Unions Seek Toehold In New Telecom Jobs

Bell Atlantic strike settlement shows how outsourcing is now major issue in service economy.

Hello, operator? Information please.

That's what a telephone company used to be all about. But today phone companies are providing Internet services, computer networking, videoconferencing - even home security. Many of these services - the new growth areas of telecommunications - are performed in remote locations with nonunion labor.

That's one reason some 73,000 Bell Atlantic workers walked off their jobs Aug. 9. Now, with a settlement of the strike, they will have the opportunity to perform more of those jobs.

It's essential for the union's survival because in the telecommunications arena, organized labor has seen a steady erosion of good-paying jobs. Moreover, real wages have dropped 11.6 percent since 1983 as many of these positions have been outsourced or filled by "temp" workers.

The battle to either stop contracting out work or allow organizing efforts at remote locations is a major priority for the unions. Outsourcing and job security were principal reasons for the General Motors strike.

Now the issues are increasingly spreading from the manufacturing floor to service industries - as the Bell Atlantic walkout illustrated. Indeed, this year US companies will spend $140 billion on outsourcing, according to the New York-based Outsourcing Institute.

Leverage in service economy

The issue has become particularly nettlesome for labor-management relations in the service sector because that's where much of the growth in the economy is coming, and many companies can now take advantage of the latest technology to farm out operations and hold down costs.

When Bell Atlantic customers call for a repairman, for instance, they may get an operator in Hampton, Va., where 700 workers now take service calls. Since Virginia is a "right to work state," the workers don't have to join a union. "It's the kind of work you could do from the moon as long as you have a computer terminal," says John Conlon, a Bell Atlantic shop steward in New York.

Under the terms of the new contract announced Aug. 11, 200 to 300 jobs performed at the Virginia facility will be transferred back to unionized employees.

The telecommunications industry is also changing rapidly as companies merge, posing new challenges for unions. For instance, the $37 billion marriage of MCI and WorldCom Inc., which has yet to receive regulatory approval, will be a nonunion shop. Last week, AFL-CIO president John Sweeney wrote to the chairman of the Federal Communications Commission opposing the merger.

"We don't want to see a nonunion company have an advantage over a union company," says Jeff Miller, a spokesman for the Communications Workers of America (CWA), the union that went out on strike.

View from executive suite

From their standpoint, the phone companies are faced with tough competition in many new service areas. For example, Chicago-based Ameritech, as a result of an acquisition, is now involved in the security-monitoring business. "This has traditionally not been a unionized business," says George Stenitzer, a company spokesman. "But the bigger point is that the customers who buy those services have a range of what they want to pay for a given service."

Mindful of this problem, the CWA is trying to negotiate agreements with all the phone companies. So far, they have agreements with Southwest Bell and Pacific Telesis. Among the stipulations: that all the companies' workers, no matter what the service, will be unionized. Ameritech and Bell South is allowing the union to try to organize some of their new services.

Under the tentative CWA agreement with Bell Atlantic, the company would be prohibited from laying off workers or downgrading jobs for two years. Bell Atlantic would also be barred from new subcontracting arrangements.

The unions have good reason to be concerned about their position in the industry. In 1983, 55.5 percent of the workers in the telecommunications business were unionized. By 1986 this had dropped to 28.7 percent. Among the clerical and sales staff, traditionally union jobs, only 35 percent are unionized compared with 63 percent in 1983.

"The bulk of the outsourcing is in jobs that were female dominated," says Eileen Appelbaum, an analyst at the Economic Policy Institute, a think tank in Washington.

As the companies have outsourced, wages for clerical workers and others have fallen. In 1983, Ms. Appelbaum notes, clerical workers made $361 per week. By 1996, this had shrunk to $319 per week.

* Monitor intern Neil Irwin contributed to this report.

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