In My Opinion: Business Scandals Underscore Unions’ Vital Role

Exactly 100 years ago, President Theodore Roosevelt earned his “trust buster” nickname with two historic actions: He broke up the railroad barons’ monopoly cartel and he intervened in the Pennsylvania coal strike by threatening to send troops to throw the scabs out of the mines, thus helping the United Mine Workers win an 8-hour day and a pay raise.

It’s not that TR, a Republican, didn’t believe in capitalist free enterprise. However, he understood that capitalism needs rules and it also needs the counter-balancing force of unions to keep giant corporations from running roughshod over workers, consumers, and smaller businesses.

The U.S. Congress well understood the role of unions in curbing corporate abuses when it passed the 1935 National Labor Relations Act under another Roosevelt — Franklin D. FDR and lawmakers recognized labor as a fundamental part of the social and economic fabric of our system and encouraged workers to organize to match management’s power in bargaining to raise wages and job standards.

In the years since, corporate America and its political allies have managed to virtually destroy the legal framework of organizing rights and striker protections. Big business today, along with the Bush-Cheney administration, seeks to portray unions and laws such as the Fair Labor Standards Act as irrelevant in the 21st century economy. That is terrifically ironic in light of the recent scandals.

Having a union would be most relevant right now for WorldCom workers, who were unable to bargain for pensions, severance packages, training and education opportunities, help with relocation and other benefits that CWA members enjoy.

WorldCom and its merger partner MCI fought tooth and nail to keep workers from joining CWA — to the point of firing organizers and even shutting down two MCI call centers where workers wanted a union. As with so many other corporations, MCI was unconcerned with being cited by the federal labor board as a serial labor-law-violator.

At Global Crossing, the only workers who will be left with any retirement security are the several hundred who were represented by CWA when the company bought Frontier Communications. These units were later sold to Citizens Communications, and CWA is now in bankruptcy court to help guarantee that their pension fund assets are transferred to Citizens and preserved. The union also has filed suit against Global Crossing over restrictions it imposed on members’ 401(k) savings plans.

Enron workers suffered such a tremendous blow to their retirement security because they were unorganized. Nevertheless, the labor movement stepped in to help. It was the AFL-CIO’s actions in hiring a lawyer for Enron workers and mounting a public campaign on their behalf that led to a settlement boosting their severance package by millions and also giving them the right to go after $80 million in bonuses that Enron executives awarded themselves on the eve of declaring bankruptcy.

America overall today is much worse off because of the decline in union membership numbers and clout. Unions in the 1950s represented 35 percent of the private sector workforce — today, only 10 percent. One clear result is the drop in pension protection. In 1975, 71 percent of private sector workers were covered by defined-benefit pension plans. Today, only 26 percent have such plans, which guarantee a set monthly annuity benefit.

In union contracts, 401(k) savings plans usually are just a supplement to real pension benefits, but more and more in the business world, 401(k)’s have become the only form of retirement security. And lack of federal protections can result in their assets being rendered worthless, such as at Enron.

For the sake of millions of working families, reform is desperately needed, and that’s why we are supporting legislation sponsored by Senator Edward Kennedy (bill number S.1992 in the Senate) that calls for more diversification of employees’ investments in 401(k) plans, allows workers to sell their employer’s stock at any time, and also mandates that workers be represented on the boards of trustees that oversee the company plan.

If this bill — so important especially to non-union workers — passes, it will be primarily because of the support and hard work of organized labor.

America’s unions have a great story to tell about our role in society — today and into the 21st century — especially in light of the cynicism and worker abuse that is being revealed among the falling icons of corporate America. It’s a story that should help us win support for reforming labor laws and strengthening our organizing, bargaining and political programs.
Above all, it’s time to stop letting our enemies define us as an outmoded institution that is somehow an impediment to free enterprise and business success. It becomes evermore clear that without us, the American economic system has no heart and soul. That’s as true today as it was in Teddy Roosevelt’s era.