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.
6. Unions are obsolete. When workers labored 60+ hours a week in dimly lit factories and dust-filled mines, lived in whatever housing the company deigned to provide, and struggled to pay for necessities bought at the company store, the balance brought to the employment relationship by the collective representation of workers in a union was justified. That was then. Today, federal and state laws govern workplace safety, hours, and discriminatory termination. These laws apply equally to union and non-union personnel. All wear the same safety equipment for outside work and use the same high-tech equipment for inside work. Good workers, whether they’re climbing poles, installing connection boxes, or serving as call agents, are paid substantially above the average wage in their locales. If ever there was a purpose for unions in telecom, it’s long been served. Today, unions are anachronisms — rotary dialers in a digital world.
7. Unions have no valid arguments for their continued existence in telecom. In desperation, militant union members are resorting to violence and reverting to their simian forebears. Midway through the CWA/IBEW strike, Verizon obtained a court order prohibiting the strikers from, among other forms of assault, “throwing feces.” You know your opponent has lost the moral and intellectual high ground when a bout of constipation puts a dent in its arsenal.
8. Unions are out-of-sync politically. Most unions are highly dependent on the favoritism of Democrat politicians. But in today’s frail economic environment, even many Democrats struggle to justify special treatment for a well-paid constituency that whines for entitlements while so many other constituents are standing in line at the unemployment office.
9. Unions deceive their members. One Verizon cross-over told me how the union kept workers in the dark about the situation. Pre-strike, it delivered a few select tidbits of misleading information, lied about the company’s proposals, and assured her that the company would cave after a day or two of striking. When it was obvious that Verizon was not going to yield, she came back to work (in a right-to-work state) and learned the truth from earlier cross-overs. “I’ve never had a job before where I didn’t contribute to my health insurance,” she explained. “I thought the company’s position [proposing a modest contribution] was reasonable.”
10. Unions are self-destructive. Armed with information about customer accounts, union members called Verizon call centers during the strike and pretended to be customers, attempting to cancel service. Union members protested the award to Verizon of a $120 million contract with New York City’s Department of Education. Some even picketed at a Verizon customer’s home during a service call. How long will telecom unions survive if they destroy the customer base that provides their members with jobs?
Not long. Indeed, that great sucking sound you hear is the quicksand enveloping the union dinosaurs as members and the public discover their pointlessness in the modern telecommunications industry.
Samuel R. Lewis is an assistant general counsel for a global telecommunications company. He writes commentary on current, past, and future events based on his diverse experiences as a former U.S. Army officer, parent, and participant in some of the most tumultuous events of the past 20 years in the business world.