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Unions, formed to protect the rights of their members, are generally perceived to obtain better work conditions for their employees – and with that, better pay and benefit packages.
And it’s a perception that is backed up in data.
By Justin Sayles, Staff Writer
But global competition, benefit costs take a toll In June 2005, union workers received more than $33 in total compensation, compared with $23 for non-union workers, according to the Bureau of Labor Statistics.
“If you had a company that had a good benefits package, the employees probably wouldn’t be unionized,” said Frank J. Montanaro, president of the Rhode Island branch of the AFL-CIO.
But as the national labor market continues to squeeze workers in many industries, are the benefits of unionized and non-union shops starting to resemble one another more?
Montanaro said he has not witnessed changes in the disparity of benefits. According to him, the contracts of both private sector and public sector union members are subject to the status of the economy, as they have always been.
But according to Leonard Lardaro, professor of economics at the University of Rhode Island, global competition and skyrocketing costs of fixed expenses have cut into the benefits that workers are able to secure in collective bargaining agreements.
“What was OK 20 years ago is just becoming prohibitively expensive, so I think that’s something that’s not going to go away,” said Lardaro.
Pointing to Ford’s announcement last week that the company plans to lay off 30,000 U.S. workers, Lardaro said the larger unionized industries – including automobile manufacturers and major airlines – have been faced with financial distress that has been passed on to employees.
In many places, for the companies to survive, they are forced to choose between cutting benefits that workers receive and how many employees they can keep employed on a full-time basis.
“The labor market itself has become much more difficult,” Lardaro said. “The economic indicators that I’m seeing [for 2006] are saying that our rate of growth is going to be slowing down and I think that’s going to exacerbate it.”
Joel Cooper – Rhode Island president of brokerage firm USI, formerly Benefits Unlimited – said unions are seeing their costs for benefits go up because the expenses are going up a rate faster than inflation. Employers are starting to say to employees: “ ‘We’re going to go bankrupt, and then you’ll have nothing,’ ” he said.
“On the employer side, there is a huge shift because they see incredible rates of increase, especially in health benefits,” Cooper said.
“On the union side they are a lot slower to change the culture. They’re holding on for dear life. That’s what they fought for, that’s what they are all about – representing their membership.”
On the public sector side, Lardaro has also witnessed a local shift in the amount of benefits offered to union employees. Specifically, he points to Republican Gov. Donald L. Carcieri’s initiatives that have forced state employees and teachers to work longer before they can begin receiving their pensions.
“It’s political, too,” Lardaro added. “It makes him look good that he’s trying to cut wages and benefits” and hold the line on taxes.
On the municipal level, the city of Cranston last month agreed to a contract with the Teamsters Local 251 that includes an HSA-eligible health plan as one of two coverage options.
The three-year pact gives workers a choice between a traditional PPO plan with a 10-percent premium co-share rising to 20 percent by the third year, or an HSA-eligible plan with a $2,000 individual or $4,000 family deductible.
Cranston Mayor Stephen Laffey called the plan “a fundamental shift in municipal government.”
Traditionally there have been differences in the benefits offered to Rhode Island’s public sector employees compared with neighboring states, said USI’s Cooper, whose branch consults for municipalities in several New England states. In Massachusetts, unions have been forced to agree to more givebacks and have accepted contracts that are “less rich,” Cooper said, paying greater contributions than before.
However, in the five municipalities that Cooper deals with in Rhode Island, the workers tend to have health care premiums that are either “zero or very, very small,” he said. “The culture in this place has been that unions are a little stronger,” Cooper said, noting that several national union leaders come from Rhode Island.
Chuck Schwartz, executive director of the R.I. Institute of Labor Studies and Research, which works in collaboration with unions, employers and the state on worker-education programs – said that being a union worker has other benefits that are greater than those given to non-union workers.
Aside from higher compensation and benefits – things he attributed to union workers’ training, productivity and longevity at jobs – Schwartz said workers also enjoy greater job security and more freedom of speech at the workplace.
“It’s really rights on the job,” he said. |
