Workplace partnerships in the United States and Europe - employee participation in management

Monthly Labor Review, Oct, 1993 by Henry P. Guzda

The rapid technological changes and competitive pressures sweeping across western economies is breathing new life into efforts to establish partnerships between workers and management. But a lower union membership rate, less government regulation, and outmoded labor legislation may hinder such arrangements to a greater extent in the United States than in Europe.

Technological innovations, major improvements in the speed and nature of mass communications, regulatory reform, and other factors have made the work force a valuable and, at times, essential analytical tool in the work process. However, low skilled and labor intensive jobs have been transferred to countries with lower labor costs, although many of these countries face a serious social and economic future, and some mass assembly operations may remain in the United States to take advantage of its highly educated labor supply. In addition, jobs requiting specific skills will be of even greater value in the delivery of domestic goods and services.

Some in businesses, government, academia, and organized labor have touted worker-employer partnerships as the key to future economic survival. For example, at the 1992 convention of the United Steel Workers union, the dominant theme and aspiration of the delegates was "employee empowerment"; a few months later, the union withdrew from early negotiations with usx Corp. because the company did not make employee empowerment a priority.(1) The Journal of Commerce, a business periodical, noted that 80 percent of Fortune 500 companies, union and nonunion, have established worker involvement programs.(2) Secretary of Labor Robert B. Reich, while an instructor at the Kennedy School of Government at Harvard University, told a labor-management conference in 1988 that labor is a participant in the "new American enterprise" and that workers are the entrepreneurs of the future.(3) MIT industrial relations professor Tom Kochan has noted that changes in the workplace stem, in part, from the "rising expectations of workers for increased influence over their immediate work environment and their long term careers."(4) Even in collective bargaining involving our national pastime, Major League Baseball Players union representative Donald Fehr has said that if club owners "want a true partnership, then we want to be co-owners of the business."(5)

But to some, participation programs have negative connotations. Most trade unionists may have accepted the premise that workplace structures such as quality circles, worker committees, and joint decisionmaking will be a part of nonunion and mixed union operations. But many unionists balk at conceding power they have won in collective bargaining--increased flexibility in union work rules, job classifications, seniority provisions-for a more decentralized employee-controlled system in which management may want to return to a type of workplace domination that Henry Ford introduced in the 1920's and 1930's.(6) Despite the absence of empirical data, unions often perceive such employer driven experiments as schemes to bust or avoid unions.(7) In fact, a minority segment of the United Auto Workers vows to oppose all "jointness" programs as destructive of hard-won bargaining rights.(8)

Even scholars who disagree with that premise are concerned about the low unionization rate in the United States, compared with rates in other nations that have strong joint labor-management programs. Only 15.8 percent of American workers are union members--with approximately half that proportion in public sector unions.(9) In comparison, Denmark's unionization rate is 85 percent, Germany and Canada, 40 percent each, and the Netherlands, 25 percent.(10) Critics of some American programs argue that strict government legislation protecting union rights in these countries ensures the success of worker participation programs.

In 1989, the Department of Labor issued a four-volume report on U.S. labor law, examining legal impediments to labor-management cooperation.(11) Labor Secretary Reich and Commerce Secretary Ronald H. Brown appointed a committee of labor, management, and academic experts to further study these and other related issues.(12) Some business interests challenge the formation and intent of the commission, claiming that government wants to tilt the playing field of industrial relations in favor of organized labor. Partisans of several union and non-union plans are preparing an agenda for any proposed changes in labor laws affecting labor-management cooperation.

Despite the criticism of workplace participation proposals, a consensus has formed, predicting that such models will be part of the U.S. business landscape well into the 21st century. At a recent seminar on the German workplace participation model, known as "co-determination," one participant noted that there is no real paradigm applicable to the United States.(13)

What type of programs or paradigms can be implemented? American concepts designed by Edwards Deming, and several other efficiency experts, are the building blocks of the so-called Japanese model of worker empowerment.(14) The German system is a hybrid of its own traditional "codetermination," with standards the U.S., British, and French administrators established in occupied Germany following Word War II. The British historically practiced "joint consultation," a form of participation that evolved from 19th century guild socialism, Fabian socialism, and "job control" concepts of trade unionism forged during World War I.(15)