As America approaches the back-to-school sales and end-of-summer cook-outs of Labor Day 2011, Verizon and representatives of the Communication Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW) are negotiating a new contract following a 16-day strike that ended on August 23.
“We showed Verizon that they can’t push us around,” a union official bragged. In fact, Verizon didn’t make a single significant concession to its original proposal, which included “the same full slate of market-competitive medical benefits that apply to the vast majority of other [non-union] Verizon employees.” Meanwhile, each striking union member lost thousands of dollars in wages that will not be recovered. The union leadership did a superb job of demonstrating why the telecom unions’ demise is accelerating:
1. Unions don’t provide value in the workplace or benefits to members. At Verizon, where less than 25% of the workforce is unionized, union members can readily see that they have non-union peers who are receiving competitive salaries and benefits for similar work — and they don’t have to pay $60 a month for the privilege. When union members get more bang for the buck joining Sam’s Club or Costco than they derive from compulsory union membership, the union is not long for this world.
2. Unions suppress job growth. Antiquated union rules developed during the heyday of telephone monopolies cause Verizon to be less efficient and less competitive in a telecom marketplace where purchasers have choices and unions are now the exception, not the rule. Unions have traditionally been about securing more jobs for their members. But, Verizon is less likely to hire more employees in the businesses where costly unions are involved. The immutable irony is that the existence of telecom unions results in fewer jobs, not more.
3. The wireline business is shrinking fast. Except for Verizon’s fiber optic-based FiOS services, the growth part of telecom and most of the profits are in the wireless and Internet “space,” both of which are almost entirely non-union.
4. Unions are anti-matter in a matter-dependent world. Unions promote conflict instead of teamwork, opposition instead of collaboration. I asked a manager who previously worked in Verizon’s labor relations group what that was like. “Every little thing was a confrontation,” she sighed. It’s extraordinarily difficult for a company to succeed today if a core group of employees within its business maintains an allegiance to a third party that promotes its own agenda at the expense of the progress and success of the company providing the paycheck.
5. Union leaders are clueless. How else to describe a union management that calls a strike when the economy is nose-diving, unemployment exceeds 9%, many of the jobs covered by the strike require no more than a high school education and a strong work ethic, and the units affected by the strike have experienced a significant, irreversible drop-off in business as customers “pull the plug” and go wireless or use the Internet. You have to be a dim bulb to bluff in a game when you’re holding a lousy hand and your opponent can see all your cards.