There’s been an amusing effort by labor advocates to scrounge up a list of successful unionized companies after The New York Times’ Andrew Ross Sorkin said on MSNBC’s Morning Joe that it was difficult to name successful unionized companies.
The problem with the list of unionized companies, however, is that many are in heavily monopolized industries. This means that these companies often do not have any direct competition and completely dominate their industry and region. These conditions actually make it easier for unions to organize. In turn, this enables unions to exert greater influence since they also have a monopoly (over labor supply).
The best case against the success of unionized companies, which advocates won’t invoke, is the auto industry in Detroit. The UAW is Detroit. Almost all of American automakers’ employees are UAW members. It’s doubtful that anyone in America today would argue that GM, Ford, or Chrysler are successful unionized companies.
Here are a few more examples of monopolized industries where unions enjoy considerable influence:
Major Hollywood Studios. Unions have a monopoly on the filmmaking industry. If you’re not a member of one of the numerous guilds, (Screen Actors’ Guild, Director’s Guild of America, Writer’s Guild of America, etc.) good luck getting a part in a Hollywood production. A successful industry isn’t one where one of the work requirements is mandatory union membership.
Telecommunications. The Communication Workers of America union dominates the telecommunications industry.
Residents should be familiar with unions’ iron-grip on telecommunication companies. Verizon has been slow in its effort to unveil FIOS (fiber-optic internet service) in major cities like New York and Washington, D.C. because of considerable local opposition from labor. Officials for the CWA and other local unions complained that Verizon had been utilizing non-union workers to lay fiber-optic cable. The disagreement – one of many contentious issues between Verizon and the unions – almost led to a strike. The resolution? Verizon has to ensure that any FIOS-related jobs be done by union workers. This means that instead of contracting to existing fiber-optic teams, Verizon has to pay for instruction and training to existing union workers. That’s how unions exert influence over “successful unionized” companies.
Judging by recent events, it’s hard to argue that Verizon and AT&T have enjoyed successful relations with unions. It’s also difficult to argue that the telecoms, which essentially have monopolies over their regions and markets, constitute a successful model of union-company relationships.
Professional Sports Leagues. The major professional sports leagues enjoy a monopoly over their respective sport. There are no other viable or comparable leagues for a professional athlete to compete in. But it’s not like the major professional sports leagues have enjoyed resounding success. Baseball fans knows that the MLB is still rehabilitating its reputation after the brutal 1994 strike. The NBA has its share of lockouts, and there’s considerable talk about another lockout occurring. The NHL has just begun to recover from its lockout in 2004, the first time a major professional sports league in North America canceled an entire season due to a labor dispute.
Boeing. Boeing exists in a duopoly in the large commercial aircraft industry with its only competitor, Airbus. There are no other companies to work for if you want to work in the commercial aircraft industry. This makes it easy for unions to 1) organize 2) collectively bargain 3) hold out or strike if Boeing does not appease their demands. This just occurred in 2008 , which hurt Boeing’s bottom line and contributed further to the delay of its new plane, the Dreamliner.
Many of other companies listed exist as monopolies or oligopolies. CSX, a major railroad company, dominates a particular region and keeps its rates at a competitive level with the other major railroad companies. This facilitates union organizing for companies since they are insulated from direct competition.
These companies certainly are successful in regards to revenues. But it’s misleading to suggest that these companies are successful because they are unionized. The conditions that enable the monopolization of an industry by a company impact the rate of unionization.
The supposed success of these companies also begs the question: if there are so many successful unionized companies, why should Congress bother to pass EFCA and radically change existing labor law? Why fix what’s not broken?