Those of us who are old enough to have lived through the late 1970s, 1980s, and 1990s remember a long, dismal era for the labor movement. Ronald Reagan using a federal law banning federal employees’ strikes to bust the Professional Air Traffic Controllers Organization (PATCO) in 1981 was the signal anti-union assault of that period. Yet, concessions bargaining across many industries during that time may have played an even greater role in eroding unions’ status as reliable fighters for economic justice and the right choice for workers seeking to secure middle-class jobs.
In 2023, negotiations between the Teamsters and UPS, and just-started negotiations between the United Auto Workers (UAW) and the big three U.S. automakers, mark a potentially critical turning point in expurgating the lasting effects of the concessions bargaining era from union members’ lives. If understood in this way, these negotiations may help to reset unions’ relationship with workers in the logistics, warehousing, transportation, and manufacturing industries, and perhaps beyond. The concessions bargaining era, finally, may be history.
The Concessions Bargaining Era
During the late 1970s, 1980s, and 1990s, unions in some industries found themselves making concessions to address economic challenges, principally those caused by globalization and technological advancements. For the first time, American workers faced large-scale competition from both foreign workers, many earning wages that were a fraction of U.S. wages, and labor-replacing automation, including robotics. The unions were caught in a trap: fight to continue robust wages and benefits for their members and risk job loss and plant closures, or make concessions in return for a vague promise that their employers and industries would survive and sustain employment. Of course, many did not survive. Communities across the country, and the American middle class, were hollowed out by plant closures, layoffs, downsizing, offshoring, and deregulation.
There are numerous examples. In the late 1970s, the U.S. auto industry struggled due to new competition from foreign automakers, particularly Japanese car manufacturers. The UAW faced a difficult choice. As part of the Chrysler bailout in 1979, for example, the UAW made concessions, including wage freezes, reduced benefits, and job cuts, to help the company stay afloat and preserve jobs. During the 1970s and early 1980s, the American steel and aluminum industries faced significant challenges from globalization and economic recession. In response, major employers sought concessions from the United Steelworkers of America (USW), including wage freezes, reduced benefits, and layoffs, aimed at reducing costs and maintaining industry viability.
The passage of the Airline Deregulation Act in 1978 drove major restructuring and increased competition in the airline industry putting pressure on unions to make concessions that were supposed to ensure the survival of individual airlines and protect jobs. Unions representing pilots, flight attendants, and other airline workers faced wage reductions, changes in work rules, and reduced benefits. In one notorious example, Eastern Airlines, under the leadership of Frank Lorenzo, demanded significant concessions from the airline's unions, including wage reductions and work rule changes. The conflict escalated into a strike in 1989, which ultimately led to Eastern Airlines’s dissolution.
Airline deregulation was not the only way in which public policy helped corner unions into Hobson's choices leading to concessions bargaining. Trucking and telecommunications also were deregulated. During the 1990s, the United States entered into a series of trade agreements that facilitated offshoring many jobs, especially manufacturing jobs, that had been pillars of the American middle class: NAFTA in 1992, Permanent Normal Trade Relations and World Trade Organization accession for China in 2001, CAFTA in 2005, among others. With these agreements, the U.S. opted to referee a global system of trade rules and processes rather than fight unapologetically for American workers in cutthroat global competition.
Dislocation resulting from trade and technology was made much worse as workers were deprived of their ability to exercise their rights to organize and bargain collectively to improve the quality of jobs in new industries. Beginning during President Jimmy Carter’s administration in the late 1970s, Congress failed several times to reform labor law to undo the damage caused by the Taft-Hartley Act of 1947 and respond to anti-union, anti-worker Supreme Court interpretations of the National Labor Relations Act. Organizing through the traditional legal channels became very difficult and highly risky for workers. Their unions felt added pressure to preserve their members' existing jobs.
Are Concessions Bargaining’s Effects History?
Both Sean O’Brien, the new Teamsters president, and Shawn Fain, the new UAW president, campaigned on platforms that included restoring the wages and benefits lost through past concessions bargaining. Central to both unions' efforts at the bargaining table will be eliminating two-tiered employment systems that pay less and provide worse benefits to newer employees than longer tenured employees. For both unions, this two-tiered system has been an affront to solidarity and a continuing failure.
According to press reports, the Teamsters have already won an end to the “22.4” two-tiered system, widely hated by the Teamsters’ UPS members, in an tentative agreement. The question of whether wages for part-time UPS employees will rise to a level somewhat closer to full-time pay is yet to be determined as of this writing. Any meaningful progress on that issue will further help with restoring past concessions.
UAW negotiations with the big three automakers have just begun and, at least as far as we know, no tentative agreements on the automakers’ two-tiered employment system have been reached. President Fain wants to go much further than eliminating the tiers. He has told the UAW members working for the "big three" that these negotiations will restore 20 years of wage and benefits concessions. Looming over the negotiations is the reality that the UAW faces an existential threat from the transition from internal combustion-engine vehicles to electric vehicles (EV).
While EV assembly is likely to take place in facilities covered by UAW agreements, electric vehicle batteries --- EVs' largest component --- will be manufactured by joint ventures between the automakers and other firms in new facilities that are not covered by UAW agreements. If these negotiations were taking place during the 1970s, 1980s, and 1990s, the automakers' paradigm-shifting transition from production of one type of vehicle to another --- made more risky by the intense competition between EV manufacturers --- might have created a predicate for concession bargaining. But not in 2023. The UAW has made clear it is aiming in the opposition direction: higher wages, better benefits, and more union jobs. Stellantis, General Motors, and Ford have not suggested they are seeking concessions, probably because they know they are not possible today.
It’s too early to say that concessions bargaining and its hangover from the 1970s, 1980s, and 1990s are history, but the two large negotiations underway right now deserve our attention and close study. The outcomes of these negotiations will set important precedents that could reshape the dynamics of collective bargaining in many industries for years to come.
In other words, reports of the death of the concessions bargaining era may be premature, but only by a few weeks or months.
