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Wednesday, 04 July 2007 00:00

Labor unions slowly losing power in U.S.

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When Blue Ridge Paper employees voted to accept the recent buyout offer from the Rank group of New Zealand, union leaders were divided on whether to accept the offer. Union representatives from New York urged workers to vote yes, while the union leader in Canton thought employees could hold out for a better deal.

In the end, workers voted to accept the offer. That decision — and the lack of unity for demanding a better offer — is a testament to the continued decline of union power in this country and a recognition of today’s fundamentally different workplace.

Workers at Blue Ridge Paper Products belong to the United Steelworkers Union. The organization has 1.2 million workers and represents industries ranging from mining to health care and paper products.

But what happened at Blue Ridge is indicative of what is happening to the entire organized labor movement. It is no longer as “organized” as it once was. Workers at the Canton plant voted 299 to 285 to turn down the buyout from Rank. However, union members at the Waynesville plant and Blue Ridge’s four other facilities overwhelmingly supported the offer, and they had enough votes to override the close vote at the Canton mill.

So workers will get to sell their stock in the company for $20,000 and get to keep their jobs. It’s really difficult to say if they made the right move. Blue Ridge CEO Rich Lozyniak pointed out that about 100 paper mills in Canada and the U.S. have closed in the last decade, and that one-third of the employees in the industry had lost their jobs. At least for now, workers here have their jobs and will get a bonus as part of the buyout. That was enough for most of them, as the vote revealed.

But a look at the dollars in this deal also leaves many thinking that workers did not get what they should have. Employees agreed to a 15 percent salary cut in 1999 when they became part-owners of the company. They also agreed to a seven-year salary freeze and other concessions that were worth about $160 million. The total value of the employees’ stock is about $33 million. The venture capital firm KPS invested $33 million and will walk away with $88 million. It’s apparent that KPS did much better than the employees.

A strong, unified union might have made the difference. That, however, might be too much to ask for in this day and age. In the mid-1950s, one-third of all workers in the U.S. belonged to labor unions. Today, the percentage is just 12 percent, and when you exclude government workers the percentage drops to just 8 percent.

It’s not too difficult to see why unions are on the decline. For one, at the national level they went through a period in the 1970s and 1980s when leadership power struggles and corruption scandals turned many against them. They have also become victims of their own success. Workers today have many benefits that would have seemed extravagant when unions began gaining strength in the early 1900s. Those wages and benefits drove up the cost of goods, and now there has been a massive reduction in manufacturing jobs in this country because it became much cheaper to make things overseas. As manufacturing jobs were lost, unions lost membership and clout.

In some ways that’s too bad. Blue Ridge Paper has been a prime example of what unions can do for workers. For decades the Canton and Waynesville mills have been among the best-paying manufacturing employers in the region. Though the union was divided on this buyout, it traditionally has done a good job for its members.

It remains to be seen if this buyout will turn out well for the workers, but most are optimistic. What we’re not optimistic about, however, is that this union and others will survive the changing landscape of the U.S. economy.

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