1994 Holds Some Promise for Labor Unions

Despite NAFTA defeat, labor proved clout by rallying most House Democrats to its side

THE American labor movement has had a roller-coaster year: A big defeat called into question its political clout, but it has enough momentum to move into 1994, where it may score some impressive gains.

Labor's big defeat, of course, was its failure to derail the North American Free Trade Agreement (NAFTA). The significance of this remains to be seen.

Several labor observers say the short-term defeat could become a long-term win, since labor demonstrated its clout, carrying 60 percent of House Democrats.

``Labor did its job,'' writes Guy Molyneux, president of the Next America Foundation, ``it just wasn't enough against the president, the majority and minority leaders of both houses of Congress, a united business community and an overwhelming media consensus. In retrospect, what is astonishing is not that NAFTA passed, but that it was such a tough fight.''

The problem is that, in losing, labor has strained relations with the Clinton administration. Organized labor expected to make important gains with the first Democratic president in 12 years. Instead, AFL-CIO President Lane Kirkland spent three weeks avoiding a meeting that President Clinton had been seeking. The two finally met Dec. 10 but declined to speak with reporters or even be photographed together. It is labor's worst rift with a Democratic administration in decades.

Mr. Clinton may need unions to get his health-care package passed. But unions need Clinton even more. The reality for organized labor is that it continues to lose clout in the marketplace. Last year, the share of workers belonging to a union dipped to a new low: 15.8 percent. That is less than half the share organized labor enjoyed in the mid-1950s.

Labor economists disagree about the cause of this decline. Some say it represents the natural evolution of an economy that needs to be highly flexible.

``The whole economy just grew away from unions. Then competition came along and attacked the wage patterns of the heavy industries,'' says Audrey Freedman, a labor economist who heads her own New York consulting firm. ``I would guess by the end of the century there won't be much left except in the public sector.'' Even in absolute terms, the labor movement has lost members. In 1983, it had 17,717,000 members; last year, there were 16,390,000.

BUT unions blame a large part of the decline on labor laws that are tilted against them. That is why they need Clinton. He represents their best hope to enact labor-law changes since 1978, when unions narrowly failed to get legislation passed during the Carter administration.

Labor's first step would be to ban the use of permanent replacement workers. During the Reagan and Bush administrations, several companies hired nonunion workers to replace strikers and continued to operate until the union gave up. Even a company's threat to use permanent replacements made unions think twice about going out on strike. The result was a dramatic decline in labor's use of its strike weapon. Through October, there were only 31 walkouts involving 1,000 workers or more. That was down slightly from 35 for the same period last year and far lower than the 81 large strikes recorded in 1983.

Economists are divided on whether a ban on replacements will really improve organized labor's lot. Ms. Freedman says the ban would be largely a symbolic move. Richard Hurd, director of labor studies at Cornell University, says the ban and other labor-law reform would be more important than NAFTA.

Earlier this year, the US House of Representatives passed a bill to prohibit permanent replacements. But it was stymied in the US Senate by a filibuster. Clinton has promised to sign such a bill.

On the collective-bargaining front this year, unions organized two high-profile strikes and managed to hold their own. Flight attendants struck American Airlines after the company tried to impose a new contract. For five days, the strike grounded nearly two-thirds of American's flights. After Clinton's intervention, the company agreed to have an independent arbitrator determine the final contract.

Last week, the United Mine Workers voted to ratify a new five-year contract, ending a bitter seven-month strike against several unionized coal companies.

These strikes, plus a new steel agreement where organized labor gained seats on the boards of several steel makers, suggests the labor movement is not moribund. But it will need a move in the political arena to make headway.

``Basically, you have the labor movement in a kind of holding action,'' Prof. Hurd says.

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