“During the 1980s and 1990s, the AFL-CIO executed a stately, slow-motion collapse”, wrote Brecher and Costello (1998, p. 25). Strikes ended in defeat. Between 1977 and 1995 work stoppages decreased by 88%, from a peak of 3,111 in 1977. Membership decreased from 35% in 1974 to 14.% in 1997 (Mantsios, 1998; it went down to 10% in the private sector according to Nissen and Rosen), and real wages decreased by 15% between 1973 and 1995.

As losses increased and the crisis intensified during those years, unions searched for answers to the socio-economic changes affecting the conditions of work and family and for strategies to reverse the crisis. As immediate solutions they pursued internal reforms and explored strategies to expand membership (Turner and Hurd), under the dictum of “power in numbers”. They recognized that, the causes for the plight were to be found, both within the unions as well as outside the unions.

Internally, unions pointed to such factors as their narrow concerns for short-term wage increases, submitting to corporate demands without opposition, accepting corporate rationality too readily, aligning to political and business interests to the detriment of alliances with the community and non-union workers. These internal factors became known as “pragmatism” or “business unionism”. Externally, unions blamed the crisis on changes in the industrial and management structures from national/international systems to global interests and structures, accompanied by the profit motive. In short, external causes for the crisis were blamed on globalization (Mantsios, 1998).

Business Unionism in the US and in Germany

“Business Unionism” or “Pragmatism” that is, the alliance of unions with corporations to the exclusion of non-union workers, is usually seen as an American phenomenon. While structure and circumstances, particularly the relations between unions, corporations, and non-union workers, differ in Europe from those in America, European unions experienced the same ups and downs, during the same periods, as did American Unions. Circumstances differ, but the exploitative results are the same in Europe as they are in America. The expectations that the European-wide industrial union structure, based on European integration, would create strong bargaining relationships (Banks, 1998) has been disappointing; it has not saved European unions from the same fate of loss of power as experienced in America.

The purpose of describing US business unionism in comparison with German business unionism, rather than US business unionism on its own terms, is to show that business unionism was practiced in other parts of the world at the same time it was practiced in the US. It was a global phenomenon, a phenomenon that was convenient for and controlled by business, not by unions.

1.United States

Under business unionism, from the early 1950’s to the early 1970’s, workers aligned themselves with the interest of capital under the assumption that, if capital is strong labor will benefit. The business unionism perspective could also be called the “trickle down theory”, that is, if capital flourishes profits will trickle down to the union members. Mantsios (1998) characterized the alignment of unions with business as self-centered isolation. That meant that unions were concerned, above all, with immediate and practical matters, mainly with their concern that industry and union abide by the union contract and its various concrete demands. In the political realm, they were only concerned with issues that affected union members rather than all workers in the industry. At the most basic level unions and its members accepted the idea that they were living in a “just society”, that the economic and political orders were fair and democratic. On the international level unions were staunch opponents to Communism and supporters of the Cold War, unaware that they were building the infrastructure for the global economy, that is globalization. As a consequence, it made it profitable for industry to globalize.

Among several, there are three important and far-reaching consequences to this type of unionism. One, labor movements become introverted and self-interested, they become isolated from family and community needs. Two, they ignore the characteristics of the cyclical nature of capitalism that define the differential treatment of unions by industry and business. At the time of the expansion of a business cycle, workers benefit relative to the benefits of the capitalist class; at times of the down turn of a cycle, industry and business produce major cost savings at the expense of union member and workers by way of salary decreases and reductions in the size of the labor force. Three, unions mistake the symptoms for the causes of the socio-economic conditions of capitalism.

2. Germany

Articles and studies about the current situation and conditions of the recent past of the unions in America, has often been compared to the development of the unions in post WW II Germany. While American Unions in recent times were seen as loosing power, many have argued that German trade unions are still strong, that they are participating together with government and industry in decisions concerning the national economy, that unions are financially secure, having achieved the highest percent of real wages among the nations of the world; that German union shave remained powerful.

Bergman and Muller-Jentsch (1975), however, argued that these views missed the point in that the characteristics enumerated expressed weakness rather than strength. For, basically, the combined decisions of government, industry and trade unions were made in the context of careful consideration as not to endanger economic growth nor the nation’s economic capacity, terms favoring the employers and the powerful.

True, wage gains were registered during the 1950’s, but they were due to economic growth (as it was in the US); they were not the result of union activism. Economic growth in Germany was due to the nation’s productive capacity, which the war did not destroy, the abundance of qualified labor, the tremendous influx of immigrants (taking up low paying jobs), and national and international investments geared to stem communism.

But even during times of economic growth in post war Germany, when unions supported the political structure, Government, the third member in this “collaboration, sitting on the negotiating tables with industry and unions”, did not side with the unions in conflicts between labor and management. While government openly, in public, proclaimed unions as partners of the economic wonder, it pursued, parallel to open negotiation, a backroom policy of “moral persuasion” over unions (Muller-Jentsch), admonishing them to submit to the claims and demands of corporations. Often Government persuaded unions to take reductions in wages and not to go on strike, by asserting the priority of price stability against inflation, and to actively participate in the stand against the “threatening” East. These policies were accepted, in part, because of the immediate material benefits it provided, and in part because of the experience of Nazi destruction of labor unions, which had led to the view that labor unions could form and function only within democratic orders. These experiences, views, interests and practices came to be formalized and institutionalized in the Dusseldorf program of 1963. The program finalized the stance of the unions’ conformity with the, then, existing economic order defined by J. M. Keynes and accepted in Germany by owners of industry and corporations and workers alike as “Bible” truth.

In short, with the expanded opportunities of rebuilding a nation, government and industry astutely sought the peaceful cooperation of skilled labor. To assure that cooperation from the unions, government and industry provided concessions and it provided an ideology, or frame of thought that made sense to the workers, given their historic circumstances. But, even at that time government and industry did not concede power to the unions. From the beginning, in 1952 with the establishment post WW II unions, the hierarchical structure of owners, managers, and workers remained intact and never changed.The evidence is quite clear on this point.

The law of 1952 established “works councils” as intermediaries between labor and management. Works council members were elected by all employees, not only unionized workers. They were the legal representatives of all the employees in an enterprise. Often, members of works councils were relieved of work to become full-time administrators; in other words, they were co-opted into the management structure and expected to be loyal to that structure.These techniques were used to withhold from the unions their right to represent the interests of their union members. In addition, the rights of co-determination of works councils were subject to “trustful co-operation” “for the welfare of employees and enterprise”, bound to “peace obligation” and, thus, were barred from resorting to “measures of labor conflict” (Bergman and Muller-Jentsch, pp 248-249).

A case in point is the union works councils siding with management to cut the Opel (or GM) work force in Russelheim by 4000 jobs.The works council at Opel, supported by the works council at IG Metall, voted for the cut. The President of Opel’s works council said that he regretted the cut, but “the new plant was the only correct option (“German trade unions vote for job cuts”, June 18, 1999).

Through the alliance of industry, government and the works councils, industry secured maximum labor efficiency, while, at the same time, safeguarding itself against labor unrest and work time losses (Georgi, D. 1972). Just as the works councils limited the power of the trade unions and severely inhibited the negotiating process (Barkin, S. 1975), so did the well regulated bargaining system limit the power of unions to negotiate higher salaries and better working conditions. For, the negotiated contracts were so vast, applied to so many different economic conditions that they did not tap the available resources. The controlled decision making structure of German or “Cooperative Union” resulted in the formation of a passive union membership.They lost the strength and vitality of unions that have active and exclusive relationships with the members they represent.

The loss of strength of German unions in recent times has paralleled that of the decline in power of the American Unions. Currently, Germany has about 36 million gainfully employed persons; of these 89.3 are wage and salary earners, that is, employees.The largest union in Germany is the Deutscher Gewerkschaftsbund (DGB); it counts with 8.04 million members (GermanInformation Center, 2003). Between 1994 and 2001, German unions lost about 1.8 million members (Christian Science Monitor). In addition to the loss of membership, unions have lost political power. Although government is not directly involved in the industry/union interactive relation, Chancellor Schroder, who won his position in great part because of union support, is now openly advocating a “No Strike Policy”. During recent times, unions have won no major demand. The unemployment rate has climbed to 19% in 2003 and wage increases have not kept up with inflation (Business-AP, June 2003). And, according to a study by Addison et. al,. works councils have participated in several decision making processes of plant closings (not only Opel -as mentioned previously).

It seems appropriate to allow a 35 year old Opel worker from Bochum sum up the current situation of the unionized workerin Germany (Interview: World Socialist Web Site, August 1998). To the questions on how working conditions have changed in Germany, he answered: stress has increased with the shift from assembly line to “cell production”. The practical difference between assembly line and cell production is the establishment of production quotas for an entire group instead of an individual; but they are set so high that they are impossible to achieve. The widely publicized introduction of team work a few years ago is dead; team discussions about team performance and processes are no longer practiced. What has remained is impossible to achieve group work quotas New workers have been hired, but they are mostly students on a part-time basis.

The worker then voiced his view on theworks council chairman. According to this worker, the chairman has not changed anything in favor of the union; in effect, workers signed a petition asking for his resignation; a vote was taken; he came in third, but continued as chairman, because the works council members over ruled the union member votes.

Concerning a new site agreement, the worker described it as “cuts and more stress”. Pay rate increases were but 1.25%, way less than the increase in the cost of living. Many workers have to work overtime to compensate for the losses. Workers forsake sick time, that is, they go to work being sick or have minor accidents, because employers tied sick time to the Christmas bonus.

Thus, while the socio-cultural circumstances were different in Germany from those in America the process of expansion and retraction has been the same. Just as in America German unions lost membership during the 1980s and 1990s, their working conditions, their influence and power at the bargaining table changed drastically, their wages declined. Actually, this should not come as a surprise to any progressive analyst, for the values/motives of industrialists and economists as well as the economic operating structure is the same in America and in Germany, and, for that matter in all places of the world.

Globalization

According to Figueroa (1998) the economy globalizes when a company of industry integrates financing, designing, producing and marketing a product across several countries or nations. The integration of these corporate functions distinguishes globalization from internationalization which only meant that the same or similar products could be produced in several countries. Globalization was born by the Second World War; internationalization has existed for 200 years, Figueroa argues.

The “new global economy fosters increased concentration of income and wealth among fewer and fewer companies exasperating income inequalities across and within nations”, writes Figueroa (p.308). To achieve their cost reducing goals, which, they claim is due to international competition, they use methods such as relocating industries, outsourcing work to smaller, cheaper, and/or foreign companies, flaunting safety and environmental issues, pitting worker against worker on the national as well as the international level, decreasing wages (or not increasing them despite the increase of the cost of living), reducing the work force and engaging in mergers, while implementing labor-saving technology.

Babson (??) illustrates well the concrete meaning of globalization when he describes the interlocking relations of global companies and their effect on workers in different parts of the world. He observed that the Ford assembly plants were remarkably similar in Wayne, Michigan, Hermosillo and Sonora, Mexico, but the workers in Hermosillo earned only to and hour, twice the amount of workers in Sonora. To assure a profitable business for the company, Ford had secured from the Mexican government that the products of Sonora had to be exported back to the states (100%).

Many other auto makers followed suit. By 1998 GM had grown to fifty border factories; now the five largest auto makers have factories below the border. There are now more than 200 parts factories there, accounting for a growth rate of 1500% since 1974. It is now 2.5 times greater than the counterparts in Canada and production reaches 45% of US levels. Labor cost in Canada was 26% lower than labor cost in the US which come to per hour; in the interior of Mexico the average wage only came to .32 and inborder towns it was only .75..

These global strategies of industry not only exploit labor in Mexico and in other parts of the world and pocket profits from paying less but selling high in the US, these strategies also hurt the American labor force by laying off thousands of autoworkers in the US. In addition, what is not so well known, industries create in Mexico the same havoc that they create in the US. They build factories in the interior of Mexico; then, when border towns were filling with migrants hoping to migrate to the US, industry moved into those towns, laid off their workers in the interior of Mexico, hired border town emigrants and paid them even less than what they paid workers in the interior of the country. This method of moving from community to community, building social and economic structures and then pulling the “means of survival from beneath the community, leaving unemployment and poverty behind, and then moving on and doing the same elsewhere is called “whipsawing”. It is a method similar, but socially more destructive, to those used by early agriculturists. They used the “slash, burn, exploit, and move on” method.

To fully describe union/business relation in the context of “globalization”, it iswell to be aware of the industry’s complex social and political power base. The literature focuses mostly on economic factors and their social effects, and glosses over the fundamental power structure of global companies. Global companies, like national companies, maintain power through wealth, but they do not neglect to actively support their power through interlocking relationships among companies and among power positions in government. Global power is wielded similar to national power, but stronger, through interlocking relations, directorships, board membership, etc. so well described by Domhoff (1967). Descriptions of companies are not easy to follow. Is it GM or Opel, or GM/Opel, or Opel/GM and those options can be multiplied by company/geographic area.

The second mechanism to assure support for their power is to actively influence the dominant value system of the populace. While unions forgot about this strategy, business never slaked in their efforts to lobby and influence. As unions focused on the narrow relationship between union and employer, industry and business was socially and politically active building a support base for its decisions vis-a-vie union demands. In the US such organized business advocates in the local communities are the Chambers of Commerce, the CBIAs, the Lyon Clubs and many others. These organizations build an industry favorable social-value climate shaping the local community’s perception patterns and political decision making. In Germany, shortly after WW II employers founded the Federation of German Industry (BDI) which deals mainly with governments concerning economic issues.The other is the Federal Union of German Employers’ Associations (BDA). This association deals mainly with social policy , collective bargaining, and wage issues (Bergman and Muller-Jentsch). The BDA represents about 80% of all private enterprises, which, in turn, employ about 90% of all private industry. Already in 1971 the BDA consisted of 44 national associations that boasted of 385 state and regional associations.

The New Enemy, Within and Without

1. Within

Today, at these times of worsening gaps between owners/managers and workers, between those in power and wealth and those who depend on the redistribution of wealth, in short, among the classes of a society, most unions have come to realize that the strategy to deal with corporations advocated by “Business Unionism” is no longer effective (Mantsios, ed. and Collaborators, 1998). Yates (1998) and other authors also have argued that any chance for a more equitable distribution of goods between owners and labor, any chance of maintaining the gains won by labor, was irrevocably lost with the social and economic changes which occurred during and after the Second World War. Because of the war, industry had grown strong. The political climate was one of favoring industry to build a world bulwark against communism. Soldiers returning home created a surplus of labor. Many unsuccessful strikes were initiated. Government, as in all Political Economies, sided with and aided employers to establish control. Measures such as the Taft Hartley Act (1947) deleted the gains of F. D. Roosevelt’s National Labor Relations Act. Since then unfair labor practices and refusals to bargain have multiplied without negative consequences for employers. No wonder then that labor accommodated to the business control of their economic lives; at least for the time the economy was expanding and growing.

But, unions are no strangers to change; they can look back and reflect on their own history and achievements. During the latter half of the 19^th century unions formed primarily to oppose the power of employers (Yates, 1998). At those times, labor unions used radical, even violent methods of opposition.These were also frequent at the end of the Second World War. Many of these labor contests ended in concessions from companies and corporations.

Over the past several years, the conviction among union members that union power lies in its association with the non-union workers and with the community movements has grown. To counteract union losses coupled with union isolation, unions have sought strength by turning to the community, a community where millions of Americans and their families are living in poverty, most of which are working people and many of them are union members. Already successful experiments have been documented; inspiring examples of union/community are Baltimore and Stamford (Fine, J. 2000). Focusing on the conditions of the community and its families, this movement includes the related issues of the “living wage” (Reynolds and Kern, 2001) and political activism (Asher, H. et. al.; Simmons, L.), movements that resemble, to some extent, movements of the 19^th century.

These movements’ common concern for the well-being of all workers and their dependent kinin corporates the elements for a systematic, structural change, which includes a “bold vision for economic and political democracy; …critique corporate domination of society and class privileges, …incremental change toward a more egalitarian society” (Mantsios, 1998, p. 57). Even stronger is the statement by Moberg, (p. 23). “If the labor movement has a prayer for salvation …reversing the current growing imbalance of power between workers and employers is necessary”…

While unions have been successful in establishing a number of alliances with communities, a tremendous task lies ahead to build a common base, for the community is neither prepared nor is it waiting for a new message. The community is dominated by the ideology of the corporate class, by consumerism, by individualism, by “everybody can make it, if one works hard enough”. The messages are diffused by the media in all its forms, by business advertisements, by private foundations funding visible community projects, by the powerful techniques of targeted advertisements, by political symbols and policies and by the type of projects it funds in the community. All these techniques are alive and are powerful. The new union message must devise strategies capable of transforming the current ideology; it will not be enough to simply spread the new message. It is like filling a glass of water that is already full, without emptying it first or breaking the glass.

2. Without

As mentioned before, unions have clearly identified globalization as the “enemy without”. They have began to support union activities on the international level, protesting foreign embassies in the US that represent countries where strikes are going. US unions have also started to actively seek alliances with unions of other nations (Figueroa, 1998).They also have changed their approach from the prior somewhat imperialistic attitude towards unions of other nations to one of equal footing. Still, the work of developing international alliances is just beginning; the literature is still advocating education rather than action. Strategies proposed for action need greater focus and precision. Among principal points to be considered are the following.

WW II built the infrastructure for globalization. By 1964 more than 3000 US companies had made large investments in Germany (Barking, 1967). American unions were aligned with these companies. Consequently globalization is not the “enemy” of the crisis of the 1990’s; globalization it is but a strategy of expansion at a time it is profitable for companies to do so.

To better understand that globalization is not the cause of the current labor crisis, it is necessary to clearly distinguish between actors and structures, between processes and causes. Structures are chosen channels of action; they keep action bounds; but they are lifeless, they cannot cause; they are the wires along which energy, generated elsewhere, runs. Owners and Mangers of corporations act, define, limit, expand, hire and fire, take what they think is theirs, distribute as they see fit. And if the wiring is too thin or too sick to have the right amount of energy/cost saving balance, they change the size to the wires. In short, at the bottom of it all still lies the dominance/conflict between groups and classes, of people. The United States is divided by class and the classes stand in conflict to each other, writes Mantsios. The “interests of capital and labor are clearly opposed” (p.56) and believing that the US economy is just is nothing but self-deception. Thus, we must “reject the logic of partnership with corporate America” (p.56).

From the fact that the labor crisis must be traced back, through intervening mechanisms and techniques -such as business competitions, or tax increases, etc.- to actors, groups of people, it follows that workers, union and non-union, accept with employment a state of submission to owners and managers. Max Weber (1922) coined the concept of “Need Submission” to indicate that the basic class structure, that of property owners and non-owners is a structure of power. Workers submit to an unfair economic structure, because of their, and their family’s need, to survive. Submission to such a structure creates personal strain; it needs to be eradicated for radical action to blossom.

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