, who eventually crossed the picket line. [Editor's note: The original version incorrectly stated that all strikers were permanently replaced.]
If the remaining strikers agree to the new contract, none would go back to work. Instead they'd get four weeks layoff pay and be eligible for six months of unemployment, although, they would have priority when new jobs opeed up.
The head of the Aircraft Mechanics Fraternal Association, the mechanics union, called the current contract "the worst in the history of airline labor" and recommended his members vote against it.