Future Directions Research Paper

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Since the enactment of the Railway Labor Act in 1926 and the National Labor Relations Act in 1935, American workers in the private sector have enjoyed the right to organize into unions of their own choosing to negotiate with their employer and establish their wages, hours, and conditions of work. The term “labor relations” broadly refers to the parties involved in this relationship and to the various interactions, procedures, processes, and actions that occur between them. The employees, represented by the union, and the employer, represented by management, may have different priorities regarding the allocation and utilization of human resources in the production of goods and services and about the terms and conditions relating to employee compensation and welfare. While there are broad overall goals that are important to both parties (e.g., survival of the firm), there will likely be differences over the immediate functional and procedural issues in the workplace. The labor-relations process focuses on how the parties deal with these differences and reach a mutually satisfactory accommodation that allows for a workable ongoing relationship and continued production. The purpose of this research-paper is to outline the basic nature of labor relations in the United States and offer a long-term perspective on its development. Indeed, the goal is to look 20 years into the future to prognosticate the characteristics and state of labor relations in the year 2025. While these projections of the future cannot be comprehensive, they will draw upon important general trends and specific factors and explore their influence on the key institutions and processes that will constitute labor relations at the quarter-century mark.

Initially, a brief overview is presented of the basic nature and unique aspects that historically characterize labor relations in the United States. Then, there is a review of the state of American labor relations as they have evolved in the early 21st century. Next, some important trends that will likely influence the directions of union-management relations in the foreseeable future are presented. The focus then turns to the projected characteristics of key institutions and processes that will constitute labor relations in the year 2025. Finally, some concluding comments on labor relations in 2025 will be offered.

Important Characteristics Of American Labor Relations

The relationship between the union representing workers and the employer typically has been characterized as adversarial in nature. Indeed, it is a relationship in which each party exercises its power to get the best deal it can from the adversary. Management, which is responsible for the overall performance of the firm, has traditionally emphasized the importance of maintaining control of operations, keeping costs at a minimum, and having the immediate capability of making the changes it deems necessary. Individual workers, on the other hand, are in a dependent position with relatively little voice or ability to influence decisions affecting their job security, how they are utilized, or how much they are paid. Given this situation, workers join to form unions to gain power and a collective voice in these important

decisions—which tends to restrict the control of management. Thus, while the parties are interdependent and may have some shared broad goals for the overall success of the organization, they tend to have different positions regarding how workers are managed and rewarded. When the union representing the employees meets with management to define the rules of the relationship, it is a process where the parties are engaged in hard bargaining to reach a mutually agreeable arrangement to carry out the productive activity of the firm. If an agreement cannot be reached, then either of the parties (or both) can use its power to take coercive action (e.g., a union strike, an employer lockout) to pressure the adversary to give concessions and force movement toward an agreement.

It is also relevant to note that American labor relations are characterized by the term “voluntarism.” This means that labor representatives and management, within the legal framework established by government for workers to organize into unions and to bargain with employers, are given maximum freedom to work out their relationship based on their respective power positions. They voluntarily enter into a contractual arrangement specifying the rules that will govern the employment relationship that they have forged through their negotiations. Typically, the government plays a very limited role in the relationship. As a third party, government functions more as a facilitator or referee when there are problems. It may intervene more directly when there have been violations of the law in the labor-relations process or when there is a labor-management conflict that has a significant negative impact on the broader society.

Unions

Labor unions, as representatives of the employer’s workers, are key institutional players in the labor-relations process. They are a unique type of organization formed out of the collective discontent of workers who find themselves in a dependency position with little voice or influence over important aspects of their work life. Traditionally, unions are protest organizations, sometimes referred to as “managers of discontent” that focus and direct worker concerns regarding their work situation. In such a role, unions act as devices to regulate employer discretion wherever it affects the workers’ tangible interests. Interestingly, unions have also regulated competition among the workers, since they will negotiate specific and uniform rules in the work context and require workers to conform to them.

American unions, as contrasted to many European labor organizations, are nonideological and are not broad-based working-class movements. They are not formed as part of a political movement nor are they monolithic entities trying to represent all workers. They have been characterized as being pragmatic, opportunistic, and relatively narrow in focus. Indeed, Hoxie, an important early scholar of unionism, used the term “business unionism” to describe this type of American unionism. The emphasis is on the use of collective bargaining by unions to achieve tangible and pragmatic goals to benefit their specific memberships in a particular craft or industry. In conjunction with this pragmatism, unions have traditionally been oriented to the current situation with little done in terms of long-range planning. They have typically focused on the here-and-now issues that affect their membership—and they generally have been reactive to management decision making.

While unions are not working-class movements or political parties themselves, they are internally highly political organizations. They are basically democratic institutions wherein the leaders are accountable to the membership and are elected by it. The union leaders must satisfy the membership if they are to stay in office. This, as might be expected, can lead to a good deal of internal political activity by rival factions seeking support of the membership. To stay in office and maintain power, leaders may be forced to take positions within the union and with employers that they do not entirely support, since they cannot afford to alienate important power blocks in the union. Union officers must show that they are supportive of membership “needs” and are willing challenge management to get them. This can lead to difficult negotiations since the range and depth of the membership desires presented by the union leadership in negotiations may not be entirely feasible or viable for the firm.

Labor Relations: Transition Into The 21st Century

By the mid-20th century, collective bargaining was an accepted institution in the functioning of the American economy. American industry was dominant in the world and, for the most part, it was domestically based. Unions were well established, unified into a single labor federation (AFL-CIO), and represented over one third of the nonagricultural workforce. They were powerful players in the economy—particularly in the core manufacturing, construction, communications, and transportation sectors. The public sector was only lightly organized. The largest and most powerful unions were the traditional industrial and craft unions such as the Steelworkers (USW), Auto Workers (UAW), the Teamsters (IBT), the Carpenters and Joiners (UBC), and the Electrical Workers (IBEW). These and other unions employed their significant power in negotiations to protect employment, raise wages, and develop new and extensive benefit programs (pensions, health care, etc.) for members. While employers had never accepted unions as equal partners, they recognized the legal right of unions to represent their employees and respected the power that unions had to affect the firm’s operations. Employers were willing to deal with unions through collective bargaining. Hard bargaining was characteristic of the period. Strike activity was relatively high—with over 2 million workers involved in 363 strikes, each of which involved 1,000 or more workers in 1955.

Fifty years later, the labor-relations scene in the United States was dramatically different. Significant shifts in employment from manufacturing to services, a meaningful effort on the part of many employers to implement better human resources practices, the increased willingness of employers to take an aggressive (even militant) stance in avoiding unions, the growth in government legislation that dealt with issues of interest to workers (e.g., health and safety, equal employment opportunity, pensions, etc.), and the unions’ own lack of investment in organizing, among other things, led to an entirely new labor-relations situation. In 2006, union density had dramatically declined. Unions represented only 12% of the nonagricultural workforce— and only 7.4% of the private-sector employment. Unions had, however, grown in the smaller public sector and now represented 36.2% of workers at all levels of government. The largest unions were now the Service Employees International Union (SEIU), the Food and Commercial Workers (UFCW), the State, County and Municipal workers (AFSCME), the Teamsters Union (IBT), and the National Education Association (NEA).

The increased competitive context faced by employers, their desire for more flexibility, and the need to control costs—coupled with the general decline in union power— created a situation in which many labor organizations faced strong opposition to their efforts to organize workers. Unions were winning only somewhat over half of the representation elections held by the National Labor Relations Board (NLRB). Even if the union won, the election to represent the firm’s employees, however, in only about half of these cases was it able to negotiate a contract with the employer within 2 years of being recognized. Where unions did have established representation and were able to get contracts, they often faced significant concessionary demands from employers to reduce costs and increase productivity so the firm could remain competitive. As a result, these negotiated contracts often reduced union members’ job security, eliminated or loosened restrictive work rules, held down wage increases (or even gave concessions), shifted more of the cost of benefits to the employee and, in some cases, reduced the scope of worker benefits. Unions were weakened and in many cases were clearly on the defensive. Reduced union power and the lack of effectiveness in using direct coercive tactics is reflected in the fact that in 2005, strike activity was very low—with a total of only 100,000 workers participating in 22 work stoppages that involved 1,000 or more workers.

The labor movement itself, with significant internal disagreements on how to deal with the declining membership and how to reestablish its now diminished power, was fractured when, in 2005, several key unions withdrew from the AFL-CIO to form an alternative labor federation called the Change-to-Win Coalition. Major unions including the SEIU, the United Food and Commercial Workers (UFCW), the Teamsters (IBT), UNITE-HERE (hotel, restaurant, textile workers) along with the United Farm Workers (UFW) left the AFL-CIO. They were joined by the Carpenters Union, which had disaffiliated earlier, and the Laborers Union (LIUNA), which did not disaffiliate from the AFL-CIO, to form Change-to-Win. The new coalition’s goals were to focus more on organizing workers rather than on national politics. It emphasized consolidation, more centralized direction, and cooperation among unions in organizing on a regional or industrywide basis. The new union coalition stated that it wanted to stimulate change in the labor movement—not create rivalry and division in the movement. While the split occurred at the national level, the unions associated with the two federations continued to participate together on issues of mutual interest in state and local AFL-CIO labor bodies through an innovative device called “solidarity charters.” Indeed, even the two federations at the national level have continued to cooperate on broad issues of mutual interest—such as electing supportive politicians in the 2006 elections.

Trends Affecting Labor Relations Of The Future

In order to look to the future of labor relations and discern the likely scenario 20 years hence, it is appropriate to first identify some of the important current changes and trends that are likely to extend beyond the present and have an impact on the relevant institutions and processes over the foreseeable future. Indeed, what factors are likely to influence the nature and size of unions? What trends will affect employer needs and expectations? What will likely influence the evolving power relationships, structures, and processes used by the parties in the labor-management relationship? Some changes that have the potential for influencing the evolving nature and processes of labor relations include globalization, demographic changes, industry and employment structural changes, and income and benefit inequality.

Globalization

Markets and production operations have increasingly become international in nature and will continue to move in that direction for the foreseeable future. Where at one time the focus was domestic, it is now global. The economic growth of Asia, the development of free trade agreements between the United States and other countries and regions, and the overall growth in transnational companies and commerce have impacted and will continue to impact American labor relations. This has led to the decline in U.S. manufacturing employment as work has been shifted to low-cost developing countries. Illustrative is the case of the auto industry—a former bastion of union power and strength. In 2006, Ford indicated that it was considering building a new plant in Mexico even while it was shutting down factories and laying off union workers in the United States. This would mean billions of dollars of investment in Mexico with tens of thousands of jobs created to produce a new subcompact car. DaimlerChrysler AG’s Chrysler Group negotiated an agreement with Chinese automaker Chery Automobile Co. to build a subcompact car to be sold in the United States and other world markets. The first cars will arrive in the United States in 2008. Chrysler said that it could not build such a car in the United States due to high labor and other costs. Jim Owens, CEO and Chairman of Caterpillar, in a 2007 Wall Street Journal interview, indicated that the company was “going to have a lot more employment growth outside than inside the U.S.”

There is a significant growth in “off-shoring” (sending work to other lower cost countries) not only in manufacturing but also in many service jobs (e.g., information technology, call centers, research activity, back-office jobs, etc.). While estimates of future American jobs losses to offshoring vary, all are in the millions. Indeed, economist Alan S. Blinder, Princeton professor and former Federal Reserve Board vice chairman, has warned that as many as 30 to 40 million American jobs could be at risk of being off-shored in the next 10 to 20 years. Many of the countries that are receiving U.S. investment and jobs have labor movements that represent employees—but they often represent workers who have different needs than American workers; some have strong political or government ties and have a different organizational structure. Often there is little history of serious widespread cooperation with U.S. unions. Companies, through efforts to compete in the growing global marketplace, will continue to develop international operations—and the power of unions in the United States to impact these companies and negotiate with authority will be challenged.

Demographic Changes

The American workforce continues to become more diverse. The classic image of the average worker being a White male in a blue-collar job is no longer relevant. The labor force is increasingly diverse in terms of gender, age, race, cultural background, and ethnic characteristics. Indeed, the U.S. Bureau of Labor Statistics has noted that from 2000 to 2005, women filled more than half of the U.S. jobs. Racial and ethnic minorities, especially Hispanics, are the fastest growing sector of the population. Immigrants, including a sizeable influx annually of illegal immigrants from Latin American countries, constitute a significant addition to the workforce. By 2025, it is expected that persons of Hispanic origin will constitute about 18% of the population, Asians about 6 %, African Americans about 13% and Whites about 62% (down from 71% in 2000). Indeed, by 2025 it appears that non-Whites and Hispanics will constitute over 40% of the workforce—and that non-Whites, Hispanics, and women will account for about two thirds of the American workforce. In addition, by 2020, the proportion of the workforce in the prime working age group of 25 to 54 years will shrink significantly and the percentage of the labor force age 55 and over will grow to about 23% (up from 13% in 2000).

This vast growth in workforce diversity has significant implications for labor relations since unions cannot rely on classic approaches to organizing, representing, and bargaining for such workers. Beyond their basic needs, each of these diverse groups will have different concerns that will have to be addressed by both unions and employers. Each one will likely have a particular opinion about unions and the prospect of being represented by them. Some polls suggest that women may be more favorably disposed toward unions than men, and younger workers may be more likely to support unions than older persons. The question arises as to whether unions will be able to connect with this new workforce to (a) bring them into the labor movement and (b) to effectively represent their diverse interests in the employment relationship.

Industry and Employment Structure

The structure of industry and employment in the United States will continue its shift toward the provision of services and away from the production of goods and agriculture. For some time the employment in manufacturing, a core base of traditional unionism, has been declining. While in 1994 manufacturing employment constituted 13.2% of employment, by 2014 it is projected to have only 8.2% of U.S. employment. The number of factories in the United States in 2005 declined 10% from its 1997 peak and the downward trend shows no sign of reversing. The new factories that are now being built utilize cutting-edge technology to be competitive—and this means fewer traditional blue-collar manufacturing jobs. Job growth is projected to be in sectors such as professional and business services, educational services, health care and social assistance, and leisure and hospitality.

In order to increase flexibility and reduce costs, American firms have increasingly turned to the use of part-time, contingent and alternative employment workers (i.e., temporary workers, contractors, consultants, and freelancers) to complement a reduced core of regular employees. Indeed, data from the U.S. Department of Labor indicates that about a quarter of the workforce is made up of such workers, who constitute a growing sector of the workforce. These workers are frequently employed in service industries, in office and administrative support positions, and as operators, fabricators, and laborers in transportation, manufacturing, and construction. Many of these workers, such as those with temporary help agencies, are paid less than standard employees are and rarely have benefits such as health-care coverage, pension contributions, and vacation days. While unions have expressed concern about the status and use of contingency workers, there is a very low rate of unionization among them.

Income and Benefits

There is a growing inequality of income and earnings in the United States and a continuing trend for employers to reduce their responsibilities for pension and health-care benefits for workers. In 2007, Federal Reserve Chairman Ben Bernanke noted that there was a significant and growing differential in wages and household income in America. He pointed out that those in the 90th earnings percentile had received increases of 34% in inflation-adjusted wages during the 1979-2006 period while those at the 50th percentile had increases of 11.5% and those at the 10th percentile had 4% increases. He noted that for household income, those in the top 20% had 50% of the after-tax income and government benefits in 2006 (compared to 42% in 1979) while those in the bottom 20% had only 5% (compared to 7% in 1979). This growing hiatus between the haves and have-nots was attributed to a number of factors including the strong demand for highly educated workers in a knowledge-oriented economy, the decline of unions, the surge in corporate chief executive salaries, and the impact of globalization. This trend obviously creates a significant underclass of low-earning workers who have little power individually to change their situation. Many of these persons are poorly educated and/or are immigrant workers who are not union members.

In addition to the growing inequality in earnings and income, there is a growing trend for employers to freeze or terminate pension plans and to reduce health-care coverage or shift more of the burden of paying for health care to employees. Employers have expressed concern about the expense and funding volatility of the classically defined benefit pension plans and, increasingly, have replaced them with defined contribution plans, which depend on employee saving and investment. According to the Pension Benefit Guarantee Corporation, there were more than 114,000 defined benefit plans in the mid 1980s, but by 2005, they numbered only 30,336.

As just noted, more companies are shifting an increasing part of the cost of health-care benefits to their employees and are trying to shed the burden of funding open-ended retiree health benefits. The cost of employer-provided healthcare benefits has grown substantially over the years. The Employee Benefit Research Institute notes that in 1950, health-care costs constituted only 8.8% of total benefit costs. This rose to 23.4% by 1975—and in 2005, healthcare costs represented 43.7% of all benefits costs. Some companies, especially smaller firms, have dropped healthcare coverage altogether. In other cases, employers are demanding that employees assume more responsibility in paying insurance premiums and/or they are encouraging employee movement to high-deductible consumer-driven health plans. Historically, many of these classic benefits (e.g., defined benefit pensions, employer paid health-care insurance) were negotiated by unions for their members.

Now unions, in a weakened state with declining membership, are facing the negotiating challenges of meeting worker retirement and health security needs in the face of significant employer pressure to reduce costs.

Labor Relations In 2025: An Overview

Given the changing employment and economic environment, the participants, processes, and structures of labor relations will be rather different in 2025. There will be fewer unions and they will be broadly focused and united into a single labor federation with more emphasis on interunion cooperation in organizing and bargaining. While unions will retain core elements of their roles as protest organizations and business unions, they will evolve to incorporate more characteristics of broader social movements. Unions will work in coalitions with community groups and will enjoy meaningful membership growth in the next 20 years. They will direct organizing efforts toward workers whose jobs are not likely to be off-shored and toward those persons representative of the growing segments of the workforce. Their organizing efforts will focus on broader skill, industry, and geographical bases and will continue to emphasize pragmatic solutions to worker problems—but will also place increasing importance on broader concerns of social justice. There will be more global cooperation among unions in various countries to deal with international companies. American employers will continue to actively resist union organizing; but due to more effective union tactics and legislative changes, unions will be more successful in their efforts.

Bargaining structure will be broader with a focus on centralized negotiations for contracts covering employees in an industry or geographical area. The bargaining process will be characterized more as “interest-based bargaining” and less on win-lose hard bargaining. More union-management relationships will emphasize cooperation and joint efforts. The content of bargaining will deal more with issues that are important for organizational viability and success such as flexibility and mutual sharing. Unions will take on more responsibility in managing retiree health-care plans and other benefits.

Strike action by unions will remain at historic low levels. Industrial conflict will certainly be part of the labor-relations process, but will manifest itself in more subtle and indirect ways—such as corporate campaigns, unpredictable job actions, and third-party pressures.

The Labor Movement in 2025

In response to their long-term decline and the recognition of both the challenges and opportunities in the emergent contextual trends, unions, out of necessity, will reinvent themselves in terms of their focal objectives and organizational characteristics. This will be reflected in their approaches to organizing workers and dealing with employers. Indeed, this redefinition and reorientation, along with the enactment of legislation facilitating organizing, will result in the growth in the number and proportion of the U.S. workforce who are union members. By 2025, the unions will grow to represent approximately 11% of the private-sector workforce and about 38% of the public-sector workforce.

Union Structure and Focus

There will be significant consolidation in the labor movement over the next 20 years. There will be fewer unions as the smaller national unions and local independent unions merge or are absorbed by larger unions. This consolidation will be necessary for the smaller unions to get the resources and expertise they need to deal with employers in a more competitive context with low-cost rivals overseas and employer demand for concessions. The absorbed unions will become operating units or locals of the larger more powerful unions. The number of unions will decline from 59 (affiliated with AFL-CIO and/or the Change-to-Win Coalition), to about 40. There will be about 14 to 15 very large unions that cover basic industrial sectors (e.g., UAW, USW, SEIU) or that broadly represent all types of workers (e.g., IBT) and about 25 smaller specialized unions for workers, in particular for crafts and occupations (e.g., Firefighters, Federation of Professional Athletes). The AFL-CIO and the Change-to-Win Coalition, while initially rivals, increasingly will emphasize cooperation at all levels on economic and political issues. The two rivals will eventually join forces and form a partnership that will emphasize joint efforts and cooperative programs.

In an effort to respond to the changing environment and enhance their influence and attractiveness, unions will assume more of a role as “social movements” than has been the tradition. They will form ongoing active coalitions with community, religious, and social rights groups with an agenda that goes beyond the workplace and deals with social issues. These coalitions will provide legitimacy and a positive image of the union with a range of groups the union wishes to organize or which it needs for support in its representation and negotiation activities. For example, by partnering with a particular group (e.g., faith-based or immigrant group), the union can obtain useful advice on matters relevant to that constituency and can mobilize support beyond the union membership for relevant political (e.g., elections), social (e.g., community welfare), and economic action (e.g., organizing, strikes, boycotts). Recent illustrations of such coalitions and social actions would include the 2006 AFL-CIO partnering with Interfaith Worker Justice to fight workplace discrimination and civil rights violations for low-income workers and its partnership with the National Day Laborer Organizing Network—which is a national network of worker centers dealing with problems of illegal immigrants. The Change-to-Win Coalition has developed a partnership with organizations such as the Rainbow/PUSH Coalition—with support by activists like the Rev. Jesse Jackson. In addition to coalition formation and building, unions will independently take actions to show concern for social justice—and enhance their public image and reinforce their legitimacy. Current examples of these types of actions that are likely to be more characteristic of unions in the future would be the national walk sponsored by the AFL-CIO to raise awareness about economic inequality in the Gulf Coast area and the effort by Change-to-Win to set up a worker-training initiative involving mobile training centers for people who had been displaced by Gulf Coast hurricanes. Unions will place emphasis on forming organizations of working people who are not union members but who share union members concern about workplace and social issues. Illustrative is the effort by the AFL-CIO in launching Working America, a membership organization of persons who are not union members but who are concerned about social justice and want a voice to speak out and work to change the direction of the country. Such activities and efforts will be increasingly employed by the labor movement in the next 20 years.

Union Organizing

Union organizing in 2025 will have two key target dimensions: organizing by type of work and by worker characteristics. Regarding type of work, there will be less emphasis on organizing manufacturing workers and significant effort in organizing three types of service workers. First, there will be a continuing effort to organize semiskilled or low-skilled service workers in jobs that cannot be easily sent offshore (e.g., janitors, childcare workers, bus drivers, security guards, etc.). Second, unions will increasingly work to organize white-collar and professional personnel whose jobs are being made more routine, who suffer from diminished control, and who are perceived as being devalued by the employer. This will include physicians, engineers, psychologists, congressional researchers, and other professional occupations in large bureaucratic organizations. In 2005, the labor movement estimated that around half of all union members were white-collar workers—and this will grow to a sizeable majority by 2025. Finally, with the growth in “free-agent” contractual labor, unions will organize workers on a broad basis by skill rather than focus on a specific company. Unions will form agencies that will provide a response to the growth in temporary agencies. Union agencies will provide placement services and benefits such as health and pension plans.

Organizing efforts will be focused on the growing segments of the workforce—women, minorities, and immigrants. Women are particularly concerned about inequality in pay, rising health-care costs, and work/life balance issues. Immigrants and minority workers, often employed in the growing sectors such as retail, hospitality, and health care, are concerned about gaining legal residency, obtaining fair wages and, in the case of many immigrants, learning English. The majority of union organizers will be a mixture of women and ethnic and cultural minorities. Spanish will be commonly spoken by organizers.

Organizing Tactics and Strategies

In the years leading to 2025, unions will increasingly employ more involving and community-based approaches in organizing workers. For example, they will draw upon the coalitions in which they are involved to assist them in seeking justice and organizing workers. By working with religious and civil rights groups, they not only gain legitimacy with groups such as immigrants, racial minorities, and women but also have an active community base to pressure local leaders and officials to support the organizing effort. This may come in statements by community leaders supporting the union and/or condemning actions by the employer. In addition, it will manifest itself through such things as resolutions by local government supporting the union efforts or calling for company neutrality and voluntary union recognition.

By 2025, federal legislation will have been enacted that requires union recognition by an employer if a majority of the employees in the prospective bargaining unit indicate their desire to have the union represent them. The requirement of a secret-ballot election conducted by the NLRB will no longer be necessary to gain union recognition. This will greatly facilitate organizing effectiveness and will be an important factor in union membership growth.

Unions will make wide use of technology in their organizing efforts. While home visits by organizers will still be important, traditional handbilling at the employer site will not. The use of e-mail, the Internet, and other information technology for communicating will be key. This evolving technology has the intimacy of conversation, is more efficient than mass produced handbills, and can reach a widely dispersed set of individuals. Responses to management assertions can be answered quickly, and on-demand responses to personal concerns are possible. Webcasts, Web chats, video podcasting, blogs, and other cybernetic tools will be widely used—especially in recruiting and organizing younger workers.

Unions will attract and solicit members by becoming sources and/or managers of employee benefits such as health care, pensions, and worker training. Companies may contribute to these programs, but the union will be the responsible agency. For example, unions will create 401(k)-type retirement plans that are available to workers and not tied to a particular employer. Unions will focus on organizing on a broader geographical (e.g., all janitors in a city) or industry basis rather than on a firm-by-firm basis. In organizing a particular employer, the union will use a “trigger agreement” whereby the employers remain neutral regarding the organizing activity and the union does not seek to negotiate a contract until it has organized a majority of the market.

Response To Globalization

American unions have traditionally been domestically focused—with relatively little international presence beyond their activities in Canada. With the globalization of industry and the growth in off-shoring jobs, unions have become keenly aware of the need to deal with companies on an international basis to protect their interests. Unions in other countries also will face their own problems in dealing with multinational companies. While there are meaningful differences among the labor organizations in various countries (e.g., government sponsored vs. independent, centralized vs. decentralized, unique identities, and interests, etc.) and the needs of the workers they represent will vary, pragmatic necessity will persuade them to work together and coordinate efforts to some degree by defining some common issues of concern. For example, unions in the various countries where a global firm is present may coordinate efforts to organize the firm to have some voice in meeting overall worker needs. Or there may be concern about labor standards in a particular country that are exploitive and impact employment in most other countries. Without some coordination and cooperation among the unions in other countries, there may be little hope of successful change.

By 2025, an activist and widely accepted federation of worldwide unions will facilitate the necessary coordination in union actions to deal with transnational companies. It may be the UNI (Union Network International) Global Union, currently a loose federation of more than 900 affiliated unions in 140 countries that was formed in 2000 and created to build an alliance that could represent workers across many countries, or it may be another Global Union Federation. In its most basic activity, this organization will enlist and coordinate the efforts of the various national unions on matters of mutual agreement. It will build on, and go beyond, current efforts to induce multinational companies to sign global framework agreements, which guarantee such things such as adequate health and safety conditions, equal treatment of men and women, the right of workers to join unions, and other core labor standards in all locations. If there are disputes with a transnational firm and it is a credible issue across international boundaries, this global federation will be able to coordinate union pressure tactics in various countries. Much of the effort will focus on impacting the public image and reputation of the target companies—with the objective of affecting the companies’ business success. Strikes supporting workers in other countries will be possible, but will be rare since some countries will not allow strikes and some unions will be unlikely to take such direct action affecting the members in their own country in support of workers elsewhere.

While there certainly will be more coordination and communication among unions on an international basis, cooperation will remain limited when a firm’s decisions create a competitive win-lose situation for the unions—for example, they affect workers negatively in one country while the firm’s employees in another country are beneficiaries (e.g., a company reducing employment in one country and expanding in another).

Bargaining Process And Issues

While remaining true to their identity as business unions who seek “more” for their members, unions in 2025 will emphasize cooperation in working with employers. Under strong competitive pressures from global and low-cost nonunion competitors, the negotiations process between unions and management will have evolved to a process that might be characterized as a dual emphasis on cooperation and measured adversarialism. It will be in their mutual interest to work cooperatively to see how costs can be reduced and productivity increased—for survival purposes. The cooperative dimension of the relationship will reflect a process called “Interest-based bargaining” that is focused on defining problems and determining how they can be solved to the benefit of both parties rather than taking a hard-line position initially and bargaining from these points on a win-lose basis. However, the increased savings and added value through these cooperative efforts will be the subject of subsequent negotiation in regard to their allocation between corporate profits, business needs, and worker earnings and benefits. Different priorities at this point can lead to harder negotiations and disagreements.

In preparing for negotiations, the focus will be more on defining and agreeing on overall mutual interests and identifying the particular interests and needs of the union and employees (e.g., a secure and properly rewarded workforce) and management (e.g., efficiency and reasonable shareholder return) rather than taking specific positions. There will be joint task forces and committees to collect relevant information related to the mutual interest issues. Neutral professionals and outside experts (legal, medical, economic, actuarial) will be important participants in joint prebargaining meetings to help identify and clarify options and will offer expert counsel to the parties on specialized issues during bargaining. The union and management representatives will work together before the formal negotiations begin to set up ground rules and procedures that they believe will facilitate the negotiation process. The preliminary meetings can help identify the focal issues for discussion and, as is possible, develop jointly defined priorities.

Bargaining Topics and Issues

Union contracts will no longer contain strict work rules limiting use of union employees, but the emphasis will be on negotiating “competitive operating agreements” that create flexibility in the use of employees and allow for multiple duties. They will also allow for reducing labor costs by allowing more outsourcing of noncore jobs and will eliminate job classifications that require higher staffing levels. Greater flexibility will be allowed in managing skilled trades workers by letting them work on more than one type of job and will permit work schedule changes—such as adding shifts or changing to a 4-day week if competitive pressures require it.

There will be agreement on the use of more variable pay for employees based on company or group performance. Cost-saving sharing plans (e.g., Scanlon plans) and gain-sharing plans will be common in defining bonuses and incentive pay.

There will be relatively little negotiating over classic legacy costs (e.g., health-care obligations for retirees, pensions, etc.) since companies, wanting to shed the crippling costs of these programs will, with the union, have formed trusts to assume management of the programs. Companies will have agreed to make one-time payments into the trust to partially or fully fund it. Committees consisting of union appointees and independent members (agreed to by the company and the union) will manage the trust assets and maintain the benefit programs. This will improve the prospects for cooperation on more immediate work process and pay issues.

Relations With Employers

As more cooperation and mutual interests have emerged in negotiations, unions and management will also find it to their benefit to work together in protecting their broader interests from hostile takeovers by other firms. Adversarialism will be put aside and the parties will cooperate to reduce the threat of a takeover that could reduce employment, impact the compensation structure of employees, and modify the role, structure, and personnel in management. For example, an early illustration of this came with the hostile takeover bid for Delta Airlines by US Airways in 2006. The pilots and management put aside their strong differences and worked jointly to forestall the takeover bid.

On the other hand, when there is little hope of saving a bankrupt company, unions representing employees in the bankrupt firm will work cooperatively with prospective buyout companies so that the union members are able to keep some jobs. For example, when the International Steel Group offered to purchase the assets of bankrupt Bethlehem Steel Corporation in 2003, the Steelworkers Union backed the buyout and worked cooperatively with International even though the deal called for significant job cuts and streamlined benefits for the remaining employees. Otherwise, Bethlehem, burdened by extensive debt, would have simply gone out of business and there would have been a total loss of employment.

Outside of the negotiating process, companies and their unions will have moved more toward improving internal communications, creating more transparent decision processes, and making an effort to draw upon workers’ expertise by forming management-labor committees to tackle relevant operating, quality, and customer service problems.

For example, in the airline industry, worker-management committees will focus on items such as fuel savings, baggage processes, and customer service improvements.

Conflict, Strikes, And Pressure Tactics

Even with the increased emphasis on cooperation and the mutual interests of unions and management in 2025 labor relations, differences in priorities and expectations will remain in the range of issues covered in negotiations. If problem solving and mediation fail on a serious issue, the parties will resort to power tactics to pressure their opponent to concede and/or compromise.

The classic confrontational power tactic that has been used by the union is, of course, the strike—a withdrawal of services by union members. As has been noted earlier in this research-paper, strike activity in the United States was at historic lows during the early 21st century. While the strike will continue to be a possible coercive weapon, it will remain at very low levels of use. Indeed, the strike will simply not have the economic power that it once enjoyed to pressure the employer. Employers with global operations may draw more heavily upon their international units and can function quite satisfactorily even though their American unit(s) may be idled. Also, employers will simply hire replacement workers to continue operations in many cases. In short, the strike will not be an effective weapon to coerce the employer in many cases.

In 2025, the pressure tactics employed by unions will focus more on the use of corporate campaigns and other actions to affect the image, market, finances, and resources of the target company. There will be international advertising campaigns pointing out the target company’s perceived misdeeds, unfair treatment of workers, lack of concern for the community, and so on to undermine the company’s image and standing in the broader community. Unions, through their community-based coalitions, will rally religious groups, social welfare groups, social service groups, and so on to condemn a company and its position. They may call for boycotts of company goods and services. Unions will use their financial clout with their large pension and health-care funds to induce financial institutions—that is, threaten to withdraw these funds—to, in turn, put pressure on employers to meet the union demands. Unions will attend shareholder meetings and introduce resolutions to bring public and shareholder attention to labor-relevant issues or inequities in the employer’s actions. Also, labor organizations will employ civil disobedience tactics in some cases to create newsworthy events and embarrass the company.

While the classic strike action of total withdrawal will not be effective in many cases in 2025, unions will, when pressed to take action, use short-term and limited withdrawal job actions such as CHAOS (Create Havoc Around Our System). This maximizes the impact on management and minimizes the risk to employees. For example, in the airline industry, this could mean that the flight attendants would conduct a short mass withdrawal of services (i.e., 15 minutes), or simply strike certain flights, specific cities, certain gates at an airport and so on with no advanced warning to management. The short focused action will create significant problems for management and the system while minimizing the prospect of replacement workers or actions against specific employees.

Concluding Comments

This research-paper began with a brief review of the basic nature of labor relations in the United States. It was shown how labor relations has transitioned from a dominant factor in American economic activity in the mid-20th century to a much less significant role in the early 21st century. Several important trends were identified (including globalization, demographic changes, the shift in industry and employment structure, and growing disparity in income, and loss of benefits of American workers) that will likely affect the future of labor relations in the United States. These trends, and the responses to them, will enhance the prospect of union organization and will increase the importance of labor relations by 2025. The union movement will be consolidated structurally and more integrated with the community. Labor organizations will take on a broader role as both a business union and an agency of social change and justice. They will focus on organizing a diverse workforce in both low-level and professional service jobs using the promise of worker voice, working through community coalitions, using technology, and being providers of worker benefits. They will create workable linkages with foreign unions on a global scale to deal with transnational firms. Relations and negotiations with employers will emphasize cooperation and mutual interests, which should lead to more competitive positions for American firms. When significant differences occur, the strike will not be the weapon of choice, but the emphasis will be more on corporate campaigns, community pressure, and short-term disruptive tactics.

These projections, of course, are based on extrapolations of identified trends and specified assumptions about changes in institutions. How much of what has been predicted will actually materialize in 2025, will, obviously, not be known until that time. However, these projections can serve as a basis for discussion and analysis of an important economic and social institution and the role it will play in the future.

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See also:

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