This record reviews 2002's main developments in industrial relations in the USA.
The economy of the USA grew at a relatively moderate pace in 2002, with real GDP growing 2.4% for the year. However, growth was much stronger than the 0.3% in 2001, reaching 5% and 4% respectively in the first and third quarters of 2002. The second and fourth quarters, however, saw growth of 1.3% and 1.4% respectively, suggesting a somewhat up-and-down recovery from the 2001 recession.
While 'technically' the USA had emerged from recession, a recessionary atmosphere clouded the economic landscape throughout the year and most employers, especially those involved in manufacturing, grappled with debt and excess capacity. Economic performance was also hindered by corporate accounting scandals, a lingering 'bear market' in stocks (the S&P 500 share index fell 23% in 2002) and an uncertain geopolitical situation as the USA prepared for war in Iraq. However, government spending - including a sharp rise in military outlays - accounted for roughly one quarter of GDP growth. The build-up for war therefore had a contradictory effect on the US economy in 2002, driving fresh economic activity in some sectors, but undermining business confidence as a whole.
Unemployment rose gradually as the year progressed, reaching a rate of 5.9% for the fourth quarter, up 0.3 percentage points from the same period in 2001. The number of unemployed people rose by 500,000 to 8.4 million, and the average duration of unemployment rose by 3.9 weeks to 17.9 weeks in the fourth quarter as job availability became progressively more scarce. Forecasters noted that the resumption of growth in 2002 had merely slowed down the increase in unemployment, and had not generated new jobs - similar to the 'jobless recovery' that followed the deeper recession of 1991.
Business spending improved over 2001’s levels, but remained weak for most of the year across nearly all sectors. Equipment and software expenditures rose only 3.0 percentage points - less than half the annual increases achieved during the 1990s (according to the Bureau of Labor Statistics Monthly Labor Review, February 2003) and industrial production of business equipment, a measure of business spending on manufactured goods, declined 2.5% over the year.
Contributing to the weak performance in manufacturing was the strong US dollar, which made US-produced goods relatively expensive. The communications sector was particularly sluggish, due in large part to earlier over-investment in fibre-optic networks and equipment. Civil aircraft production and the air travel industry as a whole declined sharply as a result of falling travel levels.
Consumer spending grew 2.5% in 2002, although the level dipped to 1.5% in the final quarter as sales of consumer durables ended the year with an 8.5% decline. A modest growth in real earnings kept spending up, although low interest rates (the Federal funds interest rate stood around 1.75%, lower than in 2001) and refinancing activity did help stimulate spending on 'big ticket' items. With mortgage rates at a 40-year low, 'housing starts' rose to a 15-year high, and rebates and zero-percent financing boosted auto sales.
At the beginning of 2002, President George W Bush enjoyed 80% support in opinion polls for his general performance and 83% support for the war in Afghanistan. Throughout 2002, support for the President on foreign policy stood above 70%. The President’s overall popularity helped the Republican Party win control of the Senate in the November elections while increasing its majority in the House of Representatives.
President Bush’s management of the US economy in 2002 was, however, the focus of critical attention throughout the year. In January, the Congressional Budget Office reported that the projected federal budget surplus had been wiped out by the President’s USD 1.3 trillion package of tax cuts (introduced in 2001, and to be phased in over 10 years), an increase in military spending, and a weak economy (see The FY2003 budget, Office of Management and Budget, and The budget and economic outlook, fiscal years 2003-2012, Congressional Budget Office). In early February, the President proposed a USD 2.1 trillion budget for 2002, which included a 15% increase in military spending (USD 48 billion), more money for 'homeland security' (USD 32 billion), and still more tax cuts (USD 591 billion). The vanishing USD 4 trillion federal budget surplus and the return of deficits would eventually bite into the President’s popularity, although not until well into 2003. Moreover, the spectacular collapse of Enron in December 2001, and the WorldCom accounting scandal that surfaced in April 2002, also took its toll on the administration. WorldCom, the world’s largest internet provider and the USA’s second largest long-distance telephone company, filed for bankruptcy in July.
In March, President Bush announced a plan for corporate accountability that laid out guidelines for better and timelier information for investors, accountability for corporate officers (CEOs, other officers, and boards), and strengthened auditor independence. Each house of Congress also passed its own version of reform.
The economic impact of the scandals proved to be considerable. Loss of confidence in US markets caused the dollar to fall to its lowest level in almost three years, slowing the flow of foreign investment. In late July, the Dow Jones Industrial Average registered three-figure losses for seven consecutive days, suffering its largest percentage decline since 1987. Realising that the free-fall in the markets was partly fueled by lack of investor confidence, the House and the Senate conferred and passed the Sarbanes Oxley Act, which was signed into law on 30 July 2002. The Act carries stiff criminal penalties for the kind of practices associated with Enron, WorldCom and other large corporations.
A number of legal developments and executive initiatives occurred in 2002 that affected the general industrial relations climate. Some of these were connected to the 'war on terrorism'; others - such as the commission set up in January to explore the privatisation of the postal service - were part of the Bush programme from the beginning of his term in January 2001.
Indeed, privatisation remained high on the administration’s agenda. Following the Republican victories in the mid-term Congressional elections, the Bush administration immediately announced plans to eliminate 850,000 federal jobs (127,500 by October 2003) and contract the work out to private companies. Proposed changes to the rules that govern contracting out were designed to give private companies the advantage over federal workers in the private-public competition process. Earlier, in June, President Bush signed an executive order that stripped the nation’s air traffic control system of its designation as an 'inherently governmental' operation, a move that seemed to open the door to privatisation.
In July, the Senate debated the creation of the new Homeland Security Department and Congress finally launched this new cabinet-level agency in late November. In a contentious move, President Bush urged Congress to give him the authority to create new policies on hiring, pay, collective bargaining, performance appraisal, discipline and dispute resolution for purposes of national security. Congressional Democrats echoed the concerns of public sector trade union leaders that the proposals to change standard federal personnel rules would hurt the new agency’s 170,000 employees (drawn from 22 pre-existing government departments) and would constitute a serious attack on their collective bargaining rights. The new law creating the Department instructed its top officials to consult with employee organisations before making changes to civil service rules.
The government’s involvement in collective bargaining took an unprecedented turn in 2002. The expiry of the Pacific Coast Longshore contract (collective agreement) led to the 10,500 members of the International Longshore and Warehouse Union (ILWU) working without an agreement until September 2002 with no new negotiations pending. The Pacific Maritime Association (PMA) employers' body, having accused the union of working a 'slowdown', then locked out the ILWU members. The PMA worked with the large 'box' retailers (Wal-Mart, Home Depot, etc) whose shipments would be affected to call for injunctive relief from the federal government, a move that could have led to punitive damages being leveled against the union. Only the importers could make such a demand, because the PMA could not petition the government to end a lock-out that it had itself instigated. The strategy was designed to weaken or completely break the ILWU’s presence in the Pacific Coast’s 29 ports that together handle 45% of the US’s water-borne commerce.
In October, retailers pressed the Bush administration to invoke the 1947 Taft-Hartley Act to intervene in the lock-out. The President secured a court order on 8 October ordering the PMA temporarily to end its lock-out and ordering work to resume without a contract. The administration's legal brief maintained that all commercial cargo, and not just specifically goods intended for military use abroad, could be considered important to the military. Any stoppage at the docks, therefore, was a threat to national security.
The court later continued the injunction as an 80-day cooling-off period (with work to continue during this time) under the Taft-Hartley Act’s National Emergency Procedure. From the beginning of the contract negotiations between the ILWU and the PMA, President Bush stated his intention to use federal power to intervene in the talks. This was the first time that the Taft-Hartley Act had been used since 1971 and the first time ever in a lock-out. A tentative agreement between the union and the PMA was reached at the end of the cooling-off period in late December. The closely-watched dispute ended with the union accepting many of the PMA’s proposals related to the control (not the introduction) of new technology, especially on tracking container movement that uses scanners and other computer-aided devices. However, the six-year agreement preserved health benefits and increased pension benefits for PMA employees. The ILWU claims that the PMA’s goal of pushing the federal government to inflict punitive damages on the union backfired when the head of the Defense Department, Tom Ridge, pressured the PMA to accept the ILWU’s proposed concessions on certain issues. Union sources maintain that the administration did not want a high-visibility industrial dispute going on during a time of preparation for war.
Perhaps the most significant employment-related Supreme Court decision of 2002 came in March, when the Court decided a case called Hoffman Plastic Compounds v NLRB. In the Hoffman case, the Court held that a worker who is 'undocumented' could not recover the remedy of back pay under the National Labor Relations Act. The case involved an undocumented (illegal) immigrant factory worker in California who was dismissed along with other co-workers for union organising - a normally clear violation of the National Labor Relations Act. The National Labor Relations Board (NLRB) ordered the employer to cease and desist and to post news of the fact that it had violated the law. It also ordered that the employee be reinstated and given back pay for the time he was not working. The NLRB’s decision was upheld by the DC Circuit Court of Appeals. The employer appealed to the Supreme Court which then ruled that undocumented workers cannot receive back pay under the NLRA.
The Hoffman case triggered a sharp reaction from unions and immigrant rights groups. Did the decision mean that the millions of undocumented immigrant workers in the USA were no longer 'employees' who enjoyed the protection of the NLRA? In July, the NLRB’s General Council reaffirmed that undocumented workers are covered by the NLRA; however the Supreme Court’s decision now makes it unlikely that 'compensation for time not worked' (back pay) will be available to undocumented workers under other anti-discrimination laws (see National Employment Law Project, October 2002)
Under the 1935 federal National Labor Relations Act (NLRA, or Wagner Act), workers in the USA gained the right to bargain collectively over wages, hours and other terms and conditions with their employers. The NLRA, along with other federal, state, and local statutes, extends bargaining rights to 78% of US workers. Many of the remaining 22% of workers without bargaining rights are supervisors, managers and independent contractors. However, public sector workers in 12 states also have no bargaining rights, and domestic workers and roughly 300,000 agricultural workers are similarly excluded (see Collective bargaining rights: information on the number of workers with or without bargaining rights , General Accounting Office, 13 September 2002, GAO-02-835).
Employers continue to pursue many and varied means to resist trade union efforts to organise new workplaces. This has been the norm since the onset of 'concessions bargaining' after the near bankruptcy of Chrysler in 1979, and the arrest of the leaders of the air-traffic controllers union ( Professional Air Traffic Controllers Organization , PATCO) in 1981. These two events signaled the onset of a new era for industrial relations in the USA, an era when both government and employers appeared to share a desire to reduce greatly ( 'rollback' ) union influence in the workplace and in politics. Taking advantage of the anti-union political climate, even profitable corporations sought concessions at the bargaining table, and unions were pushed into a reactive, defensive mode for two decades.
The phasing out of government regulation of key sectors has been another process of major significance, as has the general restructuring of the economy which saw the rise of new industries with little or no tradition of unionisation, bargaining, or even formalised work rules, practices or procedures.
Post-war 'pattern bargaining' arrangements, moreover, have largely unravelled over the last 25 years as multi-employer 'master' agreements covering trucking, basic steel, tyres, airlines, coal mining etc collapsed under the weight of deregulatory and concessionary pressures. The negotiation of local pay and/or work rule concessions was a key factor in the conscious dismantling of stable pattern arrangements and company-level bargaining. (see 'Autos: continuity and change in collective bargaining' , Harry C Katz, John Paul MacDuffie and Frits K Pil, in Collective bargaining in the private sector , Paul Clark, John Delaney and Ann Frost (eds), IRRA and ILR Press, an imprint of Cornell University Press, 2002, and 'Recent developments in US collective bargaining and employment practices' , Harry C Katz, TRANSFER 3, Autumn 2001). Unions faced with the deregulation and the dismantling of pattern bargaining now have to negotiate and administer multiple contracts instead of one, a burden that is not always widely recognised.
Collective bargaining in the USA has generally receded in terms of its overall economic weight and significance, and has become far more decentralised. Within the realm of negotiated union-employer agreements, the locus of bargaining has over time shifted first from multi-employer pattern bargaining to the company level, and then from the company level to the individual worksite. In key sectors of the economy, such as finance, collective bargaining rarely occurs.
Today there exists a wide variation in employment practices and systems, with a noticeable growth in the low-wage service sector where employers hire and fire 'at will.' The enormous growth in this sector (by 14.2 million jobs between 1979-89) slowed during the 1990s, but low-paying service-sector jobs, primarily in retail, health, and temporary services, accounted for 72.9% of all new jobs created during the 1989-2000 period (see The state of working america, 2002-2003 , Lawrence Mishel, Jared Bernstein and Heather Boushey, Economic Policy Institute, Cornell University Press, January 2003).
The relatively tight labour market of the late 1990s helped unions (temporarily) regain some muscle at the bargaining table, with the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America ( UAW ) settlement with the 'big three' automobile producers - DaimlerChrysler , Ford and General Motors - being hailed as relatively favourable to the union, with the UAW preserving its cost-of-living adjustment and gaining a moratorium on plant closures. Public sector unions, too, regained some of losses in pay and benefits sustained during periodic state and municipal budget crises in the 1980s and early 1990s. However, the end of the 1990s boom, and the return of large deficits at the state and local level, saw the return of an altogether different collective bargaining situation in 2002 and 2003.
Healthcare has emerged as the most contentious bargaining issue of late. In contrast to most advanced economies, health insurance in the USA is tied to employment. In unionised sectors, health is 'bargainable' ; in non-union sectors, health coverage is a benefit linked to the job. However, employers are not legally bound to provide health coverage, and as costs have increased employers have been under pressure to reduce coverage and/or to pass a larger portion of the costs on to employees either via the bargaining table or, in non-union workplaces, as a fait accompli (see below under 'Benefits: health and pensions' )
Employers, overall, entered 2002 generally confident that a weak economy and still rising unemployment would strengthen their position at the bargaining table. Some 31% of employers surveyed by the Bureau of National Affairs ( BNA ) felt very confident that they would achieve their 2002 bargaining objectives, and 65% felt fairly confident. Only 4% were not very confident of achieving their objectives.
Negotiated wage increases averaged 3.9% in 2002, unchanged from 2001 (according to BNA statistics). Almost half (49%) of all private sector contracts (collective agreements) negotiated in 2002 provided for first-year raises of 2%-4%, while 34% of contracts provided for increases of more than 4% and the remainder - 17% - for increases of 0%-2%. Reflecting the strength in construction, first-year contracts in this sector secured a 4.5% average increase, according to the Construction Labor Research Council (CLRC). With 2002 increases, union members took their usual median weekly earnings to USD 740, compared with a median of USD 587 for wage and salary workers who were not represented by unions. Analysts continue to draw attention to the difference in union and non-union weekly earnings (see How unions help all Workers, Economic Policy Institute, August 2003).
The median weekly earnings of full-time wage and salary workers were USD 610 in 2002, up 2.2% on the previous year, according to the Bureau of Labor Statistics (BLS). This growth in earnings was slightly higher than the 1.6% rise in consumer prices. However, earnings gains were smaller in 2002 than in 2001, and the BNA’s Wage Trend Indicator showed a general deceleration of private sector wage increases over eight consecutive quarters from 2000. Weekly earnings for black workers trailed those of white workers by USD 128 (USD 499 and USD 627 respectively) and median weekly earnings for Hispanic workers stood at USD 424 (BLS Monthly Labor Review, Feb 2003).
Later data from the Census Bureau (26 September 2003), however, present a more negative incomes picture for 2002. Median household income for 2002 fell 1.1% after adjusting for inflation, to USD 42,400. This decline represents a loss of USD 491 (in 2002 dollars) in income for these households in 2002 and USD 1,439 over 2001-2 (a 3.3% fall). Income fell for black people by 2.5%-3.0%, for Asian people by 4.0%-4.5%, and for Hispanic people by 2.9%.
These data also point to growing poverty in the USA as the result of the 2001 recession and the weak recovery in 2002, with black people and other minorities particularly affected. The official poverty rate rose from 11.7% in 2001 to 12.1% in 2002. The number of people in poverty increased by 1.7 million, to 34.6 million in 2002. Poverty levels for black people reached 24% in 2002, compared with 22% for Hispanic people, 10% for Asian people, and 8% for non-Hispanic white people.
In 2002, the annual poverty threshold stood at USD 18,392 for a family of four and at USD 14,348 for a family of three. Among the regions, the South continues to have the highest poverty rate.
Median weekly earnings for women grew 3.9% in 2002, much faster than the 1.9% increase for men, thus continuing a slow but steady trend towards wage parity between the genders. The ratio between men's and women's earnings has narrowed by more than 14 percentage points since 1970, and women’s average wages are now 76.5% of men’s (according to BLS statistics). Census Bureau figures put the ratio of female-to-male earnings for full-time, year-round workers at 77%, an all-time high. Women in this group have not experienced an annual decline in earnings since 1995. Leading this trend are the more highly educated women from 'Generation X' (ages 25-34). In 2000, women in this age group earned on average 82 cents for every dollar earned by men, up from 68 cents in 1979.
According to the American Federation of Labor and Congress of Industrial Organisations (AFL-CIO), however, the narrowing female-male wage gap accompanies a trend for adult women to work longer hours. As of May 2002, 66% of working mothers worked 40 hours a week, compared with 60% of women without children (according to the AFL-CIO Working Women Survey, May 2002).
While the union/non-union pay differential is large, the differential is even larger for benefits. This differential is particularly true with regard to health coverage (see above). For the working age population and its children, adequate health coverage is still largely contingent upon employment, and unionised workers are up to 28% more likely to have employer-provided health insurance than those not covered by a collective agreement. In fact, 38% of all companies surveyed in 2001-2 said that they offered no health coverage. These companies tend to be those with fewer than 200 workers.
Health insurance was probably the most contentious bargaining issue in 2002. Recent bargaining over health has taken place against a background of spiralling costs and a sharp jump in the number of US residents without health insurance. Census Bureau figures released in September 2003 put the number of uninsured people at 43.6 million for 2002 (15.2% of the population), up from 41.2 million (14.6% of the population) in 2001 - the largest annual increase in a decade. In 2002, almost half the uninsured - 20 million - were working full time.
The increase in health costs and the competitive advantage enjoyed by companies not offering coverage to their employees motivated a large segment of employers to seek cost-shifting and health coverage reductions at the bargaining table. Two reports released in September 2002 by the Kaiser Family Foundation and the Health Research and Educational Trust (HRET) pointed to the largest annual increase in premiums for job-based coverage since 1990, along with increases in deductibles and cuts in benefits. All told, premiums rose 14% in 2002, the third year in a row of double-digit increases. Premiums for family coverage in 2002 averaged approximately USD 9,000 per annum.
In 2002, 42% of employers went to the bargaining table hoping to gain larger contributions from employees for health insurance co-payments, deductibles or premium contributions, according to a BNA survey ( '2003 employee bargaining objectives' , Labor Relations Week , BNA, 23 January 2003). Employers have been generally successful in shifting some of the increases in healthcare costs onto their employees. For family coverage, the employee’s share averaged USD 2,084 in 2002, up USD 283 from 2001. However, costs are rising so steeply that employer efforts to shift the burden, even if successful, are unlikely to relieve the pressure on companies for long.
Retiree health benefits have been particularly vulnerable. In 1988, some 66% of employers provided health benefits for their retirees. In 2001, this figure had slumped to 34%, with a 9% drop in 2001 and 2002 alone. The announcement (in February 2003) by Bethlehem Steel Corporation that it would terminate healthcare and life insurance benefits for 95,000 retired workers and their dependents because it could no longer afford to pay the coverage gave visibility to the growing crisis. Moreover, the decision by General Electric to shift some of its rising health coverage costs onto its trade unions - five months before collective bargaining was scheduled to begin - triggered a two-day strike in January 2003. As Forbes.com commented, '(E)mployers will face increasingly high health insurance costs and, as a result, they’ll have to pass these costs increasingly on to their employees. Expect to see more wars between US workers and corporations over health insurance in the coming year' ( GE strike sounds health care alarm , Forbes.com, 14 January 2003).
There are signs that healthcare reform might again become an issue in the presidential elections of 2004, just as it was in 1991-2 prior to the election of Bill Clinton. A nascent political alliance between companies and unions is already visible in outline, as both sides of the bargaining table come to realise that the problem of spiraling costs needs to be addressed politically. This may eventually result in unions and employers lining up against the 'medical industrial complex' of private insurance companies, the pharmaceutical industry and the large private hospitals.
The length of the average working week in private industry increased in 2002 by 0.1 hour. This is the first time that the average working week had risen since reaching a high in 1997 (according to BLS figures). While the increase in 2002 was itself quite negligible, the long-term trend continues to point in the direction of families spending more time at work. Hours of work per worker have increased on average by 1.6% per year over the past two business cycles (according to Mishel et al cited above, based on BLS data). According to data from the Organisation for Economic Cooperation and Development (OECD), in 2002 workers in the USA worked an average of 1,815 hours per year, compared with 1,707 in the UK, 1,580 in Sweden, and 1,459 in France. In 1999, the International Labour Organisation (ILO) reported that annual working hours had risen 4% since 1980 (cited in Time after time: mandatory overtime in the US economy , EPI, January 2002).
The high number of annual hours in the US reflects the comparatively low number of average paid holidays, days of paid vacation and paid sick leave. As is well known, workers in the USA enjoy fewer such days than workers in most advanced economies ( TN0212101F ).
Most of the overall increase in working hours is attributable to working wives entering the labour market and working more weeks per year and more hours per week (see Mishel et al cited above). OECD figures for female labour market participation in 2000 put the USA at the top of the list of the most economically advanced countries, with 57.7% of working age women in the labour force. For men, the figure stood at 71.8%, second only to Japan’s 72.5%.
The recent rise in levels of unemployment and under-employment has drawn attention to the fact that there are millions of workers - 4.6 million in early 2003 - in part-time positions who seek full-time work (according to EPI, July 2003). This highlights the fact that many workers are working long hours at a time when other workers are seeking to work more hours. There were also 470,000 'discouraged workers' (people who sought work within the past year but have given up due to lack of prospects), and another, larger group - just below 1 million - who face some barrier between them and the labour force, such as childcare or transportation constraints (mid-2003 data from EPI).
It is fairly well known that the notion of 'social partnership' as normally understood in an industrial relations context does not apply to the reality of the USA. While business and government work very closely together, relations between trade unions and employers, and between unions and government, have been generally adversarial for more than two decades. It is true that in more than a few instances unions and employers have forged working partnerships and alliances both in the workplace (the partnership between General Motors and the UAW over the former's new Saturn subsidiary being the best known example) and around broader issues, such as trade protection. However, union-instigated efforts to build partnerships in the workplace or at the societal level have been consistently rebuffed.
There is presently no warmth between the federal government and the labour movement, although certain unions - such as the United Brotherhood of Carpenters (UBC) and International Brotherhood of Teamsters (IBT) - have had a better than anticipated relationship with the Bush administration, especially during its first year. An incident in February 2003 largely sums up the state of the relationship between labour and the Bush administration, when the Secretary of Labor, Elaine Chao, appeared before the annual winter meeting of executive council of the AFL-CIO trade union federation. Normally a courtesy visit, her 30-minute presentation provoked a bitter outburst from the AFL-CIO president, John Sweeney. Mr Sweeney told the press, 'She was insulting at points … In all my years, I have never seen a secretary of labor who's so anti-labour.' Apparently Ms Chao read out a list of union leaders facing charges for corruption and was generally confrontational. Voices in the more conservative press, however, praised the Secretary for standing up to 'union bosses'.
The recent wave of Republican victories for state governorships has further marginalised organised labour at the state level, although in many states trade unions remain a serious political force and labour has generally grown more effective in presenting its agenda and mobilising its base - even if the results continue to be meagre in many instances.
It is generally not possible to talk of employers' organisations, in the sense understood in most other advanced economies, in the USA. There is no national employers' body with an industrial relations role (though a special organisation has been created to allow US employers to be represented by a single body in international organisations and fora - the United States Council for International Business , USCIB ). Major business organisations (see below) do not deal with trade unions, and there are few national sectoral employers' bodies with any bargaining role. The discussion below thus deals with the general representation of business interests.
The political organisation of the business community in the USA has become the subject of considerable debate in recent years. The existence of a special relationship of large corporations such as Bechtel and Halliburton with the Bush administration was widely perceived long before these same corporations won contracts as part of the reconstruction effort in Iraq, and the administration makes no secret of its enthusiasm for initiatives that involve government partnerships with major companies.
The close relationship between government and business dates back to the birth of the Republic, and became particularly solid after the Civil War with the rise of the modern industrial corporation. This history notwithstanding, it remains an open question whether or not the federal government’s relationship with large corporations has now evolved into something particularly unprecedented or qualitatively different from times past. For some the answer is a clear yes; others say no.
It is, however, widely recognised that during the last three decades employers have become much more organised in terms of policy development and in their ability to shape public opinion and discourse over workplace issues and economic life in general. In the early 1970s, executive officers from large companies formed groups like the 200-member Business Roundtable , and traditional employer organisations such as the century-old National Association of Manufacturers ( NAM ) and the US Chamber of Commerce also became more visible. The older organisations, however, had tended to represent the interests of all sectors of business, including small companies perhaps more concerned with local and regional business conditions - and were thus less suited to pursue the kind of focused agenda that reflected the emerging needs of large and increasingly global companies. New business organisations were needed.
This growing employer assertiveness in the 1970s was, in the view of commentators, driven by the several factors, most notably the gradual loss of US competitiveness, the general crisis of 'Keynesian' consensus arrangements, and the economic uncertainty triggered by the end of the postwar expansion and the 'oil shock' of 1973-4. This assertiveness began to show results when, in 1977, with Democrats controlling the White House and both houses of Congress, business groups successfully united around an effort to stop a union-led campaign to reform prevailing labour and wage laws. Business also closed ranks around a broad agenda designed to: promote the deregulation of transportation, energy and finance; generally reduce public spending; and restructure the tax system in ways thought to encourage investment and improve profitability. This agenda began to become government policy during the latter phase of the Carter administration and was the heart of the Reagan economic programme in the 1980s.
The spectacular growth of corporate political action committees (PACs) is another feature of increased business organisation. The PACs are the mechanism by which employers (and unions) give money to political campaigns. In 1974 there was just 79 such corporate PACs; by 1982 there were 1,467. The PACs also sought to increase business influence over both major parties. In 1984, corporate PACs gave USD 23.6 million to Republican congressional candidates and USD 20.7 million to Democratic candidates, outspending union PACs by roughly four-to-one.
The total number of political fundraising dollars exceeded USD 1.6 billion in 2000, fueled in part by an almost 10-fold increase in 'soft' money contributions (unlimited campaign contributions to political parties), or roughly 40% of all dollars raised. An estimated USD 400 million was spent in the 2002 congressional races. While the labour movement continues to be an important contributor, business continues to outspend labour by a very wide margin (see Who’s paying for this election? , Center for Responsive Politics , October 2002).
The proliferation of corporate public relations or public affairs offices is also noteworthy. In 1970, only a handful of Fortune 500 companies had such offices; by 1980 over 80% did. The work of these offices in shaping public opinion on major issues has been well documented. The 1993 public debate over the North American Free Trade Agreement ( NAFTA ) revealed both the breadth and extent of business organisation. The Business Roundtable both led and coordinated the political campaign that led to the passing of NAFTA in Congress, and almost all of its members had access to the NAFTA negotiation process by serving on advisory committees established by the US Trade Representative.
Finally, think-tanks and other bodies sympathetic to business and, specifically, free market principles and policies, have also played an increasingly significant role in US society over the last 20 years or so. Three of the four 'think-tanks' most cited in the media are The Cato Institute , the Heritage Foundation , and the American Enterprise Institute - all decidedly pro-market and anti-union in their orientation. A discussion on the impact of these is beyond the scope of this report. However, it is important to note that at the level of ideas, including policy formation and ability to influence public perceptions, key business sectors in the USA are probably better organised now than at any time in history - and generally more willing to resist unions and consensus arrangements in the workplace than at any time since the end of the Second World War.
The labour movement in the USA finds itself at a critical juncture. Falling overall density and a weak presence (if any) in new industries suggest that efforts over recent years to revitalise the unions have not been successful. In 2002, industrial unions suffered heavy losses due to the recession and its aftermath. Among those hardest hit were: the United Steelworkers of America ( USWA ), which lost 50,000 members; the International Association of Machinists and Aerospace Workers ( IAM ), which lost 44,000; and the UAW, which lost more than 40,000. To make matters worse for the unions, labour’s biggest organising campaign for many years ended in defeat. In January 2002, a four-year effort waged by the Association of Flight Attendants ( AFA ) to organise 19,000 attendants at Delta Airlines ended when 5,609 voted for the union, 98% of the ballots cast. However, under the Railway Labor Act, non-voters are counted as 'no' votes, thus the union fell well short of the 50% 1 threshold required for victory.
By the end of 2002, union density had slipped to 13.2% of wage and salary workers, down from 13.4% in 2001. In 1983, union density had stood at 20.1%. While the number of workers in unions fell to 16.1 million (from 16.3 million in 2001), an additional 1.7 million workers were organised in a 'union-typical' manner, such as members of certain employee associations. This number also includes those who report no union affiliation but whose jobs are covered by a union or an employee association contract. Therefore the number of workers represented at the bargaining table stood at 17.8 million, or 14.6% of the total (according to the BLS Union Members Summary , 25 February 2003).
The variation in union density across sectors remains quite striking; local government workers (which includes teachers, police officers and firefighters) are heavily unionised - at 42.8% - while in the 'FIRE' sector (finance, insurance, and real estate) only 1.9% are in unions. The number of public sector workers covered by a collective agreement has held steady since 1983 and stood at 37.5% in 2002, more than four times the 8.5% level in the private sector.
Within this bleak picture, however, there are signs that indicate that unions might do better in future. For example, unions are winning a higher percentage of recognition elections than was previously the case. Under the NLRA, a union seeking to organise an anticipated bargaining unit must get 30% of the employees to sign a card requesting union recognition. The employer can then agree to recognise a union (which almost never occurs) or to deny it (which it almost invariably does), resulting in an election. The union normally seeks to gather cards from a minimum of 80% of the anticipated bargaining unit before it requests an NLRB election, largely because in the period leading to the election itself employers do whatever they can to persuade employees to reject the union (see below). Unions contested 2,587 NLRB elections in 2002, and won 1,445 of them, up from 1,353 wins in 2001. This was the seventh consecutive annual increase. In 1991, unions won 46.8% of NLRB elections; in 2002 unions won 56%. Union victories were particularly common (62%) in workplaces with 50 or fewer workers, while the success rate in larger units fell to just 30% (according to September 2003 BLS figures).
These NLRB election figures appear consistent with the picture emerging from opinion poll data in recent years that indicate a growth in union popularity. In an August 2002 AFL-CIO-commissioned poll of unorganised workers, 53% said that they would either 'definitely' or 'probably' join a union if the opportunity presented itself, a proportion that would add almost 42 million workers to union ranks (data from Peter Hart Research Associates - see also Business Week, October 28, 2002 ).
The AFL-CIO has also taken an unprecedented turn towards immigrant workers, thus opening up the possibility of more immigrants joining unions in larger numbers in the coming years. Immigration to the USA, both legal and illegal, rose sharply in the 1990s. Normally cool towards immigrants out of fear of labour market competition, many unions now regard an alliance with immigrants around civil and workers' rights issues as a potentially critical dimension of labour’s revival. At a meeting of the AFL-CIO’s executive council in August 2002, labour leaders resolved to organise a national mobilisation of immigrant workers in 2003.
Discussion on workers' rights has extended beyond immigrant workers, however. One frequently cited reason for union decline is aggressive (and illegal) employer opposition to unions and employee fear of reprisal. A September 2000 report published by Human Rights Watch , one of the world’s leading human rights organisations, stated that in 1999 alone, there had been 23,000 illegal reprisals against employees attempting to exercise their right to freedom of association, the vast majority of which went unpunished ( Unfair advantage: workers’ freedom of association in the United States under international human rights standards , Human Rights Watch, September 2000). The report concluded that workers in the USA lack the most fundamental internationally recognised rights at the workplace - the basic freedom to organise, bargain and strike. This was the first time that an international human rights organisation had examined freedom of association in the USA.
Other studies have pointed to the routine dismissal of workers with union sympathies, the non-enforcement of existing laws designed to protect workers, and employer threats to shut down operations if employees vote to be represented by a union. Indeed, unions are profoundly dissatisfied with the lack of effective legal protection for workers who seek to organise a union or who engage in industrial action. The NLRB framework has, in union circles, lost credibility, and a growing number of unions are now attempting to organise 'outside of the NLRB' . This normally involves attempting to convince an overwhelming majority of workers to sign cards requesting union representation, and to use that support - often expressed in 'job actions' , publicity initiatives etc - as a means of gaining 'voluntary recognition' from the employer, thus bypassing the NLRB altogether. This, essentially, was the way unions organised before the NLRB was established in the 1930s, and how Canadian unions organise today.
In politics, US unions continue to be effective. In the 2000 elections, voters from 'union households' accounted for 26% of the total, compared with only 19% in 1996. In 2000, 4.8 million more union households voted than in 1992, while labour’s campaign to elect 2,000 union members to office that year exceeded its goal by 500. The labour movement is presently doing a much better job than previously at convincing union members to vote for labour-endorsed candidates (normally Democrats).
While these developments have positive implications or possibilities for labour, they have not dispelled anxieties about the future of trade unionism in the USA. Indeed, within the AFL-CIO, leading figures have turned their attention to the structure and functioning of unions, and see union revival as contingent upon a radical internal reorganisation. Advocates of the change maintain that many of the federation’s 66 affiliated unions are too small to organise new members on any significant level. Just 15 of the 66 affiliates account for 10 million of the 13 million members linked to the AFL-CIO. In 2002, proposals were being discussed to consolidate union membership into 10-15 large unions that would each focus on specific sectors, industries and labour markets (see Three steps to reorganizing and rebuilding the labor movement , Stephen Lerner, in Labor Notes , December 2002).
Several major unions subsequently endorsed the consolidation proposal in mid-2003. The initiative, called the New Unity Partnership (NUP), focuses on organising strategies and centralising the governing bodies inside the AFL-CIO. Business Week described the NUP as a 'mini labour federation,' designed by and composed of the Service Employees International Union ( SEIU ), the Hotel Employees and Restaurant Employees International Union ( HERE ), the Union of Needletrades, Industrial and Textile Employees ( UNITE ), the Laborers' International Union of North America ( LIUNA ) and the United Brotherhood of Carpenters (UBC). At this juncture, it is not clear if the NUP will gain the kind of political support within the AFL-CIO needed to make it a reality - especially given the fact that leaders of the many small unions may not appreciate being subsumed or disbanded by their larger counterparts. It is possible that the NUP’s sponsors, if obstructed, could take unilateral action and set up a new rival federation, thus splitting the US labour movement for the first time since the AFL-CIO merger in 1955.
Trade unions were engaged in only 19 major work stoppages in 2002 - a historic low. The number of workers 'idled', the number of days of idleness, and the percent of estimated working time lost because of strikes and lockouts were also lower in 2002 than at any time since records began in 1947. Just 46,000 workers were involved in industrial action, resulting in 660,000 working days of idleness (less than 1 out of every 10,000 available working days). Comparable figures for 2001 were 29 stoppages, 99,000 workers idled, and 1.2 million days of idleness (BLS Work Stoppages Summary, 11 March 2003).
The BLS major work stoppages series, which dates back to 1947, covers strikes and lock-outs involving 1,000 workers or more and lasting at least one shift. Of the major work stoppages beginning in 2002, 16 were in private industry and three were in state and local government. In private industry, the largest number of stoppages (five) occurred in the manufacturing sector, the construction sector (three) and the transportation and warehousing sector (three). In state and local government, two stoppages were in education services and one was in public administration.
One work stoppage beginning in 2002 accounted for 20% of all workers idled. This stoppage was between the PMA and the ILWU, with 10,500 workers idled (see above under 'Legal developments'). None of the remaining stoppages idled 5,000 or more workers.
Almost half of the year's work stoppage days of idleness stemmed from three major disputes, including the dispute between the PMA and ILWU (129,500 days). The other two disputes were between the Lockheed Martin company and the IAM (101,500 days), and the Hershey Foods Corporation and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) (84,000 days).
The average length of work stoppages beginning in 2002 was 21 days, and nearly three-quarters of all work stoppages lasted 30 days or less. The longest work stoppage was a 51-day dispute between three bus lines in Queens, New York and the Transport Workers Union of America (TWU), which also was the only dispute in 2002 that lasted more than 50 days.
While the ILWU-PMA battle was the most visible and politically charged dispute of 2002, a less discussed short strike waged by the UAW against Johnson Controls, a maker of instrument panels, was significant for different reasons, specifically, the impact of the stoppage revealed just how vulnerable 'just-in-time' producers can be to a strike at one link in the chain of production.
The auto industry has undergone major restructuring over the last decade or so, with the big companies having outsourced parts production to a about a dozen first-tier suppliers, such as Johnson. The UAW, having won recognition at the company, held a strike for a first contract in June 2002. The three-day stoppage involved only 700 workers, but halted or impeded production at three DaimlerChrysler and two General Motors facilities dependent on Johnson Controls for instrument panels, seat, and other parts. The UAW secured contracts that won bonuses, USD 3 hourly pay increases, a new pension plan, plant closure prohibition and other gains. The company also agreed to 'card check neutrality' for 26 additional plants, which means that the company will remain neutral in any future UAW organising drives and will recognise the union where a majority of workers sign cards, without an NLRB representation election.
In 2001 more than one quarter of the US workforce - 26.6% - was employed in 'non-standard' arrangements, down a little from 29.4% similarly employed in 1995. The word non-standard is one of several used to describe this group of workers, others include 'contingent', 'flexible', or 'alternative' workers.
The BLS began looking at this category of workers in 1995 and has continued to do so since. Hitherto, little had been known about the composition of this sector of the workforce, although it had become clear by the end of the 1980s - a decade that saw Fortune 500 companies shed 3 million positions - that temporary or contingent work was on the increase alongside the proliferation of smaller companies. A March 1993 article in Time magazine by essayist Lance Morrow ('The temping of America') drew attention to the fact that the USA’s largest employer was a temporary work agency, Manpower Inc, with 560,000 workers. Morrow generally pointed to the negative side of non-traditional work arrangements - insecurity and lower levels of remuneration - while others saw the change in the nature of work as a triumph for independence and entrepreneurship or, in the words of one commentator, 'a return to the Emersonian spirit of self-reliance on which this nation was founded' (A return to self reliance, Tom Peters, TPG Communications, 1993).
The BLS has gathered data for seven categories of employees in nonstandard arrangements since 1997 in three biennial surveys (1997, 1999, and 2001). In 2001, 'regular' part-time workers made up 12.8% of the US workforce, while: temporary employment agency workers made up 0.9%; on call/day labour 1.7%; self-employed 4.1%; independent contractors with a wage or salary 0.7%; self-employed independent contractors 5.4%; and contract companies 1.0% (see BLS Contingent Work Supplements to the Current Population Survey).
The data show that, in 2001, 31% of women worked in non-standard employment, compared with 22.8% of men. Wages for non-standard workers in normal part-time situations were below the full-time norm - up to 25% lower for men and 15% lower for women. The self-employed and independent contractors, however, tend to earn more per hour than full-timers by as much as 25% for women and nearly 14% for men. Only a small portion of non-standard workers received health insurance through their employer - 14.8% of women and 12.4% of men - compared with 66.8% of women and 70.8% of men in traditional full-time employment. As for pensions, 38.5% of non-standard workers were in a plan compared to more than two-thirds of full-time workers.
White people are overrepresented in non-standard employment; 78.5% of non-standard employees are white, compared with 73.8% of the overall workforce. Black people are very much underrepresented among the self-employed, one of the few areas of non-standard work that pays well. Black people make up only 2.8% of the self- employed and 6.3% of self-employed independent contractors. Hispanic people are also underrepresented in these higher-paying categories.
The BLS surveys shine considerable light on the long-standing debate regarding employee preferences for standard or non-standard work. Proponents of non-standard work arrangements often claim that they fit better with responsibilities related to childcare and education (in the USA, many adults attend college to earn an associate’s or bachelor’s degree while they are working). However, only 2% or less of these workers were enrolled in an educational institution in 2001. While parents with children under six years old did prefer non-standard work arrangements, by a majority of about 8 percentage points, most were in part-time jobs that offered regular hours and a dependable schedule. Temporary agency jobs, for example, tend to disrupt schedules and can play havoc with childcare arrangements.
Interestingly, the economic expansion and tight labour market conditions of the late 1990s tended to pull workers back into traditional full-time work where pay and benefits were normally better. With unemployment rising throughout 2001-2 and into 2003, the proportion of workers in non-standard work might be expected to rise once again.
In 2000, the General Accounting Office (GAO) published a report based on the BLS data that proposed the consideration of more portable and affordable benefits for some contingent workers. It also floated the ideas that temporary agencies provide some benefits themselves, or that contingent workers be offered tax incentives to purchase their own health insurance. (Contingent workers: incomes and benefits lag behind those of the rest of workforce, GAO, June 2000 - for a thorough analysis of the BLS data, see Share of workers in ‘nonstandard’ jobs declines, Jeffrey Wenger, EPI Briefing Paper # 137, April 2003).
From the point of view of employers, the growing cost of health insurance and pension contributions are perhaps sufficient reasons for seeking part-time and temporary workers. Mushrooming temporary work agencies such as Labor Ready perhaps demonstrate the potential spread of temporary agency work away from office jobs and across the whole economy, and are meeting the needs (or desires) of businesses to be able to hire labour on a short-term basis at much lower overall costs and commitments (see the 2000 GAO report cited above). In 2002 Labor Ready employed (and deployed) 700,000 non-union skilled construction workers and manual labourers. It is worth noting that Labor Ready has been engaged in an acrimonious battle with unions in the building trades which point to the fact that the company pays the minimum wage (USD 5.15 per hour) to most of its workers and provides no healthcare, sick pay, annual leave, life insurance, disability coverage or retirement plans. By March 2003, the company had opened 769 operating branches across the USA.
US-based research on telework has so far raised more questions than have been answered. The economic drivers behind telework are, however, fairly clear and ubiquitous. Faced with highly competitive pressures, companies can move away from tight labour markets and at the same time reduce costs and spread risks.
Several studies have been conducted that provide credible data that can be generalised to the US economy. These studies confirm, unsurprisingly, that 'remote working' has had a significant impact on skills, job satisfaction, employment behaviour and work organisation. It is now clear, moreover, that the population of remote workers changed dramatically during the 1990s. In the 1980s, most teleworkers were women trying to juggle work and family responsibilities. By the late 1990s, most remote workers in the USA were male professionals and managers performing analytical, coordination and communication tasks. As one would expect, telework has had a particularly significant impact on the supervisory role of managers, driving a shift from observation- or attendance-based methods to results-based methods or 'output control' .
For employees, remote working brings certain advantages, such as the opportunity to relocate and still be able to stay with the same employer. Workers can also schedule and pace their work in a more autonomous manner, something both men and women support in fairly equal proportions. Taken as a whole, the literature points to higher job satisfaction among remote workers. However, there is a general lack of empirical evidence that might generate scrutiny of some of the more negative aspects of remote work.
Some workers have lamented the loss of separation between home and work, and women workers have complained that their work at home appears to be taken less seriously than their office-based work. There are issues, too, concerning promotion, pay and recognition (what might be termed the 'invisibility factor' ).
In economics and management literatures, according to one extensive review, teleworkers and/or telecommuters have tended to be treated as though they were equal. These literatures offer little evidence of the effects on pay, employment security, career ladders, and other outcomes for various groups within the US workforce. Clearly, the telework experience may prove to be as mixed in terms of employee positives and negatives as is the traditional work experience (see IT at work: information technologies and remote working in the United States: a literature review and appendices , Nance Goldstein, SRI International, 2003).
The growth of telework and the 'elimination of distance' has allowed companies to outsource not just within the USA but also overseas. Outsourcing has allowed companies to shift costs and risks to others - a development that, in a highly competitive and ever-changing environment, may seem necessary and probably unavoidable.
US companies can generally restructure or relocate in the face of these pressures with minimal requirements to inform, consult, or negotiate with employees. The Worker Adjustment and Retaining Notification Act (WARN Act) does, however, require companies with 100 or more full-time employees to provide 60 days' notice in advance of a plant closure or mass redundancies. WARN also provides for notice to be given to States' 'dislocated worker units' so that dislocated worker assistance can be promptly provided, and laws do exist (such as the Trade Readjustment Act) that provide some relief and assistance to certain categories of displaced worker. In addition, a handful of collective agreements contain agreed procedures related to company restructuring, relocation and closure, but these tend to be the exception to the general rule. The deregulatory climate, coupled with the perception in business and policy circles that restructuring is almost always good for the economy (if difficult for some workers in the short term), has made changes to this general picture unlikely for now.
Some of the most recent restructuring activity driven by globalisation, however, threatens to arouse a new wave of anxiety over the general loss of well-paid jobs to the US economy. Amid rising concerns regarding the real or perceived negatives associated with NAFTA and free trade, a Business Week article in early 2003 called attention to the 'new global job shift', and presented several examples of large companies moving 'offshore' high-level jobs in 'knowledge work' (such as research and development, chip design, engineering and financial management). Just how significant this trend is in terms of its impact on the USA’s 10 million IT workers, or in terms of its broader economic impact is, of course, a subject of considerable debate. Citing outsourcing experts, Business Week speculated that white-collar globalisation would increase dramatically in the coming five or six years, 'when global white-collar sourcing practices are standardised' (The new global job shift, Business Week cover story, 3 February 2003).
Further evidence of a large 'out-migration' of non-manufacturing jobs can be found in a recent UC Berkeley study that assessed the 'second wave' of outsourcing driven by globalisation. The researchers say that the trend could leave as many as 14 million service jobs in the USA vulnerable - much higher than the 3.3 million projected by an earlier study. India is the leading destination for outsourcing due to its population's widespread use of English in both education and business, institutional similarities with the USA in its legal system, wide wage differentials with the USA, and its large numbers of science and engineering graduates. However, China, East Asia, Russia, Israel and Ireland also are increasingly popular and competitive outsourcing destinations (see The new wave of outsourcing, Ashok Deo Bardhan and Cynthia Kroll, UC Berkeley, Fall 2003).
Within the USA, the growth of the 'large box' retailers (such as Wal-Mart and Home Depot) is changing the face of thousands of communities. Wal-Mart is the largest private sector employer in the USA, with 720,000 employees, and its expansion into the grocery business is expected to make it 20% larger. There is a growing body of evidence that, while consumers benefit from lower prices, the proliferation of box retailing has increased car-dependency and traffic congestion. Small businesses, too, have often been unable to compete with the prices offered by the box retailers, although smaller supermarkets have also suffered for the same reason.
The consolidation of the media has also attracted attention recently. Driven by the deregulatory Telecommunications Act of 1996, companies such as Viacom, Disney and NBC have greatly increased their hold on the industry, generating concerns in some quarters that both news and entertainment are being controlled by fewer and fewer firms. Critics maintain that such consolidation shuts off political and cultural diversity, as local voices give way to single-source news and entertainment. The dramatic six-year growth of Clear Channel illustrates the point. With revenues of USD 8.4 billion in 2002, as part of its business the company now operates over 1,200 radio stations in the USA and is able to reach 100 million listeners daily. Clear Channel, using voice-tracking technology, often uses one radio-show host or disc jockey to serve hundreds of stations simultaneously, thus 'de-localising' the content. Clear Channel has also used 'virtual orchestras' at many of its entertainment venues instead of live musicians.
The labour relations environment in the USA can be expected to remain tense through to the presidential election in November 2004, with political factors shaping the workplace at least as much as economic transitions. Despite the Bush administration's involvement in Iraq, the White House has continued to make proposals designed to change the workplace. Of particular note was an effort to redefine overtime in a way favorable to employers. Since the passage of the Fair Labor Standards Act of 1938, employees working more than 40 hours per week are entitled to time-and-a-half overtime pay. The administration moved to enact 'family-friendly' alterations that would remove overtime protections for 8 million workers. Certain categories of overtime-eligible workers earning between USD 22,101 and USD 65,000 a year were to be reclassified as executives, administrative, or professional employees, and would no longer qualify for overtime pay. The proposal narrowly failed to make it through Congress, but the initiative again saw trade unions fighting a battle to defend a legal provision first enacted during the depression of the 1930s.
The unions will spend the next period mobilising their considerable resources to help elect the Democratic presidential nominee. Always a formidable force at election times, the unions can be expected to put more energy and resources into the 2004 presidential election than at any time in living memory. The emphasis in recent years on organising more workers can, in the face of general failure, be expected to diminish as unions seek to help the Democrats win back Congress and the White House. Unions have yet to reach consensus on a candidate, with several large unions endorsing different candidates. AFL-CIO has been greatly encouraged by the fact that all the Democratic presidential candidates have agreed to support an amendment to the National Labor Relations Act that would make 'card check' a legitimate means of winning union recognition, a move that, if implemented, would make a qualitative difference in the US labor movement's prospects for serious recovery. All in all, however, discourse within the labour movement regarding the 2004 elections has a distinct 'do-or-die' character, with many commentators expressing doubt that the unions can survive another four years of President Bush.
On the economic scene, the impressive jump in economic growth in the second half of 2003 has done little to dispel serious concerns in some circles that most workers will struggle to hold on to the levels of pay and benefits reached during the 2001 recession. Driven by a sharp upturn in military spending, the recovery has generated few new jobs as international outsourcing of IT and other 'knowledge' occupation has made nightly news on the major television networks. A New York Times editorial (on 15 November 2003) on the 'Wal-Martization of America' reflected the concern of liberal opinion that large sections of the unskilled and immigrant workforce are receiving neither fair treatment nor fair reward for their work. Wal-Mart's employment practices, the Times declared, 'threatens to push many Americans into poverty. The first step in countering it is to enforce the law. The government must act more vigorously, and more quickly, when Wal-Mart uses illegal tactics to block union organising. And Wal-Mart must be made to pay if it exploits undocumented workers.'
On issues of global governances and international trade, there is a growing sense that the USA has shifted away from a 'globalist' approach and will pursue a more unilateralist and nationalist course. The battle over the USA's agricultural subsidies has thrown the World Trade Organisation into crisis and there appears to be little effort on the part of the Bush administration to repair relationships with countries like Brazil which are seeking an end to what they see as one-sided protectionism. The Free Trade Area of the Americas, basically an extension of the North American Free Trade Agreement (NAFTA), is also unlikely to be adopted following a stalemate (again mainly over agricultural subsidies) at November 2003 ministerial meetings in Miami. Exactly how these changes will affect the American workplace in the months and years ahead remains to be seen, but there is a general sense of uncertainly across US society about these trends and what the future might hold for US business and its workers.
Sean Sweeney, School of Industrial and Labor Relations, Cornell University