Rebuilding Workforce Power

Pam Sornson, JD

Pam Sornson, JD

March 21, 2023

Economic recovery and growth for all are – or should be – the fundamental goals of the emerging global workforce landscape. However, in many countries, the ‘status quo’ of shareholder/business owner dominance over all economic decision-making remains in place, even though it erodes the capacity of the workforce and threatens to derail the rebound and recovery process.

Instead, organizations of all sizes might consider embracing a more equitable corporate management structure that encourages and adopts worker input as a critical element of leadership strategy. The shift in perspective doesn’t just improve workforce conditions in general; it is also a more viable path to true economic recovery for the greater community.

 

Strategic Declines

Economists have tracked the rise and fall of worker power over the past ~70 years, as post-war industrial activities triggered union growth, and subsequent corporate evolutions suppressed those efforts.

In 1964, union membership in America was at an all-time high, with union participation in the Midwest and West Coast states averaging more than 33% of all workers. Union membership offered significant benefits for all participants:

It held wages steady through shifting economic times;

It helped to reduce wage gaps among workers, especially between men and women and whites and people of color;

It assured better working conditions and safety protections on the job, and

It often offered better paid-leave opportunities than those received by non-union members.

The primary power of that workforce voice was to influence where and how the company invested its resources. Maintaining a capable and confident labor force was deemed a priority, so corporate leadership focused as much of its attention on those values as it did on other enterprise activities. Consequently, company revenues were distributed more equitably throughout the workforce, a reality that drove the growth and success of America’s middle class.

By the 1970s, however, the perspective that encouraged worker satisfaction was changing. Company owners and shareholders were working to erode the standards established by union demands and often used nefarious tactics to accomplish those goals:

Union activists were often fired from their jobs to remove their influence from the general workforce.

Corporations introduced ‘captive audience’ (mandatory) meetings to promulgate views opposing worker rights, often using veiled threats of unemployment and firing if employees balked at their assertions.

The emergence of a ‘union avoidance’ consulting industry throughout the 1970s demonstrated the popularity among business owners of efforts to limit worker power.

By the 1980s, complaints about unfair labor practices had grown more than seven times over that number in the 1950s.

The primary reason why these evolutions away from worker power were so successful is that the country’s laws facilitated those actions. From the 1940s through to the 1970s, several laws favoring employers over employees were enacted; it wasn’t until the 1970s, however, that businesses began pursuing those legal remedies:

The 1947 Taft-Hartley Act authorized the National Labor Relations Board (NLRB) to prioritize defending lawsuits against unions for their ‘secondary activities,’ such as cases involving illegal terminations of labor organizers.

Laws designed to protect workers frequently had ineffective remedies that didn’t address the problems that were occurring or weren’t properly applied by the courts.

The U.S. Supreme Court also weighed business interests with more gravity than worker’s rights and agreed to limit the employer’s bargaining obligations. Without a legally enforceable mandate to collaborate on workforce concerns, companies were free to fire disgruntled workers in favor of hiring those who wouldn’t rock the corporate boat.

Consequently, as labor power diminished, so did worker wages, protections, and benefits.

 

Facing a New Economic Reality

Over the past three years, economic upheavals have triggered a resurgence in efforts to rehabilitate the worker’s rights agenda. While some industries shrank and sluffed off their workers, others expanded at an alarming rate, and businesses engaged in those sectors are now struggling to find the staff they need to capture emerging economic opportunities.

At the same time, more workers than ever were taking control of their (existing or potential) work situation to demand better pay, better hours, better benefits, and a stronger voice at the C-Suite table. Despite the economic chaos experienced in 2020 as the world essentially shut down its industrial operations, more than 47 million workers left their jobs in 2021 in search of a better quality of life than their previous occupation was providing. While many have found new work that better suits their tastes and capacities, many of the sectors they left behind have yet to regain their previous stability. Several of these industries are those that had traditionally hosted union activities, and one that is particularly hit by job losses (and now suffers a high percentage of unfilled job openings) is durable goods manufacturing.

The manufacturing industry has long been based in America’s Midwest and still holds a significant place in those regional economies. At the beginning of 2020, however, it lost approximately 1.4 million jobs because of the pandemic. In 2023, it is still seeking both entry-level and skilled workers to fill those vacancies, and those workforce gaps are having a profound – and negative – on those local economies. The situation is becoming more dire as time passes, too, with experts predicting a record 2.1 million unfilled jobs in this sector by 2030. There is a myriad of reasons why these job positions remain unfilled, one of which may be because, for so long, workers on those manufacturing floors had no voice or control over the quality of or satisfaction they derived from their work.

 

Today’s economic uncertainties are roiling the conversations and decisions happening in board meetings, director’s offices, and workspaces. The confusion creates opportunities for new employer/employee collaborations that promise to improve the good fortunes of both. They also offer hope that the overall community will benefit too.

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