New York Times

States Limiting Power of Labor Unions Promises to Backfire

The New York Times, Steven Greenhouse reports: “Faced with growing budget deficits and restive taxpayers, elected officials from Maine to Alabama, Ohio to Arizona, are pushing new legislation to limit the power of labor unions, particularly those representing government workers, in collective bargaining and politics.”

The story: “State officials from both parties are wrestling with ways to curb the salaries and pensions of government employees, which typically make up a significant percentage of state budgets. On Wednesday, for example, New York’s new Democratic governor,Andrew M. Cuomo, is expected to call for a one-year salary freeze for state workers, a move that would save $200 million to $400 million and challenge labor’s traditional clout in Albany.”  This will backfire I believe.

Unions have been declining for several years. Just the pursuit of this initiative is likely to bring them back. It certainly provides the ammunition. There are two issues here and they are running into one another. The first is state budget shortfalls which are real and dangerous. In state where a balanced budget is constitutionally required, which is most states, solving the problem is not optional. But at the same time workers are feeling out of control. The elections made it clear that voters so not trust business or government. The seeking to limit the power of unions will likely escalate the conflicting forces and cause the people who help they need to resent them—their own employees.

So what to do instead. If the workers were brought into the problem and engaged as problem solvers, including the union leadership, the odds of finding better outcomes increase. As many big businesses have found when they alienate their workers, they make things harder. But when they become a partner in solving the problems and creating new ideas, everyone can win. Kingsford Charcoal had to close half it manufacturing plants. But instead of alienating workers, they fond themselves buried in letters of gratitude. How did they do that?

The worked with workers from closed and open plants to build capability of those who would be leaving and supported them actively in setting up small businesses for services that were greatly needed. The unions were involved in the process as were cities and universities. The planning for closure and layoffs actually increased productivity and creativity. Read more in a short piece on my website and the entire story in The Responsible Business. (Just listed by Bullish on Books as Top Reads for Business Books for 2011)

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