The UPS Strike

The UPS Strike

E-mail debates of newsworthy topics.
Aug. 23 1997 3:30 AM

The UPS Strike

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Dear Walter:

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       WE WON THE STRIKE! Pop open a Swedish beer! "Aren't you worried," said a friend, "about overplaying this?" Yes, but first let's play it up!
       Still, what, soberly, are the Big Lessons? Well ...
       1) "Bigger is better."
       In the little strike, 180 people or thereabouts, the company laughs ... but when it's 180,000, it seems that labor can win. Even if UPS could have "replaced" everyone, it would have been in shambles for months, years. (The win had nothing to do with a tight labor market. Not that it is tight, with part timers making $9 an hour.)
       2) "Labor is back."
       If not as a movement yet, then as a public-policy option for raising people's wages.
       Yes, unions are still only 10 percent of the private sector. But the UPS strike was a '90s object lesson that the 1950s industry-wide strike still works. Even in the Global Economy: whatever that has to do with Wal-Mart, Kmart, and UPS.
       It seems the industry-wide strike, which Swedes, Koreans, and other foreigners like, works well here, too.
       And UPS, face it, is not a normal company but an industry unto itself, with 80 percent market share.
       It's been the mantra of the Clinton era: High-school grads can't get raises. Now we know ... it isn't so.
       3) "The United States isn't anti-union. Just change the law, and people will join unions."
       Look at the photos at the end of this strike. Even French truck drivers don't gloat like us Americans! It was amazing to see the faces, in USA Today, etc., of those 180,000 Americans who, like you and me, went through the Reagan era. I'm beginning to think we have a talent for union membership. Do even the Germans, Swedes, et al. risk their jobs, as the UPS strikers did, on strike pay of only $55 a week? Never! These northern Europeans don't know what it is like to go on strike.
       When it comes to solidarity ... America Rules!
       A 1995 survey by Professors Joel Rogers and Richard Freeman shows that a third of nonunion America would join a union (if they could) now. I bet the percentage is even higher this week.
       Alas, we have no "right" (despite the Wagner Act) to join a union, or even to put on a button, without being fired. Employers face no serious sanctions for violating these rights, so they just pick out people and fire them.
       If we want to raise wages, a change in the Wagner Act would do much more than a student loan would.
       4) "But what about inflation?"
       Come on. Germany, the country with the strongest labor movement, historically has had the lowest inflation. In strong union countries, big clumps of unions can bargain with clumps of employers so they can actually plan wages, nationally.
       Which means? It's possible to set each industry's wages in light of an industry's productivity. This is, or should be, the economist's dream.
       Of course it isn't possible here. We do it in the dark, company by company, and there is nothing "centralized" about it.
       So the only way that we in the United States can hold down inflation is to rattle our cages, break our unions, and scare the hell out of everyone so that no one has the nerve to ask for a raise at all. Except, of course, the CEO.
       5) "But what about the $11 Swedish beer?"
       My contact at the Embassy says "weak" beer is 10 kroners ($1) and "strong" is 13 ($1.50).
       Even at the snootiest restaurant no Swede would ever pay more than $5.
       But if you tell them you're an American, and an economist, and a free marketer too, people in those countries think they can hose you.

Thomas Geoghegan

Thomas Geoghegan is a labor lawyer in Chicago. He is the author of Which Side Are You On? Trying to Be for Labor When It's Flat on Its Back. Walter Oi is the Elmer B. Milliman Professor of Economics at the University of Rochester.