Union campaign against union jobs

by David G. Tuerck

Led by the Communication Workers of America and the International Brotherhood of Electrical Workers, 45,000 wireline workers — 6,000 of whom are in Massachusetts — have gone on strike against Verizon. The strike is taking place across eight states and the District of Columbia.

The unions are striking over threatened reductions in health care, disability, child care and pension benefits, and over threats to contract out to “low-wage contractors.” There are other complaints about high profits, overpaid managers and a tax rebate “squeezed out of the U.S. government.”

Verizon, for its part, points out that it is struggling against realities that the union bosses choose to ignore. Principal among these realities is a 47 percent decline in its wireline business over the past five years, most of this to wireless and cable competitors. Thirty percent of American households are wireless only. And the cable companies are not hobbled by the same work rules and contracts that have blunted Verizon’s efforts to maintain market share.

The company is trying to counter the loss of wireline business by expanding its FiOS service and by asking workers to accept modernized work rules and some reductions in benefits. It argues that the average value of all benefits (excluding wages) is $50,000 per worker and that its workers currently contribute nothing to their health care benefits. Some of the striking workers earn as much as $140,000 in salary, benefits and overtime.

The strike is taking place against a backdrop of declining union membership and clout. Union membership has shrunk from 20 percent of all workers in 1983 to 12 percent today. There is a reason for the decline in union membership and clout. The old model of big unions facing down big companies has become obsolete in the face of globalization and technological advancement — trends that have turned telecommunications from an industry consisting of a few big monopolies into one characterized by ever-growing competition.

The strikers should be careful what they wish for: A settlement that ends without significant concessions in wages and benefits by the unions will be a victory for the union bosses, but not for the workers whose jobs their recalcitrance is putting at risk.

David G. Tuerck is professor and chairman of economics and executive director of the Beacon Hill Institute at Suffolk University


This article appeared in the Boston Business Journal on August 19, 2011.

Format revised on August 25, 2010 11:58 AM