VII. EMPLOYEE VOICE IN THE ANGLO-AMERICAN WORLD: CONTOURS & CONSEQUENCES

Discussion

Thomas A. Kochan
Massachusetts Institute of Technology

    My assignment in this project is to look across these studies and discuss the role government policy plays or should play in providing employees a voice and representation at work and in employment relationships. There is a lot we can learn from the rich comparative data provided in these papers. I have not seen a more helpful and more comparable body of data on this topic since the publication of the Industrial Democracy in Europe studies conducted in the 1970s (IDE 1981). So I am delighted to comment on the implications I draw from them.

Why Should Governments Care?

      Before we ask what governments should do, we need to ask why governments in democratic societies and free enterprise economies should care about worker voice, and particularly, about the declines in unions, the major instrument of worker voice of the twentieth century. Let me suggest four reasons.
     First, the decline of unions diminishes the quality of our democracies. That is why freedom of association and the right to engage in collective bargaining has been recognized as a fundamental human right for all workers by United Nations (Freeman 1999). Democracies thrive when a plurality of interests engage in political discourse and have to achieve a balance across their respective interests. When workers lack an effective voice in political debates, important questions are not asked, assumptions are not challenged, and options are not considered that are vital to the interests of workers and their families. Although things have not deteriorated to this point in most of the countries in this study, they have in the United States. This was most clearly visible in recent presidential elections. Labor issues, and indeed all workplace issues, were downplayed or avoided by even the Democratic candidates for fear of fomenting "class warfare" or being viewed as in the pockets of a "special interest." The separation of Britain's New Labor Party from the British labor movement is a lesser example of the same phenomenon.
     Civil society also suffers as labor gets marginalized. In the United States today there are no major national forums for labor and business and government leaders to discuss issues of national importance or to build the personal bonds that can be called upon in times of crisis. So when the national crisis triggered by the September 11, 2001, occurred, the administration in power rejected the suggestion that business and labor leaders be called on to work together as they had been in past crises and wartimes.

     There is another even more basic reason why democracy is diminished when workers lose their voice. Workers want a voice at work! Every survey that has asked questions about this since the birth of the behavioral sciences (at least as far back as the Hawthorne Studies) has documented this fact, as do the surveys reported in these studies. The existence of a "representation gap" observed in each of the surveys means that these societies are not supplying as much voice as workers want.
     Second, decline in worker voice means a decline in the power of workers to gradually improve wages, hours, and working conditions in ways that historically has helped move working families into the middle class. A simple comparison in the United States makes the point. From the 1940s through the 1970s General Motors was the largest employer in the United States. It and the United Auto Workers set the standards for improving wages and benefits that other companies in its industry, and to a lesser extent across the economy, were then pressured to match or follow in some fashion by other unions and by labor market competition. Today, the absence of a similar countervailing power at Wal-Mart, the current largest employer in America, has the opposite effect. As we have seen in recent retail negotiations, Wal- Mart has set in motion a downward spiral to meet its lower wage and benefit standards. The same is true as unions have lost membership density in industries as diverse as telecommunications, airlines, trucking, auto supply, and meatpacking.

     Third, not only have average employment standards stalled or declined, inequality in wages and benefits has also increased as worker voice has declined. It has been a quarter century since Freeman and Medoff (1984) demonstrated that unions reduce inequality. Thus, it should not be surprising to see inequality has increased by most measures in the United States over the past twenty-five years as unions and union power have declined.

     Fourth, a modern knowledge based economy requires a high level of trust and cooperation at work. Teamwork, networking, information sharing, high levels of commitment, and good customer service cannot be built and sustained if the workforce is frustrated, tense, and lacks trust in management or in each other. Thus, it is not just worker voice per se that society has a stake in supporting, but a workplace climate and set of relationships that support high trust and cooperative relations among employees and among employees, supervisors, professionals, and executives that can solve problems and improve customer service and productivity. Thus, governments cannot be agnostic as to the forms of employee voice that evolve in their societies. A government that lets the raw swings in power to dictate the amount and form(s) of worker voice and representation is destined to pay the price in an underperforming economy and high-conflict/low-trust employment relations equilibrium.

    Some skeptics might ask whether government policy has anything to do with worker voice. Is there not a market for labor that would allow those workers who want a voice find jobs that offer it and avoid those that do not? Also, in an economy where labor is subject to international as well as domestic competition is not the decline in labor's power and worker voice simply the consequence of an increase in competition in the labor market? So would government policy make any difference?
      These are fair questions. There is no doubt that government policies enacted in the first half of the twentieth century in Canada, the United States, Australia, and New Zealand supported union growth. There is also equally little doubt that the Thatcher policies in Britain in the 1980s and the dismantling of the arbitration systems in New Zealand and in Australia in the 1990s contributed to union decline in those countries. Although it is more difficult to show cause and effect, there is also no doubt in my mind that a significant portion of the decline in unionization in the United States in the past quarter century is due to the inability of workers to gain union membership in the face of employer illegal and legal opposition tolerated by the lack of effective enforcement and remedies of illegal conduct found in the National Labor Relations Act. So it is clear that, at least historically, government policies have, at different points in history, acted to strengthen and weaken unions. That experiment has been run. We have yet to run the alternative experiment over whether governments can influence a restoration of worker voice that is well matched to the needs of the modern workforce and economy. Below I will outline the principles that I believe should guide the design of that experiment.

What Can Governments Do?

     [H]aving considered the security screeners' critical role in national security, I have concluded that collective bargaining would be incompatible with national security interests. I have therefore issued an order today that precludes collective bargaining on behalf of screeners.
         Letter from Admiral J. M. Loy, Under Secretary of Transportation, to airport screeners, January 9,          2003.
     It is clear that governments can make the problem worse by taking actions that further weaken worker voice and/or increase the adversarial climate in a country. The Bush administration chose to do this in its first term. Among other things it ended labor-management partnerships in the federal sector and in construction. A more blatant example is embodied in the above quotation taken from the head of the Transportation Security Administration to airport security screeners explaining why the government unilaterally took away their rights to collective bargaining. Apparently, this administration's labor policy is to either promote adversarial labor relations or, where it can, eliminate independent representation entirely. This is the wrong direction for policy. The Howard government in Australia may be moving in a similar fashion. The other countries included in this study continue to have labor movements and political party coalitions with sufficient power to limit such actions. But these examples point out that government can indeed do serious harm to worker voice and representation.
      Just as governments can do harm, I believe they can also do good. Let me suggest four principles for a modern policy to support worker voice and representation, each of which is suggested by the evidence presented in these studies.

     1. Allow a Variety of Forms of Representation to Coexist in a Complementary Fashion. A dominant theme in these papers is that the diversity of preferences and needs of employees and workplace characteristics gives rise to the need for different forms of voice and representation. Prior generations of industrial relations scholars were fond of saying and writing that the economy and workforce were too diverse for a one-size shoe to fit all. They used this metaphor to argue why collective bargaining made more sense than government regulations of employment conditions. They argued forcefully that parties closest to the problems of the workplace could fashion solutions that best fit their particular needs. Although this is as true today as ever, today's diversity takes us a step further in suggesting that no single form of representation fits all needs. So collective bargaining and union representation in its traditional form are still needed and wanted in some circumstances and need to be available as options. In addition, the workforce is asking for complementary forms of participation and representation that promote cooperative approaches to problem solving and in some case direct, individual approaches to dealing with workplace issues. Governments in all countries in this study, but the United States seem to accept this principle and have taken various steps to allow alternatives to emerge. It is time for the United States to learn how to do this as well.
     This principle is more controversial then it may seem at first glance, especially in the United States. Union leaders fear competition. Mangers fear multiple channels of representation and, at least in the United States, prefer to retain unilateral authority to decide on the form and scope of participation and/or representation at "their" workplaces. Yet this is what workers are and have for years been saying in these surveys„one size shoe does not fit all!
     The central challenge in allowing multiple forms of voice and representation to evolve lies in making them serve as complements rather than substitutes. These data suggest that collective bargaining and consultative forums such as works councils, sectoral councils, internal responsibility systems, and more direct forms of employee participation can indeed complement each other. Two conditions appear to be necessary for this to happen. First, labor representatives need to engage in these different forums and processes in a proactive fashion and develop the skills and capabilities needed to make them effective. The authors of these studies reinforce a fact that is already well understood, from prior studies of the relationship of unions and works councils in Europe Rogers and (Streeck 1995; Turner 1998). Second, management must be kept from using them to undermine or avoid unions. This leads us to the second principle.
     2. Enforce Employee Choice and Mute Employer Opposition to Representation. In a democratic society, employee freedom of association should mean just what it implies. Employees should be the ones to choose whether and how to be represented free of coercion by employers (or unions). This is a tall order, more so in the United States than perhaps in other countries where, as these papers indicate, employer opposition to unionization or other forms of voice and representation is more muted, either by the political culture of the country and/or by more vigorous enforcement of labor law.
     These studies clearly show that the United States is the outlier in terms of government policy, employer opposition to unions, and the relationship of union and non-union forms of voice and representation. Other nations have succeeded in creating an environment in which worker rights to unionization are respected and enforced, employer opposition to unionization is muted or more moderate, and union and non-union forms of representation are complements rather than substitutes. Moreover, with the possible exception of Australia, none of the other countries have government policies that are actually producing greater adversarial relationships at work at the moment as has been the case in the United States under the first Bush administration.
     3. Promote cooperative forms of voice and representation. The data from these studies show not only that employees prefer cooperative over confrontational relationships at work, they see strong and effective union representation and cooperative relationship as mutually reinforcing and effective. Several of the papers, particularly the Canadian and New Zealand papers, suggest that the combination of union representation, works council or informal participation, and effective human resource management is the most effective combination. The Canadian policy of promoting sectoral councils along with internal responsibility systems for monitoring and enforcing safety or other workplace policies and employee rights provides a useful model. Even in the United States, as David Weil (2004) has shown, unions can enhance the enforcement of statutory rights. Moreover, two decades of research on high-performance work systems in union and non-union settings have documented the economic benefits associated with "high-performance" or "knowledge-based" work systems that include opportunities for workers to have a voice in how work is done (Ichniowski et al. 1996). If we add effective due process and dispute-resolution processes to this mix, the package becomes even more complete.
     In summary, the data in these studies reinforce a fundamental and enduring principle of industrial relations that has guided labor and employment policy in most democratic countries for many years. Employment relations are inherently mixed motive in nature (Commons 1932; Walton and McKersie 1965) and, therefore, we need a balance in which employees have a voice to express their interests and to negotiate compromises where they conflict and pursue cooperative, mutual gains solutions wherever possible. Respect for the former increases the scope and potential effectiveness of the latter. Rejection of the former makes the latter impossible or a sham.
     If governments take the steps proposed here will they close the representation gaps observed in the data reported in these country studies? Would they provide the mix of voice and representation best suited to the needs of the today's workforce and economy? Standing alone, I believe the answer is no. My simple reading of history suggests that this will only happen if unions and professional associations embark on a complementary set of changes to modernize their recruiting and representational models to provide a variety of services, support cooperation, increase the reach of unions to young workers and employees in smaller establishments, and provide for a continuity of membership services as employees move across jobs, in and out of the labor force, and through their career and family life cycles. Thus, I would add a fourth principle to those listed above that is also suggested by the data from these studies.
     4. Encourage unions/associations to develop new recruitment and representational models better matched to the needs of the modern workforce and economy. Today's workers, as the data from these studies show, are at least, perhaps more, instrumentally oriented in their approach toward unions than workers of prior generations. Ideology will not lead many to organize. Relying on dissatisfaction as a motivating force to join unions will narrow the band of potential union members to the most disgruntled and disenfranchised. Unions need to provide a positive vision, strategy, and set of services that workers see as valuable and as effective.
     The data are especially clear on one point. Unions need a recruiting strategy that in fact reaches a larger number of unrepresented members. The biggest reason most workers do not join unions in all these countries is not employer opposition, not an aversion to unions, but the fact they are never asked or given an opportunity to do so! In part this reflects the outmoded organizing model of unions. It is most problematic in countries like the United States and Canada that continue to adhere to an exclusive representation, majority rule model of representation in which it takes a 50 percent majority vote or indication of support to bring representation to one additional worker. Moreover, by tying membership to a specific place of work, this same worker may need to be reorganized several times in his or her career. So unions and associations need a recruiting and representational model that allows individuals to join and to retain their membership for their full working lives, even as they move across jobs or in and out of the labor force (Kochan 2004).
     If unions are to have a future they will need to invest in strategies to reach younger workers and workers in smaller establishments and then to hold onto them when they move to other jobs. To do so they will need a mix of social capital, service (instrumental), professional networking, and community union models. The days of relying on dissatisfaction and protection from lousy employers has reached its end.

Will This Happen?

     Will the mix of government actions and labor union strategies needed to restore worker voice and close the representation gaps happen? I think the answer will vary across the countries in these studies. As the authors point out, and as has been documented before (Bruce 1989), public policy changes on labor issues are easier to achieve in parliamentary systems like those in all the countries other than the United States. Moreover, Ireland and the United Kingdom have the European Union as another transnational government forum in which policies like the European Works Councils and other social and economic directives serve to discipline domestic politics and employer behavior. Thus, we are likely to see more incremental expansions of worker voice and acceptance of alternative representational arrangements in these countries than in any of the others in the study.
      As the consistent outlier, however, the United States is not likely to follow suit without a cataclysmic set of events that produce a shift in the political environment, government, and union strategies and structures. If we do wait for such a day of reckoning, the task of building more cooperative forms of workplace representation that still maintain their independence will be all the more difficult. Out of such crisis would likely come a more adversarial and militant form of union strategies than what the economy and the workforce need and want. I hope the United States does not wait. It would be better to get on with the task now than to have to pick up the pieces later.

References

Bruce, Peter G. 1989. "Political Parties and Labor Legislation in Canada and the U.S." Industrial Relations, Vol. 28, pp. 115-41.

Commons, John R. 1932. Institutional Economics. New York: MacMillan.

Freeman, Anthony G. 1998. "ILO Labor Standards and U.S. Compliance." Perspectives on Work, Vol. 3, no. 1, pp. 28-31.

Freeman, Richard B., and James L. Medoff. 1984. What Do Unions Do? New York: Basic Books.

Ichniowski, Casey, David Levine, Thomas Kochan, Craig Olson, and George Strauss. 1996. "What Works at Work?" Industrial Relations, Vol. 35, no. 3, pp. 3-21.

IDE. 1981. Industrial Democracy in Europe. Oxford: Clarendon.

Kochan, Thomas A. 2004. "Restoring Workers' Voice: A Call to Action," in Julius G. Getman and Ray Marshall, eds. The Future of Labor Unions. Austin: Lyndon B. Johnson School of Public Affairs, University of Texas Press, pp. 47-70.

Rogers, Joel, and Wolfgang Streeck, eds. 1995. Works Councils: Consultation, Representation and Cooperation in Industrial Relations. Chicago: University of Chicago Press.

Turner, Lowell. 1998. Fighting for Partnership: Labor and Politics in a Unified Germany. Ithaca, N.Y.: Cornell University ILR Press.

Walton, Richard E., and Robert B. McKersie. 1965. A Behavioral Theory of Labor Negotiations. New York: McGraw Hill.

Weil, David. 2004. "Individual Rights and Collective Agents: The Role of old and new Workplace Institutions in the Regulation of the Labor Market," in Richard Freeman, John Hersch, and Larry Mishel, eds., New Workplace Institutions for the 21st Century. Chicago: University of Chicago Press, pp. 13-44.

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