Wages and Private Sector Unions

Working the Garden

Working the Garden

As we approach Labor Day, the lockout of United Steel Workers at six Allegheny Technologies plants is a sad commentary on the state of affairs of public sector unions.

“Management has locked out more than 2,000 workers in an effort to extract concessions on health and retirement benefits from union members,” according to Michael Hiltzik of the Los Angeles Times.

“ATI is demanding steep increases in out-of-pocket health care expenses and the elimination of pensions for new hires, essentially creating a two-tier wage and benefit system. In addition, ATI wants to expand the use of outside contractors and impose work rule changes that would turn workers into casual laborers, with irregular and unpredictable shift times, less access to overtime pay and worse working conditions,” according to Evan Winters of the World Socialist Web Site.

It is no secret that American business has been working to shed pension and health insurance liabilities, and for the most part has been successful during the post-Reagan era. If they had their way, companies would seek to eliminate most operational liabilities from having employees by outsourcing and using temporary, part-time workers without benefits.

That the company (through a third party) is able to offer temp workers as much as $3,000 per 84-hour week without benefits – plus a guaranteed layoff if a new contract between labor and management is signed – is a demonstration of the power of capital in this capital intensive industry. The average annual wage for a USW worker at Allegheny Technologies is $90,000, which includes mandatory overtime.

If $90,000 per year plus benefits seems like a lot, the work is physically demanding, dirty, repetitive and resoundingly dull. For long-time steel workers, it is a way of life, fraught with injury and physical deterioration. On a scale of wage justice, steel workers should be at the higher end of the range.

Yet the company can, and likely would pay a premium rate to keep the plant operating, albeit at a lower rate of efficiency, until the union contract is settled – or when the temporary workers are made replacement workers. Hiltzik called it a “race to the bottom,”  and friends of labor would agree.

The union is damned if they do and damned if they don’t. On the one hand, some members believe USW leaders are too cozy with Allegheny Technologies management, according to Winters. Rank and file may or may not accept a deal presented for a vote. On the other hand, if there were no USW, management would long ago have made the changes they seek in this new contract.

In 2014, 6.6 percent of private-sector workers in the U.S. were union members, according to the Bureau of Labor Statistics. In Iowa, it is slightly higher at 6.9 percent, or 84,791 union members. As a right to work state, there are another 7,500 private-sector workers who are not union members, but work at a company where the pay and benefits are set by a union contract.

The Allegheny Technologies lockout is a case where each contract negotiation has become an opportunity to break the union, rather than to make adjustments in pay and benefits to serve both employees and the company. Because of the capital intensive nature of the steel industry, labor is required to keep plants operating. Just not workers represented by a union.

~ Written for Blog for Iowa

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