Harold, Hunter and Hockey

Depending on your age, the recently announced contract between the International Longshoremen’s Association and United States Maritime Alliance could be considered “your father’s” (or grandfather’s) labor deal. Labor received wage and benefit improvements, while management achieved minimal concessions on other issues. 

This is reminiscent of the postwar era, when organized labor represented a potent political force. In 1954, 35 percent of all workers were union members. Most of these were blue-collar, male head-of-household workers who were able to join the middle class through jobs with large companies that were expected to last a lifetime. In January, the Bureau of Labor Statistics reported union membership was at its lowest level, 11.3 percent, since 1916, when it was 11.2 percent.

Of course, the world has changed a great deal since the postwar era. Since the 1970s, oil shocks, inflation and unemployment changed everything. Globalization took many forms. U.S. heavy industry, all that was left standing after World War II, faced increased competition from rebuilt global competition, especially highly unionized companies in the automobile and steel sectors.

Even the development of transplant facilities was like a poisoned chalice for labor, as these plants were strategically placed to ensure nonunion operations. Globalization also accelerated financial re-engineering, which forced the management of vertically integrated companies to shed noncore assets and personnel. Although this core focus drove the growth of outsourced contract logistics, union jobs were frequently replaced by nonunion ones.

Industries were deregulated to combat inflation. In the transportation industry, nonunion competition, either employee or owner-operator, became a serious threat to carriers with minimal barriers to entry (and exit), such as airlines and truckload. Industries with high barriers to entry, such as railroads, remained highly unionized — even while employment dropped.

Waterfront labor on both coasts, the ILA and the International Longshore and Warehouse Union, have prospered while most of their union brothers and sisters have suffered. Part of their success can be attributed to maintenance of multiple-employer-multiple-employee labor agreements, which used to be common in the transportation industry. (With the exception of rail labor, which has its own set of statutes, these have mostly disappeared.)

These all-encompassing contracts prevented the development of separate deals that would slowly erode labor’s power. The Teamsters National Master Freight Agreement, which formerly covered everyone, has been largely diluted. UPS has set up its own pension fund, and YRC was granted numerous exemptions so that it might not be liquidated.  Meanwhile, ABF is seeking legal redress to remedy its perceived disadvantage to YRC.

We might consider professional hockey and basketball when looking for examples of prominent multi-employer-multi-employee contracts. 

Just when it looked like the National Hockey League season might be lost, after four months of acrimony between labor and management, a 10-year agreement was signed. The NHL owners locked out the players last September over division of revenue (the salary cap). This strategy proved successful in 2011 for professional football and basketball owners. Hockey’s owners were led by a pugnacious commissioner, Gary Bettman, who has overseen a schedule loss of 10 percent over his 20 years because of labor disputes — including the entire 2004-05 season.

The 161-day NBA lockout in 2011 had a similar basis of dispute. There, the conflict wasn’t just between labor and management; there were also serious disputes between Derek Fisher, the players’ union president, and Billy Hunter, the union’s executive director. The conflict continued after the settlement, when Fisher accused Hunter of misconduct. After several investigations, Hunter was terminated in February.

Both examples might provide advance lessons for the waterfront. ILA President Harold Daggett has been dogged for years about alleged connections with organized crime. A report by the Waterfront Commission of New York Harbor concludes that ingrained corruption remains routine. Until job loss really becomes a threat, however, it’s unlikely that rank-and-file membership will object.

Basketball and hockey had dysfunctional business models that resulted in losses among most clubs. This isn’t unlike today’s ocean shipping industry. The industry’s attempt to respond to structural issues led to the 2002 lockout on the West Coast. In that instance, the Pacific Maritime Association, unable to maintain unity in the face of incredible pressure, couldn’t sustain the lockout, and the ILWU was able to victoriously maintain the status quo.

Technology is changing what and where work is performed in all jobs, presenting a constant challenge for labor and management to resolve their numerous conflicts. For the transportation industry, it’s not a spectator sport; it may well determine long-term viability of many sectors and stakeholders.  

Ted Prince is principal, T. Prince & Associates. Contact him at ted@tpassociatesllc.com.

 

 

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