Labor's Enlightened Self-interest

September 05, 1994

Even as the socialist world inspired by Karl Marx hovers on the verge of oblivion, a new relationship between workers and their employers has gained momentum. It's too early to call it populist capitalism, and indeed it may never earn that label. But on this start of the second century of Labor Days, one of the more hopeful signs on the economic horizon is a growing sense on the part of organized labor that cooperation, rather than confrontation, can bring greater benefits to its members and enhance this country's prosperity.

Most conspicuous in this development is the airline industry, once one of the most hidebound and contentious in labor-management relations. Rather than see the deregulated airline companies slip into bankruptcy -- or to help them get out of it -- in the face of fare-cutting competition, the pilots, mechanics and flight attendants unions have agreed to reduce costs by lowering wages and easing work rules.

It doesn't always work. One of the earliest airline employee "givebacks" was an attempt to rescue Eastern Airlines that ultimately failed. In other industries the record is similarly mixed. It's not unusual for employee buyouts to turn a business around in the first enthusiastic years but founder when the same economic realities that caused initial problems resume eating away at profits.

Employee stock ownership is not a new phenomenon, nor is it confined to the airline business. In perhaps 10 percent of U.S. companies employees own a significant amount of stock. But it's generally a tiny proportion. According to one study, in only 250 large companies do workers own as much as 20 percent of the stock.

Still, replacing confrontation with various forms of cooperation in mutual interest appears to be taking hold. One example is the automobile industry, where the lines between workers on the factory floor and supervisors are increasingly becoming blurred. In the industry's struggle to recover from the inroads of Japanese competition, it has empowered workers to use their own judgment, often to perform supervisory tasks once jealously limited to management. Another is the recent decision by one of Baltimore's port unions to give up costly jobless benefits in order to shrink the labor pool through a worker buyout program.

None of this adds up to a death knell for organized labor. Its traditional role is shrinking, in part because of its past successes. But even as the U.S. worker gives up his grimy factory clothes for the sterile garb of high-tech industry, the labor-management relationship evolves as well. How smoothly that transition goes will have a considerable effect on the future prosperity of this nation.

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