Reinventing Unions ... Can it be done?

Unions Past

Few people would argue that unions played an important role in improving the working condition of millions of American’s at the end of the 19th and early 20th century. Of course, few people today would argue that Unions have “outlived their usefulness”.

Unions’ recent successes include making US auto manufacturers completely uncompetitive internationally, and having union membership in the teachers’ union negatively correlate with student test scores.

An interesting thing about the decline of unions in the US is that their wounds seem to have be mostly self inflicted; namely thru their lack of innovation. Just like all service organizations, they need to constantly evolve to serve their customers (union members are people who pay a fee to receive a service from their union; as such, members are a union’s customer). Additionally, the lack of innovation has made unions much less appealing as partners to companies who employ their members.

Aligning Customer and Partner Objectives

Beyond the initial agreements for a shorter work week, safer work conditions, and eliminating child labor, Unions worked to establish a ‘career path’ for its members. This career path was closely tied to seniority, the longer you worked at a place, the more you earned.

The outcome of this arrangement was that employees gained more income the longer they worked on the job, and employers got employees who were incened to stay longer at their jobs and presumably improve their skills over time.

Initially, both employees and employers gained from this arrangement; even if employers were reluctant to reach said arrangement.

Failure to Innovate

As the US economy evolved to be less manufacturing focused, people moved into service jobs where seniority is poor indicator of productivity or performance. While this is obviously bad for employers, it is equally bad for employees as they are no longer being rewarded for being more productive or higher performing, rather simply by the length of service to that employer. This in turn leads newer more productive and better performing employees to seek jobs in non-unionized fields of work where they will be rewarded for their output, not simply based on their time at the job. What remains are either older employees who have climbed to the higher pay scales, newer employees that can’t or don’t want to compete based on their productivity or performance, and certain fields were non-unionized workforces simply don’t exist (government jobs, nursing, etc.)

Becoming Relevant

At one point in time there was a lot of talk about trying to unionize service jobs, even higher paying ones like programming; but they never seem to pick up much steam. The lack of enthusiasm for unions in these service sector jobs is largely due to service sector employees realizing that the seniority model is broken and won’t work for their industry; yet unions haven’t come up with alternatives. As such, here are some suggestions that could help unions provide value to both employees and employers in the service sector:

1) Establish metrics that are reflective of the employees output; better, smarter, more productive employees should get raises, not those who have been at a company the longest. With the evolution of business intelligence tools, these metrics are not only abundant, but cheaply captured and measured.

2) Provide career paths based on training to make employees more productive; establish rigorous testing that ensures those who test highly correlate with those who have a high output.

3) Negotiate on behalf of workers for more training to improve their output, and maintain their skills; this benefits employers too, it’s cheaper to keep current employees current and productive than having to hire and re-hire every few years as skill-set demands change.

4) Provide value added services that to improve the well-being of your members: the two obvious ones are retirement planning and healthcare. Maybe it’s time to stop fighting the employer for these benefits and look at providing these benefits yourself to members.

These suggestions would help re-align the objectives of unions with those of their customer-members as well as the employer-partner.

The Win Win

Item #1 above is probably the most contentious item, and is currently being debated in the education realm, namely in the form of rewarding teachers based on test results. Leaving aside the arguments about the efficacy of test results as an indicator of teacher performance, more strides need to be made in all lines of work to establish meaningful measures by which to reward employees, the time for ‘time’ to be the measure has passed.

Conclusion

Most (under 40) Liberals I know don't seem to think there's much chance of Unions surviving; in fact, they go so far as to suggest they've outlived their usefulness. Unless unions can dramatically change their value proposition for both employers AND customers (students, patients, etc.), I don't see much chance of their survival either ... outside of perhaps the public sector, where things like efficiency & value propositions don't seem to matter.