The Rise of Conglomerate Unions: Less Than Meets the Eye?

Labour Relations

Trade union mergers in Europe and North America have been going strong since the Second World. It is almost always a question of survival: mergers or absorptions are thought to help unions maintain or grow membership to sustain their financial base and increase bargaining power.

While in the past mergers occurred among unions in the same industry or occupation, more recently unions from different parts of the economy have merged to create super-unions, such as ver.di in Germany and UNITE in the UK.

Across the pond in the U.S. starting in the 1980s, five unions led the way in multi-jurisdictional mergers: the Service Employees’ Union, the Union Food and Commercial Workers, the Communications Workers of America, the International Brotherhood of Teamsters, and the United Steelworkers of America.

You could understand their logic: the trade union movement saw the decline of master agreements, which led to decentralized bargaining and greater administrative costs. There was a sudden decline in organizing and subsequent loss of union revenue. “Mergers came to be seen as a potentially cost-effective alternative to organizing as a means of sustaining membership levels,” writes Kim Moody (Centre for Research in Employment Studies, U Hertfordshire) in the British Journal of Industrial Relations. “With smaller unions looking for mergers to survive, jurisdiction became less important for both those willing to be absorbed and those seeking more members.”

Moody took a detailed look at multi-jurisdictional unionism in the U.S. In particular, he assessed the three major arguments in its favour: that it improves the union’s finances, that it increases organizing capacity, and that it boosts union bargaining power.

Moody’s conclusion: Conglomerate unions “do not achieve notable improvements in these three areas, nor do they perform better than other large unions that have engaged in fewer mergers over time. All that can be said is that mergers may prevent even worse performance outcomes, hardly what the advocates of conglomerate mergers claim.”

Are multi-jurisdictional unions in better financial shape? One measure is the degree to which the membership itself finances the union through dues and fees. All the unions studied by Moody rely heavily on income from investments and the sales of assets to cover total costs. As well, bigger unions mean ballooning staff and administrative costs.

Do union mergers lead to increased organizing? “While greater resources could increase organizing capacity,” Moody writes, “a good deal of these resources appear to go on staff and administrative costs as the number of sectors and agreements proliferate.”

Do these unions have greater bargaining power? The reality is that strikes are more infrequent, real weekly wages have declined, and benefits won in earlier times have been rolled back. “As measured by the outcomes of wage agreements in the major jurisdictions of these unions,” writes Moody, “there is no evidence of improved or above average performance. In fact, many of these agreements fall short of the average increases for unionized workers generally and in their major economic sectors.”

References:

“The Direction of Union Mergers in the United States: The Rise of Conglomerate Unionism,” by Kim Moody; British Journal of Industrial Relations (47:4 December 2009 0007-1080 pp. 676-700)

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