INDUSTRIAL RELATIONS

Most definitions of industrial relations acknowledge that industrial relations involves the complex interplay among management, workers and their representatives, and the government. Each of these three players has different needs and goals that determine how they interact with the other two parties. In general, management's goals center upon labor costs, productivity, and profitability. In contrast, workers and their representatives (i.e., unions) are concerned with securing high wages and benefits, safe working conditions, fulfilling work, and a voice in the workplace. Finally, as the representative of the members of the society in which employers and unions reside, the government's objectives include balancing the rights of both labor and management. Perhaps even more important, the government has the obligation to protect the rights of the members of society by maintaining relative harmony between workers and employers. In the U.S. private sector, industrial relations are governed by the National Labor Relations Act (1935, as amended).

There is a three-tier structure of industrial relations in the United States. Local unions deal with the daily interaction with employers at the workplace level. Typically, these local unions are affiliated with a national union such as the Service Employees International Union, which, as of 2005, is the largest national union in the United States. Labor federations, like the AFL-CIO, serve as umbrella organizations for national unions and provide overall direction for the labor movement, as well as services like training and government lobbying. However, the lack of advancement of organized labor in recent years has caused some national unions to leave the AFL-CIO and attempt to form a competing labor federation.

Industrial relations have changed substantially in the United States since 1980; there has been a change in the shared ideology among the three players. Prior to 1980, all three players acknowledged the legitimacy of the other players' roles. Employers kept their relationship with unions at arms length, neither embracing unions nor aggressively seeking to destroy them. This produced some level of stability within the industrial relations system. However, since 1980 employers have moved away from the "arms length" relationship with unions and have either pursued greater collaboration with labor or sought to aggressively suppress unionization, even to the point of intentionally violating U.S. labor law.

The percentage of workers represented by unions (i.e., union density) in the United States has decreased from a high of 35 percent in 1945 to 12.5 percent by 2005. Interestingly, union density is substantially greater in the public sector than in the private sector. In the public sector, approximately 36 percent of government workers are represented by unions, with the highest density being in local government (41 percent). This level of unionization in the public sector may decline in the future, however, given the trend toward privatizing government services. In the private sector, only 8 percent of workers are represented by unions, with the transportation industry and utilities maintaining the highest level of union density (25 percent). Union density in the private sector is approximately half of what it was in 1983. Union membership rates vary considerably by state. New York, Hawaii, Michigan, and Alaska have the highest membership rates—with 25 percent, 24 percent, 22 percent, and 20 percent, respectively—while North Carolina and South Carolina have the lowest rates (approximately 3 percent). As of 2005, full-time wage and salary workers who are represented by a union make more than those workers not represented by a union ($781 versus $612).

There are many reasons for the decline in union density other than the change in management attitudes toward unions. Employment has moved from manufacturing jobs and other jobs that have traditionally been represented by unions (e.g., railroads and mining) to more service and high technology jobs. There are more white collar and part-time jobs now than ever before, which has also contributed to the decline in union density because it is harder for unions to organize people in these jobs. Furthermore, employers have learned that using positive human resource management practices—like installing formal grievance systems, comprehensive benefit plans, and worker involvement programs—suppresses union organizing activity. Finally, in the past several decades the government has increasingly provided for the protection of workers' rights by passing a variety of legislative actions, including the Civil Rights Act (1964), the Occupational Safety and Health Act (1970), the Americans with Disabilities Act (1990), and the Family and Medical Leave Act (1993).

The number of strikes by unions has declined in the last two decades due to the fact that employees have a greater understanding of the impact of globalization on competition. Also, more employees are shareholders now than ever before. Some of these same factors appear to be reducing union density levels in other developed nations, although Canada is an exception; it has twice the union density of the United States.

In 1993 the Dunlop Commission was established by the Clinton Administration to propose ways to reform the labor policies set forth in the National Labor Relations Act. In general, the Commission concluded that labor law needed to be altered to make it easier for workers to seek union representation and to remove the constraints upon worker involvement. However, these recommendations have not been adopted, even though both labor and management acknowledge the need to change the antiquated labor laws that prevent closer, more trusting relations and hamper the flexibility needed by businesses to compete in the global economy. Consequently, there is a continuing need for labor law that reflects the changes that have occurred since the National Labor Relations Act was passed in 1935.