News Release

Global capital mobility stifles union organizing

Peer-Reviewed Publication

Cornell University

ITHACA, N.Y. -- A rise in threats to close plants and move capital investments elsewhere is effectively keeping U.S. workers from organizing and, by implication, from making real economic gains in a booming economy, a study by Cornell labor experts shows.

The study concluded that international trade and investment policies, combined with ineffective labor laws, have created a climate that has emboldened employers to threaten to close, or actually close, their plants to avoid unionization. The result is that many workers are experiencing no real wage gains and more job insecurity today, during the longest economic boom in U.S. history, than they were during the depths of the 1980-91 recession. By examining the relationship between capital mobility, worker insecurity, union organization and wages, the study offers insights into why the average American worker has shared so few of the gains of economic expansion.

The study, "Uneasy Terrain: The Impact of Capital Mobility on Workers, Wages and Union Organizing," was contracted by the United States Trade Deficit Review Commission. Kate Bronfenbrenner, director of labor education research at Cornell University and a faculty member in the university's School of Industrial and Labor Relations (ILR), led the study, which was conducted by a team of researchers at the ILR School.

"We found that the recent acceleration in capital mobility has had a devastating impact on the extent and nature of union organizing campaigns," wrote the researchers in their executive summary. "Where employers can credibly threaten to shut down or move their operations in response to union activity, they do so in large numbers."

"In effect, employers are using the global economy to intimidate workers from organizing by putting out the threat that they plan to move their operations overseas," said Bronfenbrenner.

The researchers used surveys, personal interviews, documents and electronic databases to collect detailed information on the extent, nature and impact of plant closings and plant closing threats within the private sector of the U.S. economy, for a random sample of more than 400 National Labor Relations Board certification union-election campaigns that took place in 1998 and 1999.

The study found that overall, more than half of all employers made threats to close all or part of their plants during union organizing drives. The threat rate was significantly higher, 68 percent, in mobile industries such as manufacturing, communication and wholesale/distribution, compared with a 36 percent threat rate in relatively immobile industries such as construction, health care, education, retail and other services.

The researchers also found that threats of plant closings were unrelated to the financial condition of the company, with threats no less likely to occur in companies in a stable financial condition than in those on the edge of bankruptcy. Instead, threats seemed to be motivated mainly by hostile feelings toward unions among employers.

More than three-quarters of the campaigns where threats to close plants occurred also involved aggressive employer behavior, much of it illegal, such as firing employees for union activity, offering wage increases or benefit improvements during the organizing campaign, using electronic surveillance to monitor union activity and bribing workers to vote against the union.

Threats to close plants also appear to be an effective way for companies to crush union drives, the study found. The win rate for union campaigns at companies that threatened to close plants was 38 percent, compared with the 51 percent win rate at units where no such threats were made.

The trend can be reversed or slowed if strong and enforceable labor standards are part of U.S. trade agreements, and U.S. tax laws include disincentives to discourage companies from moving their operations out of the country, wrote the researchers. They also proposed stiffer penalties for employers who violate U.S. labor laws during organizing campaigns, and amendments to current labor laws to make it easier for unionized workers to get union recognition and win a first contract.

The members of the Cornell research team were: Bronfenbrenner, Jim Rundle, David Turner, Anne Sieverding, Mark Keith, Chih Ling Lim, Maggie Mateer, Brett Ives and Zachary Mykins. Cornell graduate and undergraduate students involved in the project were: Rob Hickey, Lesley Finch, Liz Chimienti, Carolyn Gleason, Kate Rubin and Susan Cremin. Former NLRB General Counsel Fred Feinstein and Professor Tom Juravich, director of the Labor Relations and Research Center at the University of Massachusetts-Amherst, consulted on research design and analysis.

###

For a copy of the Capital Mobility report, contact the Labor Education Research group at Cornell, (607) 254-4749 or visit this web site: http://www.ustdrc.gov/research/bronfenbrenner.pdf.


Disclaimer: AAAS and EurekAlert! are not responsible for the accuracy of news releases posted to EurekAlert! by contributing institutions or for the use of any information through the EurekAlert system.