Do unions protect jobs?
Even when a union is able to bargain good pay and strong benefits for workers they represent, there is no guarantee those things will continue far into the future.
Today, many companies face what is referred to as "crippling legacy costs" — costs mostly related to union contracts from long ago, including pension and health care — that the company can no longer afford due to market and profitability changes.
Unfortunately, many workers have learned that having a union does not guarantee having a job. Here are just a few examples:
The Steel Industry:
In the late 1990s, 31 steel-related companies filed for bankruptcy during a four-year period, either to liquidate or reorganize. The companies that liquidated left 125,000 retirees and dependents without the benefits they had been promised. Even today, US Steel and ArcelorMittal are closing plants, and US Steel has frozen wages for many of its unionzed workers.
The Auto Industry:
Beginning in 2007, auto manufacturers and their suppliers laid off thousands of workers. For example, General Motors sold or closed plants in Big City, Texas; Livonia, Michigan; Vandalia, Ohio; Columbus, Ohio; Janesville, Wisconsin; Mansfield, Ohio and Moraine, Ohio, among others.
State and Local government:
In many cities, counties and states, governments can no longer afford union contracts they negotiated during better financial times, and thousands of unionzed government workers have lost jobs. In addition, 43 states made changes to their pension systems between 2009 and 2011, including increased employee contribution requirements (30 states); raised age and service for eligibility (32); and reduced cost of living increases (21). To learn more, click here.
Having a union did not guarantee workers their jobs.
Worse, by looking out for their own interests, unions have actually caused workers to lose their jobs! For example:
The Steelworkers Union refused to agree to a contract that would have kept open a plant with 300 workers.
Here's the whole story:
The United Auto Workers caused workers at the Morane, Ohio GM plant to lose their jobs -- and kept them from being rehired when things improved.
Here's the whole story:
Zodiac Elastomer's manufacturing plant in Arkansas has 300 employees represented by the Steelworkers.
Because the plant is losing money and in danger of closing, management proposed a wage cut of $1.80 per hour.
However, they offered both a bonus plan and a profit-sharing program for employees to supplement workers' wages.
The plan would have allowed a private investor to purchase the plant, and it could have resulted in workers making even more than they did before the hourly pay cut.
Steelworkers Local 607L was against the proposal, since taking a wage cut could hurt the union's bargaining in other companies. The union held a vote that involved only a few workers, and convinced them to vote against the plan.
Now, the company official concluded, “We’re going to have to close the company.”
The workers now are trying to get rid of the union before it's too late.
To read more about this situation, click here.
GM's Moraine plant was an appliance factory that was converted to a pickup truck plant in 1981 after GM sold its Frigidaire brand. At the time, workers chose to stay with their existing union, the International Union of Electrical Workers (IUE), rather than join the UAW.
When soaring fuel prices killed truck and SUV sales in 2007, GM promised work to dozens of UAW-represented plants in exchange for concessions on wages and health care. But by the time GM promised enough work to satisfy the UAW, there was nothing left for Moraine.
On June 3, 2008, GM announced that Moraine and three other light-truck factories would close, including the non-UAW factory in Canada.
Recently, things have improved for GM, but not for the former workers at Moraine. Under a deal made with the UAW during GM's bankruptcy, Moraine's 2,500 laid-off workers are prevented from transferring to other plants, locking them out of the auto industry's rebound.
Moraine workers could apply for a job at another GM plant, but would be treated as new hires, receiving half the wages of their old jobs.
To learn more, click here.
THE BOTTOM LINE:
Unions say they protect workers. But history shows that what unions REALLY protect is their own interests - even when that means sacrificing workers.