A version of this article appeared in the August-Sept. issue of Z Magazine
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The Corporatization of Unions

by Jim Smith
L.A. Labor News

May 2002

Every day across the industrialized world there are countless class battles taking place on the shop floor, in the office and public enterprise. Workers - unionized or not - stand up for their rights in both subtle and forceful ways, often employing creative tactics to resist management incursion on their conditions and prerogatives, to defend the weaker among them, or to “train” an incompetent manager. All of this goes unreported by the press, and often seems unremarkable to the participants. It’s just part of the job. Yet, it is these small actions that build the solidarity upon which unions are founded. Without the thousands of small, heroic acts, there would be no base upon which to build the mighty international unions.

Nearly every poll shows that workers favor having a union by a large majority. According to an Associated Press poll (August 30, 2001) “General approval for unions runs by a nearly 3-1 ratio, roughly the same as in recent years but higher than 20 years ago, when it was less than a 2-1 ratio.” Yet, unions continue to stagnate or lose membership and also lose elections at an alarming rate. Can this be attributed solely to employer resistance?

My experience in leading organizing campaigns for a period of more than 20 years inclines me to believe that fundamental problems within labor are also to blame. Beginning with Samuel Gompers and the founding of the AFL, a corporate model has been embraced by much of labor. This development parallels the growth of the modern corporation. It is characterized by a “top-down” decision-making structure, relatively high salaries for those on the top and low salaries at the bottom, an ever expanding staff at the top levels, a reduction in autonomy at lower levels (think trusteeship), an exclusionary structure, a broad agreement with corporate political goals and an intolerance for democratic dissent at all levels.

Before the corporate model came to dominate labor, there was the collegial, or equalitarian model, where every member, no matter his or her union office was called brother or sister. The earliest guilds in Egypt, Greece and Rome were based on this concept as were the early unions – and their parties – in the U.S. including the National Trades’ Union, the Working Men’s Party, the Molly Maguires, the National Labor Union and the Knights of Labor. Many of these unions philosophically, and sometimes practically, supported worker associations and cooperatives where income was shared equally or according to a strict formula. In addition, they were generally non-racist and non-exclusive.

Perhaps the highest development of the collegial model is the Industrial Workers of the World (IWW). Its decline was a product of a number of factors and should not be blamed on its choice of structural model. Philip Foner describes the IWW as a congenial organization for immigrant workers and migrants because of low initiation fees, small dues and “rank-and-file” rule by contacting (The Industrial Workers of the World, 1905-1917, International Publishers, 1997:221).

In contrast to the exclusionary policy of the AFL toward immigrants, the IWW proclaimed: “Meet the new arrival at the immigration dock; introduce him to his fellow workers in One Big Union of the working class...” As a result, says Foner, the IWW “quickly won a reputation among the foreign born as their spokesman and they came, often without being asked, to join.” (Foner, p. 122).


At the same time the IWW was organizing the poor and dispossessed, the AFL was recruiting skilled workers - the so-called aristocracy of labor. The skilled trades had a bigger stake in the survival of the capitalist system and were by nature exclusionary. Immigrants, workers of color and unskilled workers were seen not as fellow toilers but as enemies, inferiors and potential strikebreakers. A highly complex control of membership and a hierarchal structure to protect these craft workers made sense.

Contrary to the goal of autonomous power, in other words, Gompers and the Executive Council had by the First World War decided to become a “junior partner” of business. (Jeff Lustig, Corporate Liberalism, Univ. of California Press, 1982:145)

Even as the AFL was flourishing in the 1920s and the IWW was fading, a new “enemy” arose, preaching industrial unions. The Communist Party and its Trade Union Unity League (TUUL) began organizing workers on an industrial, not craft, basis. Repression by the state and the employers kept these unions from being successful in anything beyond isolated strike struggles, however, they laid the foundation for the rise of the CIO.

The Congress of Industrial Organizations was a hybrid organization. It combined a core of radical union organizers and collegial-based rank-and-filers with a leadership that broke away from the AFL but retained much of its admiration for a corporate model of organization. The McCarthy-style purge of Communists and militants in the late 40s paved the way for a merger of the AFL and CIO that would be firmly based on the corporate model.


A new element - the professional union functionary - came to prominence with the rise of the public sector unions in the late 1960s and 70s. When collective bargaining laws for public workers swept the country, unions scrambled to hire organizers regardless of their trade or industry. Since public workers covered the gamut from blue collar and skilled workers to white collar and professional employees, nearly any savvy organizer equipped with generic “join the union” pamphlets could fill the bill.

Like the government agencies that employed these workers, their unions tended to be extremely hierarchal and filled with “headquarters” staff rather than field organizers. Rank-and-file unionism was diffused by the establishment of small locals without treasuries or power that were controlled by districts or councils with a hired professional staff. There was little difference between the council director and a corporate CEO. Both reported periodically to a board of directors and occasionally to stockholders or carefully controlled conventions.

The top staff (leaders) of the public workers unions joined the craft union leaders in receiving salaries that were much higher than those of most of the members in their unions. The appeal of high salaries became a bigger incentive for workers to seek union office or be appointed to staff positions than did a commitment to union ideals and goals.

By the 1980s the growth of union salaries had been extended to the top reaches of most unions. For instance, Research-Education-Advocacy-People (REAP), a rank-and-file group in the United Food and Commercial Workers (UFCW) union lists 37 officers with salaries ranging from $111,000 to $304,000 and 39 directors with an average salary of more than $120,000 (REAP website: <http://www.reapinc.org>). Most of the members of UFCW are grocery store clerks.

“Double-dipping,” or collecting multiple salaries, is another common practice in some unions. At the Western Regional Convention of the Service Employees Union (SEIU) that I attended in 1995, “Make the Best Better,” an insurgent group at the time, proposed eliminating double-dipping which was enjoyed by a number of leaders including then-president John Sweeney. The proposal was defeated after fierce lobbying by Sweeney, Gus Bevona who was the president of the New York janitors’ union and with a salary of $450,000 per year (Tom Robbins, Landlord Meets the Mob, Village Voice, May 9, 2001) arguably the highest-paid union official in the country, and others.

With such high salaries, these union leaders tend to associate with others in their same income level, adopt habits and haunts of corporate officials, and believe they are gifted, or at least better than those they lead. In many cases, they equate their continuation in leadership with the survival of the organization. Many become “presidents-for-life.” In the case of the plumbers union and the laborers unions, the presidency was even handed down from father to son. The current president of AFSCME is the son of one of the most powerful council leaders in the union. The desire to cling to leadership was so powerful in the Mine Workers union that it lead in 1969 to the murder of challenger Jock Yablonski by incumbent Tony Boyle.

Some union presidents have even crossed the line from following a corporate model to corporate profiteering. In its May 2002 issue, Labor Notes reports on the scandal in the Union Labor Life Corporation (ULLICO) where a number of board members who are union presidents have made hundreds of thousands of dollars by using inside knowledge on stock trading, particularly shares of Global Crossing. ULLICO was founded in 1925 to provide death benefits for union members. However, since then it has become a “player” in investment banking and is currently financing the construction of Playa Vista in Los Angeles which is opposed by a broad coalition of community and environmental groups.

Another development that can be associated with the rise of the public worker unions is the phenomenon of “managerial” staff. In addition to the hierarchy of elected officials, another level has developed where union employees are divided into managers and workers. With this division, internal labor unity is additional fractured. The income division widens and managers tend to associate with other managers, while union “workers” associate with their own kind. Among workers, there is a further division between predominately low-paid and women workers in the office, and higher paid and predominately white men in the “field.” In many unions, the office workers have unionized (usually with the Office & Professional Employees union), while union managers and officials have vigorously battled attempts by field staff to organize.

In some cases, the pay of field staff has gone down - but with a racist edge. In the Los Angeles hotel workers union, highly paid white field reps under the regime of Scotty Allen were fired when the local was trusteed as the international union sought to address the needs of Latino members. They were replaced by field reps and organizers of color, but at half the salary of the previous (white) reps. When they tried in 1989 to organize with the Newspaper Guild, the leadership and international fought vigorously, and was ultimately successful in eliminating the staff union.


Although union density (percentage of the workforce) had steadily declined since the 1950s when labor lost the aura of a movement, it was the rise of neoliberal globalization in the late 1970s that turned the slow fall into a nose dive.

The desire of Gompers to have labor be the “junior partner” to capital had largely been implemented in the period from the beginning of McCarthyism until the wave of plant closings in the late 1970s signaled a new attitude by capital. The “social compact” disintegrated with the triumph of finance capital over industrial capital and with scientific-technological advances that freed capital from its nation-state restrictions.

The dominance of finance capital - caused partially by the hugh demands for investment capital triggered by new technology - homogenized industry. No longer was the long-term well being of the company (including maintaining a skilled and loyal workforce) foremost in the goals of the Board of Directors. Instead, cutting costs and maximizing short-term profits in order to be more attractive to investors became the order of the day (the recent unsuccessful efforts of the Hewletts to prevent a merger of Hewlett-Packard with Compaq may be seen as a last gasp of industrial capital).

By the 70s, competition had become worldwide. In many ways, the philosophy of the capitalists returned to that of Adam Smith, and was dubbed neoliberalism. Essentially no interference with the markets could be tolerated. None from government trade barriers and certainly none from unions. Less profitable enterprises had to go, regardless of the social consequences.

In Los Angeles, in a period of a few short years during the late 70s, the region lost four major rubber plants, three auto plants, three steel plants including the giant Kaiser Steel Works in Fontana, plus countless other “feeder” plants and businesses. The result was devastating to inner city neighborhoods which had depended upon the availability of good union jobs for economic survival. Unemployment, suicide rates and drug use skyrocketed. Meanwhile, corporate bottom lines increased as did the income disparity in the U.S.:

America is the most unequal society in the industrialised West. The richest 20 per cent of Americans earn nine times more than the poorest 20 per cent, a scale of inequality half as great again as in Japan, Germany and France. At the very top of American society, incomes and wealth have reached stupendous proportions. The country boasts some three million millionaires, and the richest 1 per cent of the population hold 38 per cent of its wealth, a concentration more marked than in any comparable country. (The Guardian, U.K., Log Cabin to White House? Not Anymore, April 28, 2002).

For many of us, these facts are alarming, but for others they validate the U.S. corporate model and encourage emulation.

The response to the neoliberal attack was militancy on the part of many workers. Plant closing coalitions sprang up around the country. Bitter strikes were waged against Hormel, Staley, Phelps Dodge, and other corporations. Most of these strikes were smashed and in many cases workers found they had to fight a two-front war against the employer and their international union. The unequal battle became even worse when government support for neoliberal tactics against unions was signaled by President Reagan’s firing of 11,000 PATCO air traffic controllers in 1981. Some union leaders were frightened of the militancy exhibited by formerly tranquil members. These leaders had come to power during the social contract and had neither the skills nor the inclination to lead a strike, go to jail or form an alliance with non-labor groups (or even other unions in some cases).


The AFL-CIO staggered on through the Reagan and the elder Bush regimes. Rank-and-file groups formed in a number of unions and called for more democracy, more militancy and more organizing. However with few

exceptions, they did not call for wide-ranging structural reforms. Usually they were ignored or co-opted.
A typical example may be the Concerned Guild Members, a reform group in The Newspaper Guild (TNG), for which I was the national organizer. At one time, CGM had 1 percent of all Guild members as members of its caucus. This is perhaps the highest percentage achieved by any rank-and-file group. We were able to dominate discussion and win significant votes at annual conventions. The international leaders then eliminated annual conventions. We called for autonomy and self-determination for Canadian members, more women and people of color in leadership, more resources for organizing and merger with a larger union. In the end, Canadian members were able to leave the U.S.-based TNG without retaliation (which weakened CGM), a career staff woman was elected international president, and TNG “merged” with the Communications Workers.

In retrospect, the merger movement was an example of corporatization infecting even the most progressive elements in labor. The merger of The Newspaper Guild with CWA did not result in more resources for organizing, but did result in less democracy since TNG became a numerically insignificant part of the larger union.

The argument for union mergers can be reduced to “the companies are merging so we should too.” Neglected in the argument is the vast difference in resources and economic might between merged corporations and merged unions. At worst, the union merger movement is a form of a “cargo cult.” There is no experience to which we can point of vastly increased union might as a result of mergers, but there are many cases of the erosion of union democracy. The merger of the progressive Oil, Chemical and Atomic Workers (OCAW) into the more or less backward Paper, Allied-Industrial, Chemical & Energy Workers (PACE) is a case in point. Leaders of the more democratic OCAW had initiated the formation of the Labor Party, with which PACE is not sympathetic.

The inability of unions to organize bears some examination. As corporate-model executives, union leaders would certainly welcome more income derived from organizing. However, a risk-benefit analysis would likely show that the prospects of gaining income from organizing were problematic. First of all, it was expensive, around $100 per worker in a labor board election. Secondly, there was a 50-50 chance of losing the election, and even if it was won, there was still a difficult first contract to be negotiated. There was a political element too. Newly organized workers tended to be militant and involved. They tended to identify with their union organizers, not the remote leaders of the union. In some cases, they had the ability to turn the incumbents out of office (When janitors did just that in Los Angeles, the SEIU international swiftly put the union into trusteeship). Surely, a better way to increase income was by raising dues.

In spite of all the obstacles, a well-functioning organizing committee is a prime example of the collegial model at work. The collective spirit, the enthusiasm and confidence can be inspiring. The energy and excitement of an organizing campaign stands in sharp contrast to the ho-hum world of routine union business. As a result, it can come as quite a shock to organizing committee members when they come face-to-face with corporate model unionism. Which is the real union spirit?

Half way measurers by many unions alternately inspired and frustrated non-union workers. My own experience in organizing is illustrative. After organizing the L.A. Daily News - the largest Newspaper Guild group to be organized in more than 20 years - I appealed to the international to continue funding the campaign until a first contract was secured. “Why should we do that?” asked the international secretary-treasurer. “You’re just going to get decertified anyway.” We didn’t get the funding nor were we decertified. The campaign remains a high point in recent Guild organizing. Later, after amassing a 100-member organizing committee at the Los Angeles Times, the international again decided to cut off its funding. The local union could not afford to continue the campaign and the paper remains non-union today.

The lack of organizing by the AFL-CIO has led to a kind of third-worldization of the U.S. workforce, ala Mexico and Venezuela, where unionized workers form an elite with health care and pension benefits while non-union, and mostly workers of color, are mired in poverty.


The ongoing crisis in the AFL-CIO came to a head, oddly enough, under a Democratic president, Bill Clinton. Lane Kirkland had presided over the decline of the AFL-CIO since 1979 and had faithfully carried out the legacy of his mentor George Meany, as well as the demands of the State Department (I’ve dealt at length with Kirkland’s fall in “AFL-CIO’s Last Cold Warrior,” Z Magazine, July 1995. Also available at <http://www.lalabor.org/Kirkland.html>). After reeling from the passage of NAFTA, the final straw for the AFL-CIO Executive Council was the Dunlop Report. This Clinton-appointed commission was supposed to lay the groundwork for labor reform, according to Kirkland. Instead, the report argued for sanctioning company unions! Republicans gleefully introduced enabling legislation, called the “Team Act.” Kirkland was finished.

The “New Leadership Team” lead by John Sweeney, who was previously not known as a reformer promised “a new dawn for American workers” as it took office on Oct. 25, 1995 (The L.A. County Federation News, AFL-CIO Elects New Leadership, Nov. 1995). Unfortunately, the Sweeney vision was one of simply running the union corporation more efficiently. Seven years later, the AFL-CIO is still slipping and rumors circulate of a new round of musical chairs at the 16th Street headquarters.

The Sweeney “revolution” was never anything more than a palace coup. Called the “New Void” by a prominent independent union wag, the New Leadership was not put in office by a mass uprising of the members (many of whom didn’t know who either Kirkland or Sweeney was). Had there been an election for the leader of the AFL-CIO, Sweeney probably wouldn’t have been in the running (No scientific polling was conducted among union members, however, the magazine Labor Notes conducted a mail-in ballot which was won by Mine Workers union leader Richard Trumka, with Sweeney trailing far behind. - Labor Notes, May 1995)

The lack of direct democratic elections is reflective of a top-down leadership and is an attribute of the corporate model. Leaders of the AFL-CIO are selected at a convention of international unions to which local unions, and members, are not invited.

At least one AFL-CIO leader has been candid in defending this limited democracy:

The question that arises in our union and many others is whether or not the ideal of democracy and practical reality have a matchup, said Andy Stern, a reform-minded leader, who took office last year as the SEIU’s president. He ticked off a number of reasons why union elections have their drawbacks: They politicize the union's staff, they are costly, they are distracting from the union's business and they often benefit incumbents. (Chicago Tribune, Democracy Dream Still Eludes Unions, April 7, 1997. Also at <http://www.lalabor.org/Andy_Stern.html#1>.)


Almost as challenging to labor as the rise of neoliberalism has been the fightback against it. When the fightback erupted in the U.S. with the massive demonstrations against the World Trade Organization on Nov. 30, 1999 in Seattle, the AFL-CIO seemed well positioned to rebuild an alliance (proclaimed as “Teamsters and Turtles”) with other progressive forces. But even on that now historic day, as we marched in a labor column 40,000 to 50,000 strong to link up with a like number of community and environmental protesters in the center of the city, we were turned away at the last minute by labor monitors and told to return to the stadium where our rally had been held. Many of us broke through to stay with those who had already shut down the city and the WTO. As soon as the thousands of labor marchers disappeared from view, the police began their rampage with volleys of tear gas grenades (Labor Eyewitness to the Battle of Seattle, <http://www.lalabor.org/Battle_of_Seattle.html>.

Since then, the AFL-CIO has been unwilling to enter an alliance of equals with other progressive forces where each would compromise some of their agenda for the sake of the alliance. The Teamsters, under James Hoffa, have broken with the Turtles and supported expanded drilling for Alaskan oil. The Machinists Union became cheerleaders for “Star Wars,” the hugely expensive and unproved anti-missile defense. That bastion of progressivism in labor, the United Auto Workers rallied to the support of their employers in opposing pollution controls and safety standards on SUVs. Of course, many in the building trades never saw a wetlands they didn’t want to build on (see ULLICO above).


The corporate and collegial models as they apply to labor have also been characterized by opposite ideological imperatives. The IWW, et.al., viewed workers around the world as the allies and comrades. The AFL-CIO adopted the views of the corporate class in identifying with the national interests of the U.S., even when they were harmful to workers in other countries (when German workers, or at least their leaders, exhibited this identification with their national interests a hundred years ago they were condemned as “social imperialists”).

This common front with the employers led the AFL-CIO’s international department to become a tool of the U.S. state department and CIA. Reforms made in this area by Sweeney now appear to be ineffective or at least, half-hearted. The AFL-CIO has cheerfully supported every U.S. military adventure, even those against progressive governments. They have done this in spite of the evidence that it is primarily working class youth - including union members and sons of union members - who fight and die for the benefit of U.S. corporations.

With extremely rare exceptions, labor leaders have been unwilling to break with the Democratic Party, even when it is obviously acting against the interests of workers and the poor. Calls for support for the Labor Party or for candidates of the Greens or Peace and Freedom have largely fallen on deaf ears. This has prevented union activists from being able to associate with third-party progressives and radicals, and with organizations based on a collegial model. It has also prevented labor from establishing links with cynical non-voters, including some of the most oppressed workers, who are effectively outside the system.

Instead, labor has sought to curry favor by means of monetary contributions to Democratic political leaders who mainly follow a pro-corporate line. Even the crumbs have not been forthcoming on important issues such as national labor law reform. Fearing to rock the boat, labor has not even promoted reforms in its best interest including establishing long-term unemployment insurance at two-thirds of salary and making it available to strikers. Nor have they fought for single-payer health care (in 1994 some California unions opposed the single-payer initiative because it would hurt their Taft-Hartley plans!), a universal basic income, a reduction in the workday, extending social security taxes to the rich, etc. Surely, a collegial-based labor movement with real democracy would have made these and other pro-labor goals a priority.


At this writing, there is no end in sight for the decline of corporate-model unions. Economic and technological trends antithetical to this union model continue to accelerate. Unions are becoming more and more insignificant in the media and in society as a whole. Yet they are desperately needed.

A real revolution in the structure and outlook of the AFL-CIO must take place, or it will surely arise independently of it. The nature of this revolution will likely be different than any of us can imagine. However, it may well include some common elements, including:

  • A collegial model where decisions are made at the lowest effective level, that is, at the department, plant, office level where the problem originates and where the real power of the union - collective action - can be most impressive.
  • An outreach to people in struggle outside the union to form broad alliances to fight common enemies. This would involve new ways of thinking about problems. For instance, it would be easier for building trades workers to oppose unneeded corporate projects that are harmful to the environment if there is a broad alliance fighting for and winning new affordable housing construction.
  • A leveling of salaries and differential prestige within unions. If individuals are attracted to working for unions because of the salary, then labor is on the wrong track. Working for a union must be seen as a cause and an honor for which individuals are not penalized financially (compared with continuing to work on the job). Ultimately, there is no good reason, except for seniority, why John Sweeney should make more money than a competent union office worker. That is, if both are doing it for the “cause.”
  • A reduction in the size and complexity of labor union employment as the movement elevates elected job stewards to the top position in the “hierarchy.”
  • A through-going democratic process from top to bottom, including direct election of all officials. This should be combined with strict term-limits to avoid continuation of an entrenched leadership.
  • A quota-based affirmative action program that will make union leaders look like the membership.
  • Move the union out of the office buildings and into the streets with store-front service centers.
  • An inverted pyramid where “higher” levels of the union are tools of local unions to accomplish goals they can’t do alone, such as, industry-wide bargaining. Trusteeships, which are often used for political purposes rather than to root out corruption, must become a thing of the past.


There is a theory called Glocalism which in true dialectical fashion says the development of globalization is causing local communities to assume more importance:

The shrinking of the world reinforces the link between the local and the global. As engagement in the globalized world increases, so too does the importance of the local places where individuals live. In part, this is a reaction to the loss of control on the vast global stage. (Katherine Harmsworth, Glocalism: The Growing Importance of Local Space in the Global Environment, Canada West Foundation, Dec. 2001, <http://www.cwf.ca>).

Glocalism may well apply to unions as well. Intensive development of the locally-based union, instead of extensive development of merged unions, may point the way to the future. It is at the local level where democracy is found in its purist expression. It is also here that the opportunity for developing links with the community are the greatest. This is not an argument for company unions, but rather for democratic associations of local unions united for a common purpose.

The future of labor may entail an understanding and appreciation of those pioneers of union democracy, the IWW’s Wobblies. Nearly one hundred years ago, they acknowledged the utility of city locals made up of workers of all types. In true social movement fashion they were concerned about the worker on the job and in the community. The free speech fights of the Wobblies were not necessary to win a better contract, but they were essential to the dignity of the working class. Today, the role of the union must be to ensure fair and equal treatment of all workers, both on and off the job.