For rail labor, Labor Day 1998 is the best of times and the worst of times. The 180,000 members of more than a dozen rail unions enjoy more secure employment than at any time in their careers.

For the level of education and training required, rail workers earn a plentiful premium. Even the lowest paid average $41,000 annually and all rail workers have a bountiful health-care package,to which they contribute only about $10 monthly. Meanwhile, the cost of achieving so elevated a standard of living has come rather cheaply to modern rail workers. Since World War II, Congress has halted almost every railroad strike and imposed its own relatively generous settlement terms, meaning most senior rail-union members have lost fewer than two dozen workdays to job actions.The late Charlie Luna, president of the United Transportation Union, fretted that modern-day union members neither understand nor appreciate what unions contributed to American society. Overtime pay, paid vacations, company-paid health care, an effective grievance procedure, and more were all won through long, bitter struggles, he said.

Despite the largely unappreciated material success of today's rail workers, their unions aren't doing well. Although the rail industry is the most unionized in the nation, mergers and cost cutting have shaved the dues-paying work force from 500,000 in 1980 to 180,000 today.

As dues revenue evaporated, unions resisted their own mergers, retained a bloated hierarchy and faced substantially higher costs as tougher management and worker perceptions of arbitrary discipline generated an explosion of employee grievances.

Privately, union officials admit the status quo may force their organizations into bankruptcy within the next five years. There are just too many elected union officers and too few dues payers. Economics is fueling merger talks between the Brotherhood of Locomotive Engineers and United Transportation Union. Less is known publicly about other pending rail-union mergers, but each rail union has discussed at least one marriage within the past 24 months.

If union leaders are unwilling voluntarily to share the power and perks of leadership, perhaps the democratic process within each union will force these mergers - if that democracy is not choked by Congress.

First, some background. A 1956 Supreme Court decision - Railway Employes Dept. vs. Hanson - held that mandatory fees paid unions by rail workers could be used only for collective bargaining activities, contract administration and grievance adjustment. A more recent decision ''Communications Workers of America vs. Beck,'' applies similarly to non-railroad trade unions.

Costs that may be avoided by dues objectors include union membership in the AFL-CIO and union research and advocacy that advance trade-union ideological objectives, all of which complement the collective-bargaining agenda. Federal law already requires political donations be made from fully voluntary PACs.

The Supreme Court's Hansen and Beck decisions protect First Amendment freedoms of unions and their members and require that unions inform the rank-and-file they may opt out of paying dues not related to collective bargaining. But dues objectors lose the right to elect union officers and otherwise participate in union affairs, permitting more radical trade unionists to seize control.

Fortunately, this has not occurred in rail labor because relatively few union members now opt out of the full dues structure. However, recently failed Proposition 226 in California would have required advance annual written permission of employees before deductions for more than collective bargaining-related fees could be subtracted from paychecks.

Of course state law does not apply to rail labor unions, but the language of Proposition 226 could surface in Congress. Its unintended consequence could be to separate from union voting privileges those most interested in internal democratic reform.

Struggling rail unions deserve better than being turned over to the most radical of their ranks.

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