chapter 13

WHAT SHOULD UNIONS DO?

Labor unions are the representatives of workers. As such, unions champion the interests and aspirations of workers, not vice versa. Unions do not determine these aspirations, but rather must shape their strategies and structures to respond to them; the early AFL craft unions, the CIO industrial unions in the 1930s, and the public sector unions in the 1960s created strategies and structures to fit the blossoming needs of skilled craftsmen, mass manufacturing workers, and government employees, respectively.1 As employment relationships change in response to the pressures of globalization, flexibility, and decentralization, as the nature of work changes in response to new workforce demographics (including ethnicity, gender, and education) and emerging technologies, and as the U.S. economy experiences shifts in industries and occupations, workers likely create a unique sense of workplace justice different from earlier eras. Unions will have to adapt to these changes. As the world and work are changing in diverse ways, there are numerous alternative directions for U.S. unions (see Figure 13.1). A range of key possibilities is summarized in Table 13.1. The first two alternatives in Table 13.1 seek to increase the power of unions in the workplace and in society, primarily in opposition to business; the third would increase power through greater integration into capitalistic decision making. The remaining possibilities are different ways to make unions more attractive to workers, and perhaps even to business. Note further that most of these options involve moving away from a servicing model by actively engaging workers, albeit in different ways. Before we consider these options in more detail, some cautionary notes are important. First, the categories are presented here as intentionally broad to stimulate wide-ranging reflection and debate. Second, the options are not necessarily mutually exclusive, and can be packaged together in various ways. Third, even with the broad possibilities presented here, it is not clear whether one size fits all, or whether various workers, companies, industries, and occupations are best suited to diverse forms of unionism. Fourth, some directions are consistent with existing U.S. labor law, whereas others require legal changes. And fifth, except for employee ownership unionism, these alternatives apply to public sector unionism, too. Solidarity Unionism - Proposals that focus on increasing the traditional bargaining power of U.S. unions can be grouped in a category of solidarity unionism because they generally rely on increasing labor power through enhanced solidarity within and across workplaces. Of the options listed in Table 13.1, solidarity unionism is the closest to the existing model of business unionism—as illustrated by solidarity unionism's focus on strengthening collective bargaining. Relative to some proposals that emphasize greater responsiveness to business concerns, proponents of solidarity unionism make no apologies for championing a strong labor movement as the protector of worker interests in opposition to management. Unions are seen as a needed force of worker power and protection; the problem with the current weakness of unions "is not that most American workers have no representative to develop and to express their views on the business strategies and tactics, or the personnel policies and benefits, chosen by their employers. The problem is that American workers have lost power—power to extract a larger share of the returns of American enterprise and power to protect individual employees from arbitrary, unjust, or discriminatory treatment by their managers.2" - Proponents of this view advocate more aggressive organizing and bargaining tactics to bolster labor's power.3 This might include organizing workers outside of the mainstream labor movement. For example, immigrant workers who are segregated into ethnic enclaves in American workplaces and communities develop strong collective bonds through their shared struggles and are ripe for unionization efforts that build on this solidarity.4 And when necessary, labor advocates argue for the greater use of strikes, sit-ins, civil disobedience, and other militant tactics to mobilize worker power.5 These efforts to build greater labor power frequently include developing greater solidarity linkages with other workers. For example, a two-month strike against Marriott in 2018 for better pay, stable schedules, and stronger sexual harassment protections involved hotel workers across four states, massive rallies, loud protests that sometimes blocked streets, and efforts to have other workers not stay at Marriott. On the other hand, at least one labor supporter has advocated for a strategy of "fortress unionism" in which the labor movement focuses on maintaining its strength in its traditional areas and existing locals while waiting for nonunion workers to get fed up with the status quo in large numbers as in the 1930s because this "is how massive union growth occurs—workers take matters into their own hands and then unions capture that energy like lightning in a bottle."6 Increased solidarity among rank-and-file members within unions is also emphasized. The development of this solidarity often focuses on harnessing an organizing model of representation.7 Recall from Chapter 5 that in contrast to the servicing model, an organizing model seeks to create widespread rank-and-file participation in union activities. These efforts are closely related to efforts to increase internal union democracy, thereby creating a vibrant and powerful labor movement through rank-and-file involvement.8 This involves altering the traditional structure of labor unions to become less bureaucratic, more decentralized, and more participatory. Relatedly is a call for "improvisational unionism."9 Rather than carefully planning an action such as a strike in great detail, a union could embrace improvisation in which worker protests and other actions unfold organically, and small victories spread into larger ones by taking advantage of whatever opportunities present themselves. This requires embracing a culture of improvisation. Another proposed change in union structure is the call for moving beyond industrial unionism to occupational unionism.10 This represents a partial return to earlier forms of craft unionism in that occupational unionism emphasizes workers' identification with their occupations rather than their specific employers. It moves beyond craft unionism, however, in not being limited to skilled crafts. Waitresses, flight attendants, and janitors, for example, can have strong occupational interests that are tied more closely to those same occupations at other companies than to other workers at their own companies (see the accompanying "Labor Relations Application" box discussing occupational unionism). These occupational interests are the basis for solidarity across employers. This model might be well suited to the 21st century as the trends toward the increased use of contingent workers and increased job switching (rather than stable lifetime employment) continue. - Others have encouraged a strategy in which unions focus on negotiating members-only agreements by bargaining on behalf of their supporters in workplaces where majority support has not yet been achieved (see Chapter 4).11 Such a union would be a members-only union that only represents workers who join the union. Beyond bringing benefits to those members, this also has the potential to increase workplace power by gaining a foothold in a nonunion workplace, demonstrating the benefits of unionism to reluctant workers, and ultimately achieving majority support. This is what often happened in the 1930s. Taking this even further, if a union intentionally pursued members-only bargaining across many workplaces in the same industry, this could provide the foundation for a union to establish industry-wide labor standards.12 If successful, this would increase union influence by creating something approaching European sector bargaining (Chapter 12), and by taking wages out of competition, this could reduce employer incentives to fight unionization. Social Movement Unionism - The category of solidarity unionism captures a range of ideas that all ultimately seek to organize more workers and increase labor union power to improve wages and working conditions for them. Social movement unionism rejects the business unionism focus on collective bargaining and instead sees labor unions as representatives of the entire working class and as part of a broader social movement of community, social, and political activist groups.13 Rather than winning gains for union-represented workers through collective bargaining, social movement unionism involves building strong coalitions with other community groups to achieve social change through social and political channels, and to better integrate workers' workplace, family, and community concerns through a "whole worker" mindset.14 Social movement unionism can also help revitalize unions as organizations, and thereby strengthen union bargaining power. In other words, advocates of a stronger U.S. labor movement see greater social activism as an important route to achieving more power in society and at the bargaining table.15 In this way, efforts to increase grassroots participation and mobilization can serve both social movement unionism and solidarity unionism. - A popular example of using community activism and union alliances with social, religious, and political groups to increase labor's effectiveness is the Justice for Janitors campaigns.16 These campaigns expand the drive to organize janitors from a workplace issue to a community issue. Public demonstrations, strong ties with immigrants' rights and religious groups, and active participation by janitors—not just union leaders—give these campaigns social vibrancy and have won bargaining rights and contracts. For example, during a campaign in Washington, D.C., the Service Employees International Union (SEIU) led multiple mass demonstrations that blocked traffic, marched through city streets, and picketed various locations. But they did not simply demand better wages—the campaign highlighted the social issues revealed by the janitors' conditions. The low pay and sexual harassment of janitors was contrasted with the massive tax breaks granted to the property owners and the resulting decline in school funding and other city services. In the words of one SEIU official, "Civil disobedience by a cross-section of supporters, including religious and other community leaders, helps draw attention to the janitors' plight. The themes of the campaign play a role here: "Justice" as opposed to "wage" slogans help broaden the appeal of the workers' struggle. The problems of the working poor, mistreatment of minority groups, sexual harassment, and lack of health insurance are issues that will attract a diverse constituency. [The] Justice for Janitors picket line gives sympathizers a vehicle for expressing their diverse concerns.17" - The Justice for Janitors campaigns reject a narrow business unionism approach and try instead to create a broad social movement in which organized labor champions workers' issues in their social context beyond the confines of individual workplaces. There are now a large number of worker centers and related "alt-labor" community-based organizations that advocate for low-wage workers, such as the Restaurant Opportunities Center, Arise Chicago (with strong labor-religion foundations), and Centro de Trabajadores Unidos en la Lucha.18 Worker centers typically focus on street and legal activism: protest, political lobbying, lawsuits, and educating workers about their rights in order to combat low pay, lack of sick leave, harassment and discrimination, wage theft, and other issues. While this might evolve into an organizing drive and ultimately collective bargaining, worker centers have arisen to fill a void stemming from a lack of unionization among low-wage workers who are often racial and ethnic minorities where unionizing is difficult because of turnover, employer opposition, or exclusion from the National Labor Relations Act. As such, worker centers often locate themselves in a particular community, and become an important community center providing advocacy, education, support, and social activities.19 Worker centers have traditionally been independent of labor unions, but worker center-labor union partnerships are growing, which can help unions develop stronger community connections while also diversifying their strategies, ranks, and leadership.20 Indeed, the Fight for $15 movement is union-led but resembles a worker center in embracing mobilization and protest tactics that support improvements in fast-food pay and conditions through bad publicity and legislative change, even though unionization is also a goal.21 - Union-community linkages are also central to an initiative called "bargaining for the common good."22 The primary principle is broadening and reframing collective bargaining goals into the pursuit of issues that simultaneously benefit workers and the local community—hence, bargaining for the common good. This can take place in various settings—for example, tying the compensation of bank workers to community concerns with predatory lending—but the leading examples are in the public sector, especially in K-12 education. In that context, teacher unions partner with parents' groups and use contract negotiations as basis for advocating for students through, for example, reducing class sizes, adding more counselors and other support positions, and creating more opportunities for parental involvement. Community groups are brought into the planning process, might have representatives at the bargaining table, and serve as important allies through community demonstrations, lobbying of local school board members, and the like. Addressing problems of institutionalized racism is also often a feature of bargaining for the common good: in K-12 negotiations, for example, the lasting discriminatory effects of funding inequalities and disciplinary policies that criminalize students can be studied and tackled. - Note that social movement unionism attempts to move beyond the sole exercise of what is called "structural power" by also changing how the public thinks about certain issues. Structural power is traditional leverage that comes from imposing costs on another party, such as when a strike or a demonstration drives customers away from an employer. But there can also be power that comes from moral legitimacy. So in the face of declining structural power due to globalization and other factors, social movement unionism seeks greater leverage by attempting to change shared meanings and values, and thus altering beliefs about what is considered socially unacceptable.23 Just as the civil rights movement sought to make racial discrimination morally unacceptable, coalitions of unions and community groups seek to reframe labor issues in ways that give their causes, such as harsh working conditions for migrant farmworkers or poorly-funded public schools, moral legitimacy. This underscores the power of meanings in our society, such as when only certain forms of work are seen as "real work," and thus only certain workers are seen as worthy of certain standards.24 Campaigns to win better conditions for home-based health care workers, for example, therefore start with efforts to get the public to see these individuals not simply as caregivers but also as legitimate workers. - Lastly, another significant aspect of increased labor activism is reasserting influence in the political arena. Labor's influence with the Democratic Party fell to an all-time low in the 1970s; since then the AFL-CIO and individual unions have devoted renewed attention to political activities.25 In recent elections, organized labor has focused on creating vibrant grassroots efforts that involves many rank-and-file workers in campaigning for pro-labor political candidates and in get-out-the-vote efforts. The AFL-CIO also tries to mobilize nonunion workers through its community organization Working America. Nevertheless, organized labor continues to face a hostile political environment. This has been most evident under Republican administrations, but even during the Democratic administrations of Bill Clinton and Barack Obama, few of labor's legislative priorities were enacted. Some labor supporters have therefore called for the creation of an independent labor party as an additional component of a social movement unionism strategy.26 Employee Ownership Unionism - A very different route to increasing worker influence within a business is through employee ownership.27 If employees own stock in a company with voting rights in corporate governance or direct representation on a corporation's board of directors, employees can participate in business decision making at the highest levels of the corporation. These can serve as channels of influence for workers to articulate their interests, and companies might weigh employees' interests (such as job security) more heavily when making strategic decisions. Employee ownership unionism, therefore, seeks to represent workers by facilitating employee ownership of companies. Some examples of union involvement in employee ownership efforts include employee stock ownership plans (ESOPs) in the steel, trucking, and airline industries. These ESOPs have usually occurred when the companies were struggling and involved employees trading wage and benefit concessions for stock ownership. To date, organized labor has therefore participated in ESOPs as a defensive rather than a proactive representation strategy. Moreover, the difficulty of using employee ownership to advocate for employee interests is underscored by the fact that only a tiny minority of ESOPs include employee representatives on corporations' boards of directors.28 Another potential direction of employee ownership unionism focuses on the investment policies of pension funds. Employee pension funds in the United States have several trillion dollars invested in stocks, bonds, and other instruments—this is labor's capital.29 Various efforts are under way to use the power of these assets to promote workers' interests by creating "worker-owner" investment objectives that pursue a broader social agenda than simply short-term financial returns. Union pension funds are leading a movement of shareholder activism in which workers use their rights as shareholders to submit shareholder proposals and resolutions to limit executive compensation, ensure the independence of outside board members, and bring about other changes in corporate strategies and governance.30 These proposals and resolutions are voted on by shareholders; even if they do not pass, their publicity can cause companies to make changes. One potential for employee ownership unionism is expanding shareholder resolutions to encompass employment practices as well as corporate governance issues. A second method is using union pension funds to make worker-friendly investments, such as in unionized construction projects via the AFL-CIO's Building Investment Trust, but legal constraints need to be relaxed before direct investment can occur on a broad scale.31 The use of labor's capital to promote efficiency, equity, and voice is an important labor relations development to watch. Efficiency-Enhancing Unionism - Solidarity unionism and social movement unionism include diverse initiatives or proposals that can generally be thought of as militant or activist and that embody a strong need to represent workers' interests in opposition to employers' interests. Enhanced employee ownership rights could increase power through greater integration into capitalistic decision-making. The remaining alternatives in Figure 13.1 and Table 13.1 seek to create new forms of unionism that are not as adversarial or oppositional, which could be more attractive to some workers, and perhaps even to business. Some see these alternatives as more productive, but others see them as weak. The most extreme case of the nonoppositional—that is, cooperative—approach can be labeled efficiency-enhancing unionism. Efficiency-enhancing unionism sees labor unions as strategic business partners that can help advance productivity, quality, and competitiveness. One proposal for this type of unionism argues for replacing the typical detailed union contract with an enterprise compact.32 Note the cooperative philosophy: "A contract is essentially adversarial in nature, representing a compromise between the separate interests of each party to the agreement. In contrast, a compact is fundamentally a cooperative document, providing for a mutual vision and a joint system for achieving common goals that foster the general well-being of all stakeholders in a given endeavor.33 " - Thus, an enterprise compact specifies the principles of a labor-management relationship based on union and employee involvement in business decision making in return for greater union commitment to competitiveness, as well as increased sharing by employees in both the risks and rewards of the company. Examples of such principles might include productivity growth targets and prices established jointly by labor and management, guaranteed employment security, base compensation established by productivity growth with added profit sharing, and the replacement of management rights clauses with joint decision making.34 A leading example of this approach was the automaker Saturn before its reversion to a more traditional system. Recall from Chapter 10 that the union and managers at Saturn used to jointly make strategic business decisions, and that teams of workers were empowered to make daily production and work decisions. Recall further that supporters of this form of unionism view this as a way to serve the company's interests of competitiveness and quality while providing a richer, positive work environment for employees; critics see it as selling out and leaving workers without strong protections against management. - Another approach to efficiency-enhancing unionism is through active union involvement in providing training. For example, the Wisconsin State AFL-CIO has been instrumental in establishing and running the Wisconsin Regional Training Partnership (WRTP). In cooperation with both private sector companies and public sector agencies and technical colleges, the WRTP provides training across the broad spectrum of workforce needs—from basic job and language skills to advanced technical skills. The Culinary Academy of Las Vegas is an extensive training operation run jointly by two hospitality unions and major properties on the Las Vegas Strip that has trained over 40,000 workers to be cooks, bartenders, servers, and room attendants. Elsewhere across the country, unions have provided training for construction, hospital, and child care workers, to name just a few. This cooperative approach can increase workers' incomes while providing a more skilled—and therefore more efficient and competitive—workforce to employers. Employee Empowerment Unionism - A frequent concern with the traditional postwar model of U.S. business unionism is its emphasis on uniformity and standardization through rules.35 Not only does this job control unionism approach clash with managerial drives for flexibility (Chapter 10), but it is also reasonable to question whether this is what workers want. In employee empowerment unionism, unions negotiate processes rather than outcomes and thus provide the framework for greater employee autonomy, discretion, and empowerment (Chapter 5).36 Unlike systems installed unilaterally by employers, negotiated processes can include minimum standards and procedural safeguards (ultimately backed up by a strike threat). Unions can also provide expertise and support to employees as needed. In professional sports and the entertainment industry, unions typically only negotiate minimum salaries. Within the processes negotiated by the unions, individual players or actors negotiate their own salaries (see the accompanying "Labor Relations Application" box discussing Hollywood unions). As an example among office workers, the clerical workers at Harvard University negotiated joint committees and problem-solving systems instead of rules and a traditional grievance procedure. In this way, individual employees are empowered to participate in determining their working conditions within a union-negotiated framework and with the union's support (see the accompanying "Labor Relations Application" box discussing self-representation at Harvard).37 Employee empowerment unionism can also overlap with efficiency-enhancing unionism in workplaces run by self-directed work teams, as was the case at Saturn. Associational Unionism - Another possible direction for employee representation is called associational unionism.38 This perspective is rooted in a contrast with the postwar model of industrial unionism and U.S. labor law. These postwar institutions are premised on a balance of power between (often large) unions and (often large) corporations. In a mass manufacturing economy, this balance was achieved through rules-based contracts; stability was achieved through uniformity of contracts across an industry. In other words, both union representation and production were bureaucratic. Proponents of associational unionism argue that this bureaucratic balance of power no longer matches the need for nimble, flexible, and competitive organizations. Perhaps more importantly, the traditional sharp distinction between labor and management no longer matches large numbers of today's semiprofessional, professional, and knowledge workers. These workers have multiple interests—personal, occupational, industry-specific, and company-specific—and often join professional associations to serve their interests in a flexible, positive, and nonadversarial way, such as through training and establishing professional standards. But professional associations, such as the Society for Human Resource Management (SHRM), generally lack or even pursue power in the workplace. - Associational unionism attempts to blend the multiple-interest philosophy and services of professional associations with the power of unions to create a new organizational form that is more powerful than an association but more decentralized and flexible than a typical U.S. union. Associational unions (if they existed) could strike, but like a professional association they could also use other tactics such as political pressure and publicity. Such unions could also negotiate contracts with employers; but because of the multiple interests they represent, associational unions would have to become skilled in multilateral negotiations, not just bilateral negotiations with a single employer. In fact, this proposed system is not based on exclusive representation; rather, workers can belong to various associations that reflect their interests and ideals. For example, the Freelancers Union (www.freelancersunion.org) is an associational union for independent workers. While it doesn't engage in collective bargaining, it uses collective strength and shared experiences through education, cooperation, political lobbying, and shared identity to improve conditions for independent workers. This includes obtaining group rates for health care insurance and successfully lobbying the City of New York to pass a law protecting freelancers from nonpayment.39 In other words, associational unions coordinate employee networking with others who share similar interests. - In sum, there are a number of possible directions for private and public sector labor unions in the 21st century. As shown in Table 13.1, there are pros and cons to all of these directions. These alternatives can also be analyzed against the critical dimensions of the employment relationship: efficiency, equity, and voice. Efficiency is emphasized most strongly by efficiency-enhancing unionism, but employee ownership unionism can also promote efficiency if stock ownership motivates employees or if social investing produces stable companies with high-performance employment systems. Moreover, the flexibility and individual discretion aspects of employee empowerment unionism and associational unionism can also be consistent with increased competitiveness. Equity is stressed most sharply in solidarity unionism and social movement unionism and is pursued through strong bargaining and social power. In contrast, employee empowerment unionism seeks equity through minimum standards and procedural safeguards. Social voice is an important feature of social movement unionism, while workplace voice is delivered in alternative ways in the other models. Employee ownership unionism provides workplace voice through participation in corporate governance, while employee empowerment and associational unionism emphasize a combination of individual and collective voice mechanisms. - Discussions of the future of unionism should not ignore the current weak state of the U.S. labor movement. In particular, can weak unions successfully pursue more cooperative strategies such as efficiency-enhancing or employee empowerment unionism? Cooperative behavior from a position of weakness likely promotes efficiency, but it is unlikely to revive the labor movement or make positive contributions to equity and voice. Moreover, weak unions that feel that their existence is threatened might turn to militant, adversarial strategies to increase their power. As such, the extent to which unions are institutionally secure in the economic, political, and social system of the 21st century can shape in which direction U.S. unions move (see Figure 13.1). Whether unions are secure or threatened depends not only on choices that the labor movement must make but also on corporate behavior and public policies.

STRIKING A BALANCE

A major goal of this book has been to present an intellectual framework for understanding labor relations that provides an effective foundation not only for understanding the development and operation of the New Deal industrial relations system and how current U.S. labor relations processes work but also for critically evaluating this system, these processes, and the need for reform. To do this, we need to go beyond an examination of how the processes work (though this is important) and ask what the processes are trying to accomplish. Studying any aspect of the employment relationship, in fact, should be rooted in the objectives of the employment relationship: efficiency, equity, and voice. Efficiency is the effective use of labor to promote competitiveness, cost-effective service delivery, and economic prosperity; equity encompasses fair labor standards in both material outcomes and personal treatment; and voice is the ability to have meaningful input into decisions. The framework for studying labor relations used in this book is therefore how employee representation—typically through independent labor unions—contributes (or not) to the achievement of efficiency, equity, and voice. The goal of the U.S. labor relations system is to balance efficiency, equity, and voice through balancing property rights and labor rights (Part One). Laws, processes, and behaviors should seek to handle employment relationship conflict and power imbalances between employees and employers in ways that promote effective private and public sector organizations, a healthy economy, equitable outcomes, respect for human dignity, and fulfillment of the principles of democracy. In the language of the previous section, labor relations and labor law must navigate a number of critical dualities: tensions between property rights and labor rights, between work rules and flexibility, between bilateral negotiation and unilateral control, and among efficiency, equity, and voice. Different schools of thought about the nature of the employment relationship have varying beliefs about the best way to fulfill these goals.93 Neoliberalism emphasizes providing the greatest good for the greatest number through free-market exchange; the foundation of this thinking is perfect competition. The human resource management school focuses on management-led policies and practices that can simultaneously benefit employers and employees; this perspective is rooted in the unitarist assumption about a lack of employment relationship conflict. Critical, or Marxist, industrial relations emphasize radically changing capitalist institutions to give workers more control in the workplace and throughout society. The basis for this school of thought is conflict between labor and capital that is pervasive throughout society—not narrow economic conflict limited to the employment relationship. Mainstream U.S. industrial relations focus on adding institutional checks and balances to the employment relationship in the private and public sectors. This perspective is rooted in pluralist employment relationship conflict—conflict that includes some win-win opportunities for mutual gain and some win-lose, zero-sum clashes of interests. The New Deal industrial relations system is a crucial centerpiece of the pluralist industrial relations system of employment relationship checks and balances. U.S. labor law explicitly protects workers' rights to form unions and collectively bargain because it is believed that these protections balance efficiency, equity, and voice.94 Efficiency is served through industrial peace and increased consumer purchasing power through increased labor bargaining power. Efficiency is also promoted through the relatively limited incursions of labor law: Employee rights are confined to wages and working conditions, not organizational decision making, and rather than a government bureaucracy imposing specific outcomes, the parties fashion their own agreements to shape their particular circumstances. Equity is fulfilled through collective rather than individual labor power to better equalize corporate bargaining power. This collective power can prevent exploitation (recall the labor problem of the early 20th century from Chapter 2), promote a more equitable distribution of economic rewards, and provide economic security. Voice is achieved by replacing unilateral managerial authority with the requirement that employee issues be negotiated with employee representatives. As such, workers have input into decisions that affect them. Understanding the major processes of the U.S. labor relations system—union organizing, bargaining contracts, resolving conflicts, and administering grievances—was therefore the major goal of Part Two of this book. But as we discussed in Part Three, the traditional operation of processes such as adversarial negotiations and the typical postwar outcomes such as detailed contracts are under heavy pressure to change in both the private and public sectors because of global competition, financialization, and the need for workplace flexibility, employee involvement, and labor-management partnerships. The New Deal industrial relations system's processes and work rules are not important in their own right—they are important only to the extent that they promote efficiency, equity, and voice. Labor relations processes are means to greater ends, not untouchable ends in themselves. As such, Part Four of this book discussed various alternatives to the traditional New Deal system for promoting efficiency, equity, and voice. Understanding the current system, the role of labor unions, and future systems of employee representation all require appreciation of the same fundamental principle: striking a balance. The major concluding question of this book is therefore what type of system for governing the workplace—and in particular, what form(s) of employee representation—will best achieve the goals of the employment relationship in the economic, social, technological, and global environment of the 21st century. The Occupy and Fight for $15 movements have drawn attention to the importance of this type of deep question. Creating the ideal system will likely require changing union and corporate strategies, visions of government, social norms, and public policies—changes that will be shaped by the choices that all of us make as workers, managers, consumers, investors, taxpayers, and citizens. With respect to policy, there are four major possible directions for U.S. labor law in the 21st century: The NLRA (and public sector labor law) can be strengthened, deregulated, loosened, or transformed. Note how these different directions imply different systems of workplace governance—a continued reliance on traditional labor unions, a renewed emphasis on free markets, greater forms of nonunion employee representation, or some new model of worker representation, respectively. As such, labor law reform cannot and should not be separated from the larger question of how employment relationships of the future will be structured. Furthermore, as described in Chapter 11, international debates over free trade, fair trade, and other issues in the global economy are closely related to issues of governing the global workplace and the viability of domestic unions. And there are also various options for changing corporate governance structures and expectations surrounding corporate social responsibility, or the nature of public value in the public sector. These issues are closely interrelated, and the direction of reforms should be mutually supporting rather than addressed in isolation from each other. Put differently, a free trade model of global governance and the continued primacy of shareholders in corporate governance or of budget austerity in the public sector can potentially undermine systems of workplace governance that seek a balance between employers and employees. These linkages should not be overlooked—workplace practices, labor laws, corporate governance or public value norms, and international treaties must work together to strike a balance. Finally, in considering the various aspects of what labor relations should do in the future and the various perspectives on the need to potentially reform labor unions, corporate and public sector agency behavior, and labor law, there is the difficult question of law versus behavior. If U.S. labor law is a major determinant of outcomes, the law likely needs to be changed. But if the law provides only the broad skeleton of the system and various outcomes are possible, then perhaps behavior—not the law—needs reforming. To wit, if the union density decline stems from weaknesses in the NLRA or public sector labor law, many argue that legal reform is needed. But if the union density decline reflects a lack of worker demand for unionization, what probably needs reform is union behavior rather than the law. As a second example, does the NLRA or public sector labor law force labor and management into an adversarial relationship with little employee involvement and flexibility? Perhaps. But there are notable examples under the NLRA and public sector labor law of productive labor-management partnerships. As such, is it the law or behavior—of both labor and management—that needs reforming? Like many other things in labor relations, the truth likely lies in the middle, and thus a careful examination of multiple perspectives is required.

THE FUTURE OF U.S. LABOR RELATIONS POLICY

Any discussion of the future of U.S. labor relations is incomplete without considering alternative directions for U.S. public policies pertaining to labor relations—in other words, the question of labor law reform. This is a tremendously important issue with ramifications that extend far beyond the small fraction of U.S. workplaces that are unionized (see the accompanying "Nonunion Application" box). There is perhaps widespread agreement among proponents and opponents of labor unions that U.S. labor law needs to be reformed. U.S. labor law dates back to the 1930s and 1940s. Think of the drastic changes in technology, demographics, industries and occupations, globalization, financialization, and other areas of economic and social life that have occurred since that time. There is certainly good reason to question whether U.S. labor law—and by extension, the current system of determining employment terms and conditions ("workplace governance")—still makes sense more than half a century later. In other words, does the existing labor law system continue to produce the desired combination of efficiency, equity, and voice?58 Many say that the answer to this question is no, and thus they believe that U.S. labor law needs to be reformed. But because of differing beliefs about how the employment relationship works, there are significant disagreements over how labor law should be revised. It is therefore important to consider four major directions for the future of U.S. labor policy: strengthening, deregulating, loosening, or transforming the National Labor Relations Act (NLRA) system (see Figure 13.3). While the discussion here will be in the context of the NLRA, the same alternative directions apply equally well to public sector labor law. Strengthening the NLRA - Union membership as a fraction of the U.S. workforce—that is, union density—has been declining in the U.S. private sector since the 1950s (recall Chapter 1). One explanation for this decline is that weaknesses in the law allow employers to suppress unionization efforts. Direct evidence for this contention is difficult to obtain, but proponents of this view cite the existence of a representation gap: Significant numbers of employees say they want more workplace representation than they have.59 Moreover, the union density rate is much higher in the public sector than in the private sector, and it is commonly believed that public sector employers have fewer opportunities to fight unionization than private sector employers—the local board of education cannot threaten to shut down a school and move it to a lower-cost country in response to a union organizing drive. Consequently, organized labor and workers' rights supporters believe that weaknesses in the NLRA are an important cause of the frail health of today's unions. When combined with a pluralist industrial relations view that sees unions as needed counterweights to corporate power, the logical consequence of this thinking is to advocate strengthening the NLRA. - Among those who believe the NLRA needs strengthening, one perspective asserts that the NLRA's weaknesses are the result of decades of unfavorable court decisions that have effectively rewritten the law.60 In this view, the route to strengthening the NLRA is to educate judges about labor issues and reverse these legal decisions to restore the original intent of the law. More common, however, is the belief that the NLRA's weaknesses stem from management exploitation of the NLRA.61 In this view, congressional rather than judicial action to revise and amend the NLRA is urgent. Such calls for strengthening the NLRA are increasingly rooted in the argument that the current NLRA framework fails to fulfill international human rights standards pertaining to freedom of association and collective bargaining (recall Chapter 1).62 Table 13.2 lists the major options for strengthening the NLRA. It is useful to consider two categories: remedial and substantive changes.63 Remedial changes focus on strengthening the remedies when the NLRA is violated, especially imposing monetary penalties, stronger remedial directives such as bargaining orders, and perhaps even criminal penalties.64 Substantive changes include expanding NLRA coverage to include low-level supervisors and independent contractors such as gig workers, removing restrictions on secondary boycotts, and banning permanent strike replacements.65 The substantive issue that receives the most attention, however, is representation elections. - Criticisms of the election process include problems with delay and the asymmetries between managers and union organizers, especially in access to employees.66 Recall from Chapter 6 that employers can force employees to listen to their views in captive audience speeches while using private property rights to bar union organizers from the workplace. Union organizers are relegated to trying to contact employees in their homes. Commonly proposed reforms therefore include instant elections or card check recognition procedures that avoid a long and contentious campaigning period, restrictions on management campaigning or equal access to union organizers, punitive damages and immediate reinstatement for illegally discharged union supporters, and first contract arbitration. Many of these reforms have been included in the proposed Employee Free Choice Act, which was organized labor's top legislative priority during the early years of the Obama presidency, but failed to be enacted into law. Others urge rethinking the NRLB's approach to electronic communication, such as allowing unions to send mass e-mail messages to counter captive audience speeches.67 All of these involve an important theme in this book: How to balance property rights versus labor rights, and by extension how to balance efficiency, equity, and voice. Still others argue that the certification process is so broken that more fundamental changes are needed. A bolder change would be to make NLRB elections an automatic, annual occurrence for all workers.68 This is rooted in seeing the burden on workers to get an election scheduled as being too great, and more importantly, that when union density is so low, most workers do not even consider unionization as a possibility. Having regular elections would bring certification elections into line with political elections, and would not only perhaps make it easier to gain certification but also to get rid of an ineffective or undesirable union. In other words, it would be better to have an "easy in, easy out" system for determining union representation.69 A related proposal would go one step further and flip the default status from nonunion to union.70 That is, in the current system, a workplace starts out nonunion and remains nonunion until workers vote a union in, but an alternative would be to start out unionized until workers vote a union out. Deregulating the NLRA - Directly opposed to the viewpoint that the NLRA should be strengthened is the belief that U.S. labor law should be deregulated—that is, completely repealed or discarded: "If deregulation in product markets can foster price competition and increase productivity, jobs, and the array of new products and services, why not in [labor] markets too? There are no real intellectual obstacles. It's mostly a matter of superstitions that free labor markets are "different" and exploitative, combined with the familiar tyranny of an entrenched status quo. . . . Whether judged by the criteria of justice, liberty, equality of income, social conflict, or general productivity, the special-interest legislation supporting adversarial unions and compelling employers to deal with them and forcing unwilling workers to be represented by them should be repealed.71" - This view is strongly rooted in neoliberal thinking and the closely related philosophy of libertarianism (described in Chapter 5). Recall from Chapter 2 that neoliberalism emphasizes free-market transactions because of the belief that perfect competition maximizes efficiency and aggregate welfare. Monopolies, laws, and other barriers to competition are bad. From this perspective, unions are labor market monopolies that cause harmful economic effects by using strikes to raise wages higher than the competitive market rate.72 As such, the NLRA reduces aggregate welfare by protecting monopoly unions, forcing unwilling employers to bargain with them, and in some situations making unwilling employees pay union dues. - Rather than strengthening the NLRA, therefore, others support its repeal.73 Consistent with neoliberal thought, unions should not be protected by any special legislation. Rather, they should be subject to the same antitrust (antimonopoly) regulations that limit other business organizations from engaging in anticompetitive practices. At the same time, consistent with the libertarian emphasis on individual freedom and liberty, advocates of deregulation generally do not push for legal restrictions on unions beyond antitrust regulations. As long as individuals and unions abide by the common law principles that outlaw fraud, violence, and threats, individuals should be free to voluntarily form unions—but not with explicit legal protections. If an employer feels that bargaining with a union is in its best interests, that employer should be free to voluntarily bargain. But the law should not compel action because this interferes with free markets and encroaches on individual freedoms. Thus in this viewpoint, the NLRA should be deregulated. - Note that advocates of deregulating labor law interpret the long-standing decline in U.S. union density quite differently than those who support strengthening the NLRA. Whereas the latter group believes that managerial exploitation of NLRA weaknesses is responsible for this decline, deregulation proponents feel that this decline stems from a reduced need and desire for unions among workers. In other words, there has been a decline in the demand for unions.74 In this view, competitive labor markets force employers to respond to employee needs and to treat them well through human resource management policies. As such, workers are seen as preferring a system of individual rather than collective representation.75 And if the decline in union density is voluntary (rather than forced by management suppression), there is no need to strengthen the NLRA. In fact, if unions are only monopolies that interfere with competitive markets, then labor law should be deregulated by repealing the NLRA. Loosening the NLRA - Between two arguments for strengthening or deregulating the NLRA is a compromise position: loosening the NLRA. This view focuses on the NLRA's section 8(a)(2) restriction on company-dominated labor organizations. Recall from Chapter 10 that the NLRA defines labor organizations quite broadly and can include labor-management committees as well as formal unions. In some instances, therefore, workplace committees have been ruled illegal—most notably in the Electromation case. To some, these rulings demonstrate that the NLRA needs to be loosened to allow legitimate employee participation mechanisms to give workers a voice and promote cooperation and competitiveness.76 In other words, labor law is viewed as partially obsolete and no longer in tune with the realities of global competition and flexibility. The most concrete example of a proposal to loosen the NLRA was the proposed TEAM Act. Although it was never enacted, the TEAM Act sought to modify Section 8(a)(2) to allow labor-management committees that do not seek to negotiate collective bargaining agreements. Another observer has argued for the complete repeal of section 8(a)(2) as a signal that "the U.S. is hospitable, not hostile, to labor innovation and experimentation."77 Another possibility is to modify the NLRA to allow for employee committees that monitor employer compliance with employment laws, as is already the case for health and safety committees in numerous states. This would be consistent with trends toward increased corporate self-regulation and self-monitoring, though outside support through an independent monitoring organization might be needed to make these committees effective. If successful, this could provide employees with a platform for participating in employment law compliance tailored to the needs of each workplace; in many companies, this might also grow into a greater voice in shaping broader codes of conduct. Encouragement of these committees could come from providing employers with partial immunity from legal penalties when their compliance program includes effective committees, and from making the establishment of these committees part of a remediation program for employment law violators.78 This is another example of a labor law reform proposal that would update the NLRA to be more consistent with contemporary trends and would ideally create benefits for employees and employers. Transforming the NLRA - The fourth possible direction for U.S. labor law is to transform the NLRA into something brand new for the 21st century by completely rewriting labor law. Proponents of this view believe that the New Deal industrial relations system performed admirably in the stable mass manufacturing era immediately following World War II, but that this framework no longer matches the global, competitive environment of the 21st century. Compared to strengthening or loosening the NLRA, the arguments for transforming the NLRA are based on the belief that the NLRA framework is obsolete—a complete overhaul is therefore necessary, and modifications will not suffice. Put differently, transformation proponents believe there is a mismatch between the assumptions of the New Deal industrial relations system and the world of work in the 21st century. This perspective shares the deregulation camp's desire to repeal the NLRA; but because of their pluralist industrial relations foundation, supporters of a transformation believe new institutions should be created to place checks and balances on free markets. In fact, the strengthening, loosening, and transforming platforms are all rooted in the industrial relations school of thought, but they differ on the form of employee representation that will best provide equity and voice in the environment of the 21st century—traditional unions, a combination of unions and nonunion representation plans, or new forms of unionism, respectively. Perhaps the primary basis cited for needing to transform the NLRA system into something completely different is adversarialism, which is a culture of conflict.79 In U.S. labor relations, adversarialism is typically equated to traditional distributive negotiations that revolve around a power struggle; every labor-management interaction is a contest of strength, and each side assumes the other is always trying to gain the upper hand. Adversarial U.S. labor relations might stem from inherent conflicts of interest in the employment relationship between labor and management rather than from specific NLRA provisions. But others believe that adversarialism is caused by specific features of U.S. labor law. To these critics, adversarialism is bad for unions and employees because it makes effective representation and job security more difficult to achieve in today's environment; business attacks adversarialism as inimical to developing the level of cooperation needed in a competitive environment.80 So from this perspective, the adversarial NLRA framework is harmful for both employees and employers in a global economy, and should be discarded and replaced with a completely transformed system. The NLRA is believed to create a culture of adversarial conflict primarily because of its reliance on exclusive representation and majority support. Because a union must garner the support of a majority of workers to have any workplace rights, the representation process becomes a battle for support between labor and management. To create support for a union, management is attacked as abusive, and an us-versus-them adversarial culture is established. This culture of conflict is perpetuated because existing unions must continue to maintain majority support or be decertified. It is also argued that the NLRA's sharp distinctions between labor and management reinforce an us-versus-them mentality. As a result, many proposals to transform U.S. labor law would replace or supplement exclusive representation and majority support with alternative arrangements. One option is to provide legal support for members-only unions; as noted earlier, these are unions that have the support of a minority rather than a majority of employees in a workplace. This legal support might include full collective bargaining rights for members-only bargaining in which contracts would apply only to members, not the entire bargaining unit. Technically the NLRA might not even need to be reformed because refusing to bargain with a nonmajority union might already be a section 8(a)(1) unfair labor practice (Chapter 4).81 But explicit legal reform to endorse members-only unions is probably necessary to make them a reality. Alternatively, a members-only union might be limited to consultation rights; in fact, this arrangement is already in use by U.S. federal government employees (see the accompanying "Labor Relations Application" box discussing consultation rights for federal employees). - A second option is to supplement or replace the certification process with works councils, as are widely found in Europe.82 The trigger to create a works council is typically significantly less than majority support, and might be quite low—perhaps just a handful of employees wanting a works council would suffice, or they could even be required in all workplaces. Employees would then elect their works councils' representatives from among existing employees; alternatively, workers could be allowed to vote for a variety of representatives—union or professional association leaders, consultants, coworkers, friends, and even managers—and the number of seats on the works council allocated to each type of agent would be proportional to the number of votes received.83 A works council is typically entitled to jointly determine certain issues and to have information and consultation rights with respect to other issues. In most proposals, U.S. works councils would lack the right to strike. The emphasis on joint determination and consultation, rather than bargaining and strikes, underscores the cooperative rather than adversarial aspect of works councils. And giving workers more influence over their work might increase their sense of legitimacy and justice, thereby increasing cooperation and productivity.84 Before anyone rejects these proposals too quickly, note that some states already require joint labor-management safety and health committees, and in 2013 Volkswagen said that it would welcome a works council at its Chattanooga, Tennessee, plant. Beyond reducing adversarialism, another significant benefit of these types of reforms is that they would make it easier for workers to experience some type of collective voice. As workers experience this directly in their own workplace, they can see its benefits, and push for stronger forms of involvement and representation. This might even lead to majority support for a traditional union with full-fledged bargaining rights. In this way, members-only bargaining and works councils can be seen as a form of "training wheels voice" where workers get to learn how it works and try it out before seeing if they want more.85 The challenges underlying the possible need to transform the NLRA apply to public sector labor law, too. Is exclusive representation too adversarial? Are there alternative voice mechanisms that would benefit public sector agencies and their employees? If a public bargaining law exists, is it functioning in desired ways or should it be reformed, and in what ways? And in the private and public sectors, the most effective transformation will overhaul both employment and labor law to integrate labor relations reform into the broader context of the changing employment relationship—such as the importance of emerging technologies, flexibility, diversity, work-family conflicts, the growth of contingent and on-demand employees, and an increased reliance on corporate self-regulation.86

As highlighted by recent events such as attempts to change public sector bargaining laws, the U.S. labor relations system is under fire from many angles and perspectives. Proponents of free markets and human resource management see unions as interfering with markets and managers. Advocates of employment relationship flexibility criticize union policies as restrictive barriers to competitiveness. Proponents of greater labor-management cooperation and employee involvement attack U.S. labor law as adversarial and overly restrictive. Globalization, financialization, and the need to create high-performance workplaces are placing great strains on the U.S. labor relations system (recall Chapters 10 and 11). The current state of U.S. labor relations is also sharply criticized by proponents of labor unions and workers' rights. U.S. labor law is seen as failing workers by not penalizing antiunion employers, banning secondary boycotts, allowing strikers to be replaced, excluding independent contractors, and creating fissured bargaining units in the fissured workplace. Labor activists further criticize the traditional business unionism approach of U.S. unions for failing to develop a vibrant labor movement based on grassroots participation. More generally, the Occupy and Fight for $15 movements have challenged economic inequality and criticized the power of corporations in society. To varying degrees, all these criticisms reflect frustration with the current state of efficiency, equity, and voice in the U.S. employment relationship.

Comparative examples from other countries show that there are many institutional arrangements and behaviors for seeking the common underlying goal of balancing efficiency, equity, and voice (Chapter 12). In other words, if the U.S. system no longer effectively serves its purposes, there are numerous alternatives. This chapter therefore builds on the preceding chapters to look toward the future. What should unions do in the 21st century? Labor unions have a variety of options such as becoming more militant or cooperative, or changing their structures and strategies. What should companies do? Companies, too, have a variety of options ranging from a continued short-term focus on shareholder returns to broader visions of the importance of embracing stakeholders and corporate responsibility, and there are analogous alternatives in the public sector. What should labor policy do? Labor law can be deregulated, strengthened, loosened, or rewritten from a clean slate to reflect a new environment and set of priorities. Putting these questions together yields the concluding subject for this book's investigation of labor relations: What should labor relations do?

WHAT SHOULD EMPLOYERS DO?

Earlier chapters have discussed a variety of labor relations strategies used by employers, and the pressures for change brought on by globalization, the need for flexible work practices, and other trends. Just as the previous section considered deeper questions about future directions for labor unions, in looking toward the future of labor relations, it is also important to consider deeper issues of corporate governance, corporate social responsibility, and public sector values. Maximizing Shareholder Value - An influential perspective on corporate social responsibility is that business's role in society is to make money: "The baseline answer to this important (and highly debated) question is to make a profit: Few trends could so thoroughly undermine the very foundations of our free society as the acceptance of corporate officials of a social responsibility other than making as much money for their stockholders as possible. . . . The view has been gaining widespread acceptance that corporate officials . . . have a "social responsibility" that goes beyond serving the interest of their stockholders. . . . This view shows a fundamental misconception of the character and nature of a free economy. In such an economy, there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase profits so long as it stays within the rules of the game, which is to say, engages in open and free competition, without deception or fraud.40" - This view is rooted in utilitarian and libertarianism ethical views (see Chapter 5), and forms the foundation for the U.S. approach to corporate governance: the shareholder value model (Chapter 11).41 From this perspective, shareholders are viewed as the key group in the corporation because they invest their money and bear the risk of making a profit or loss. As such, for both economic and legal reasons, shareholders are recognized as the owners of the corporation and managers have a primary legal obligation to act in the best interests of the shareholders.42 Maximizing shareholder value is therefore the primary mission of U.S. corporations. - The principle of maximizing shareholder value does not have to embrace a short-term perspective, but this has become the norm. In other words, in the United States, maximizing shareholder value has come to mean maximizing short-term stock prices.43 In this way, the shareholder value model of corporate governance has led to a corporate preoccupation with short-term financial results. This reinforces the broader pressures of financialization (Chapter 11), which then feeds back into reinforcing the focus on short-term financial results to the exclusion of other organizational needs. - As discussed in Chapter 11, shareholder value maximization and financialization have important consequences for employees and for labor relations because short-term financial gains are prioritized over longer-term investments, corporate cash is used to fund financial transactions rather than capital investment, employees are treated as labor costs, and employees and their unions are denied meaningful participation in corporate governance and decisions over investments, mergers, and other major business activities. In other words, the traditional business model of "retain and reinvest" earnings and profits has become a new model of "downsize and distribute" with adverse effects for employees.44 Corporate Social Responsibility: A Broader Alternative View - Critics therefore challenge what they see as a narrow view of corporate social responsibility and advocate for rethinking the accompanying short-term focus on shareholder value maximization (see Figure 13.2). There are ethical and legal arguments that can be made in support of a broader view of corporate social responsibility. In ethical terms, recall from Chapter 5 that the ethics of duty (in the tradition of Kant) and virtue (in the tradition of Aristotle) rejects a sole focus on outcomes (such as profit maximization) without regard for actions (such as how people are treated). The ethics of justice further gives weight to the fairness of economic outcomes. From these perspectives, business is viewed as a human activity; seeking profits through efficiency and competitiveness is important but must be balanced with respect for humanity and the corporation's role in society.45 From a legal perspective, it is argued that stockholders have important rights but that corporations are legally sanctioned by governments and thus shareholder rights are not unlimited. In particular, because of a perceived public interest, the law grants shareholders limited liability (if you own stock in a bankrupt company, creditors cannot take your house); in return, corporations must serve the public interest. In other words, corporations are viewed as social rather than purely private institutions.46 - From this perspective, corporate social responsibility is seen as encompassing broader concerns than short-term profit maximization. New societal norms for corporate behavior are therefore advocated. At the workplace level, it is argued that employee dignity in daily work requires new norms for management behavior that respect workers' interests and rights.47 In terms of human resources and industrial relations strategies, for example, high-performance work practices in which employees have decision-making authority can be used instead of confrontational methods of supervision; in union organizing drives, employers can choose a policy of neutrality instead of union suppression (Chapter 6). Similar arguments about the need to respect workers' interests and rights are made for policies and institutions at the national and international levels.48 The United Nations promotes a global compact with business in which corporations agree to voluntarily respect human labor and environmental concerns while in return, the United Nations promotes trade and open markets.49 The United Nations has also developed a model code of conduct for companies with respect to human rights based partly on the belief that corporate citizenship is good for business and partly on the foundation that "business enterprises have increased their power in the world . . . with power comes responsibility."50 Broad views of corporate social responsibility also include concerns for environmental sustainability and other issues. A Stakeholder Model of Corporate Governance - Perspectives that call for a broader conceptualization of corporate social responsibility are closely aligned with views that argue for replacing the shareholder model of corporate governance with a stakeholder model. The stakeholder model is rooted in a belief that all stakeholders—employees, customers, suppliers, local communities, and others in addition to shareholders or owners—are sufficiently affected by corporate actions to deserve consideration in corporate decision making.51 In other words, a corporation exists not just for the benefit of shareholders, and it should be operated to benefit all who have a stake in it. In its most extensive form, adopting the stakeholder model requires legal changes in corporate governance, especially mandated representatives of employees and other stakeholders on corporate boards of directors. This is the case in other countries such as Germany (Chapter 12).52 More commonly, supporters of a stakeholder approach in the United States advocate changing corporate and societal norms and stop short of calling for legal changes. - A stakeholder rather than shareholder approach to labor relations would represent a significant change from past U.S. experiences. High-performance work systems with extensive employee involvement would likely be more widespread (Chapter 10). Employers would probably maintain neutrality in union organizing drives (Chapter 6). Labor-management negotiations would likely have more of an integrative or win-win, problem-solving approach than a distributive and adversarial character (Chapter 7). Grievance resolution would probably be more flexible and informal (Chapter 9). Companies might be less likely to move production to different locations in response to union activity or modest labor cost differentials. Significantly more information would probably be shared with employees and their representatives, and employees would have a voice in strategic decisions. And unions might adopt less militant strategies and structures. - What are the prospects for moving from a shareholder to a stakeholder model of corporate governance? Periodic corporate or financial scandals raise public questions about the preoccupation with short-term financial results. But this has not yet prompted significant changes in the shareholder model or a weakening of financialization. Nevertheless, discussions of the future of U.S. labor relations should not overlook questions of corporate governance, responsibility, and business norms.53 Alternative Directions for the Public Sector - Similar tensions affect the public sector. Paralleling the private sector and public policy trends emphasizing free markets, financial incentives, and financial results since the 1980s, there has been a "New Public Management" movement to bring free market ideas and private-sector management tools to the public sector, such as decentralization, competition among service providers, privatization, outsourcing, and financial incentives. This puts strains on labor relations as unions seek to preserve wages, benefits, and jobs.54 The financial crisis in 2008 magnified these strains by creating greater budget deficits in the public sector. Under the banner of fiscal austerity, states with Republican governors tried, and in some cases succeeded (e.g., Wisconsin), limiting bargaining rights for public sector workers.55 Analogous to a continued emphasis on maximizing shareholder value in the private sector, this fiscal-first approach to government is one direction that public sector management can continue to take, with likely continued pressure on public sector workers and unions. - But some have criticized New Public Management and fiscal austerity for their narrow and short-run economic objectives, and instead advocate for approaches that take a broader view of the role of the public sector in promoting diverse public values—not just efficiency but also values related to democracy.56 This is similar in spirit to arguments for broadening the private sector emphasis from shareholders to stakeholders because both shifts prioritize a broader set of interests. Embracing a public values approach to public sector management would likely result in a different approach to labor relations—one in which workers and their representatives would not only be seen as partners in the delivery of effective public services but more generally as partners in helping to foster public values around fairness, inclusion, participation, and citizenship.57 So just as in the private sector, those responsible for shaping, leading, and paying for government services should be thinking about the values and norms that are desired, and the implications for strategy and practice.

STRATEGIC LABOR RELATIONS AND LEADERSHIP

The previous three sections have an institutional focus: In what directions should labor unions, employer behavior, and labor law move in the future? But questions of future directions for U.S. labor relations also involve individual-level issues for managers and union leaders. Insights from strategic management have been applied to human resource management, and they can be equally useful for management and labor practitioners in private and public sectors labor relations. Human resource managers can be seen as having three roles: builder, change partner, and navigator.87 The builder assembles the basic components of an organization's human resource management function in a coherent way—staffing, compensation, and the like. The change partner reshapes the human resource functions in response to changes in the external environment, often in partnership with others in the organization. Changing forms of pay and work organization for greater flexibility is a common example. Note that the builder is focused internally on making sure the pieces of the puzzle fit together while the change partner is focused externally on fitting organizational practices with the outside environment. In the third role, the navigator must continuously develop organizational competencies and performance by balancing these internal and external pressures. An effective organization has both flexibility and control, both change and stability, and responsiveness to both the demands of markets and the needs of employees. Each of these contrasts constitutes a duality—a tension that is best managed through balancing rather than choosing one option over the other (as might be the case if either internal or external fit is the sole focus).88 This three-part framework is useful for thinking about the roles of labor relations managers and union leaders (see Table 13.3). On the corporate side, managers must build labor relations functions that have high internal fit. Long-term contracts, formalized grievance handling, and adversarial negotiations served mass manufacturing modes of production in which stability and labor costs were important concerns. But as the environment has changed, labor relations managers as change agents must restructure the labor relations function to fit an external environment that demands flexibility and quality in both the private and public sectors. This is a major challenge for contemporary managers. But the third role is the most challenging: Managers must also navigate (or steer) the labor relations function so as to balance the competing internal and external concerns (dualities). It is often difficult to force flexibility onto unionized employees; rather, navigating means negotiating change and creating flexible systems that are also responsive to employee needs. This might require managing the paradox of making unions and employees feel more secure so that they can be more flexible. When making strategic and operational choices, managers should remember that their actions set the tone for the labor-management relationship and thereby help determine whether unionization will be good or bad for the bottom line.89 So managers should think about the kind of labor-management relationship they want to foster, and appreciate their own role in contributing to this. Union leaders face these same tasks in managing their own organizations.90 They must build union structures to fulfill the labor movement's basic functions, such as organizing, bargaining, contract administration, and political lobbying. These structures must be internally consistent; for example, the Justice for Janitors campaigns have emphasized organizing through intense rank-and-file activism, but after bargaining rights have been won, contract negotiations and administration have reverted to traditional methods without significant rank-and-file involvement to the frustration of the workers.91 These structures must also be consistent with the fact that unions are democratic organizations, and union leaders need to work hard to make sure that they do not become detached from the rank and file. At the same time, unions must build core self-management skills relating to budgeting, strategic planning, and benchmarking.92 Union leaders must also be change partners: They must partner with rank-and-file employees to construct new forms of representation that fit changes in the external environment, including greater workforce diversity, higher educational levels, and increased competitive pressures on their employers. The six alternative directions for unions discussed earlier in this chapter are all responses to the external environment. Finally, union leaders must be navigators to balance the dualities created by internal and external pressures. Important dualities in labor unions include the tension between organizing new members and servicing existing members, between providing guidance and letting workers handle matters, between centralized power and decentralized responsiveness to local conditions, between centralized control and democratic participation, and between solidarity across workplaces and concern for individual needs. This book can help make you a more effective private or public sector management or union leader by understanding the dualities that need to be navigated. By studying labor relations in a framework that recognizes multiple perspectives or schools of thought on the employment relationship, you can better understand others with whom you may interact in the workplace—managers, union leaders, employees, and government officials. Without needing to agree with all alternative viewpoints, this understanding will make you a better leader. Leadership issues were also discussed in Chapters 7 and 10 in the context of resistance to change and strategies for change in moving to integrative bargaining and to more flexible work systems. Finally, the ethical framework presented in this book has important ramifications for effective leadership (see the "Ethics in Action" case at the end of this chapter).