Will organizing in the service sector revive the labor movement? Are service sector jobs somehow immune from the forces of globalization? These ideas are widely held in some corners of the labor movement.
In the wake of the recent UAW convention—which spotlighted the decline of manufacturing unions—New York Times reporter Steven Greenhouse takes up these ideas in an article in the June 16th New York Times. He writes:
[There is a]….little-understood development: the nation's private sector is divided into two very different labor movements. The first comprises manufacturing unions, like the auto workers and machinists, which are on the defensive and on the decline. The second is made up of unions for the expanding service sector, which are upbeat and on the prowl for hundreds of thousands of nursing home aides, janitors, [and] supermarket cashiers….
The manufacturing unions have been devastated by globalization, with many companies insisting that America's unionized factory workers are overpaid and their benefit packages too rich compared with overseas workers Delphi, the beleaguered auto parts company, has repeatedly trumpeted this assertion as it called for cutting its workers' $27-an-hour wages in half.
In contrast, the service-sector unions are largely immune to globalization — just try to outsource the job of a hamburger-flipper, hotel housekeeper or bedpan-emptier to China. Helping to make service-sector unions optimistic about attracting more members is the perception that workers like hotel housekeepers and janitors are underpaid and have skimpy benefits. Moreover, many of these workers are immigrants, who are often more enthusiastic about unions than native-born workers...
Even as manufacturing workers are seeing their wages and benefits slashed or their jobs moved abroad or automated out of existence—precisely because the wages and benefits that made these jobs decent are no longer competitive—many in the service sector still see the manufacturing unions as a model.
In a way, said Bruce Raynor, president of Unite Here, the service-sector unions hope to imitate the manufacturing unions of old.”Our goal is to move service-sector workers into the middle class," he said. "The manufacturing unions did that for factory workers. It took them 20 years to do that, and we hope to do the same thing.
Those who argue that service unions can avoid the effects of globalization might want to take a second look. Indeed, there are at least six dynamics at play in the global economy that they will need to pay attention to as they try to make low wage jobs into “middle class” jobs.
1. The size and vigor of the low wage labor market in the US is due in large measure to the fact that there is an adequate supply of workers to fill those jobs at the low wages on offer. If wages rise, many of those jobs will disappear—either they will be scraped as unnecessary or they will be automated. No one bags groceries in higher wage Europe, parking lot attendants are uncommon. Personal service jobs such as house-cleaning or domestic landscaping—which employ many in the US—are much rarer, as well. If wages rise, expect hotel rooms to be designed to be cleaned quicker and with fewer workers. And in the retail industry, Wal-Mart and other companies are already experimenting with chip technologies that will make many check-out cashiers a thing of the past. Some jobs have already disappeared: today there are few gas station attendants left and live-in household help once common among the well-off went out of fashion after World War II as wages increased.
2. Many more jobs can be outsourced than is apparent at first glance. Greenhouse says “…try to outsource a hamburger flipper..” well MacDonald’s is coming close to doing just that as it experiments with centralizing drive through order takers in sites far from the restaurants where the orders are being placed. While, it is certainly true that many jobs require face to face contact and can’t be outsourced, all kinds of business processing jobs in the service sector certainly can be and will be if wage and benefit costs climb.
3. While many jobs can’t move, workers can. Globalization is triggering a massive migration of people in search of work. Unions in the service sector have staked much of their plans on organizing immigrant workers. Now we in the US are in the midst of a major debate about immigration, the outcome of which will shape labor markets here in the future. Demagogues are trying to build a backlash against immigrant workers. As we have argued, in several past blogs, these demagogues could succeed in dividing immigrant and non-immigrant union members. To prevent this the labor movement must begin to build a transnational alliance of unions and social movements to create a worker friendly immigration reform program.
4. Wages and working conditions are set by the power of workers as a whole, so that a decrease in wages and bargaining power of manufacturing workers buffeted by global economic forces also affects service workers. If service sector unions forget this they will repeat the mistake that the US labor movement has historically made by focusing on one sector of the workforce, rather than the workforce as a whole. When manufacturing was the driving force of the economy, manufacturing unions showed little solidarity with workers in the service sector thus allowing the growth of a huge low wage work force and foregoing the possibility of achieving social and political gains on critical social issues such as universal heath care, mandated vacations, or adequate pensions. They also allowed the growth of a large pool of low wage workers available for work in higher paid jobs—inevitably the law of supply and demand helped suppress wages. Service unions will undermine their own power if they make the same mistake and ignore what's happening in the manufacturing sector.
5. Many firms in the service sector are global corporations with operations and profit centers in many countries. This enables global companies to resist workers demands for better wages and working conditions in any one workplace. In addition, global companies generally develop global supplier chains, complex—often contingent—employment relationships, and the union avoidance strategies that make organizing difficult. And, as a last resort—because of their global reach—these companies can simply close operations in a particular area when necessary—as Wal-Mart did in Quebec when workers managed to organize a union.
6. All over the world, globalization has triggered a process of “competitive liberalization”. Pensions, social welfare and unemployment insurance laws, labor laws, and public services are put into competition in an effort to reduce taxes and regulations to attract mobile capital and jobs. The corporate giants that dominate the global economy in both the service and the manufacturing sectors will continue to invest resources in shaping public and political discourse to further undermine the power of workers. Because of this roll-back in laws and regulations, service sector unions face an even more difficult task than manufacturing unions did when they organized. Reversing this process requires reaching beyond conventional organizing in any one sector and moving to a broad class based approach to unionism.
It is, of course, a good thing that service sector unions have made recruiting new members a high priority. But only through global labor cooperation—and ultimately a global labor movement—can the conditions be created for doing so effectively. Indeed, the executives of global service companies may smile when they read that service sector unions in the US think they are "immune to globalization."