January 12, 2005
Two Large Unions In Industrial Sector to Merge
By PAUL GLADER and KRIS MAHER
Staff Reporters of THE WALL STREET JOURNAL
TWO OF NORTH AMERICA'S LARGEST industrial unions have agreed to merge and
an 850,000-member union, the largest dedicated to the manufacturing sector.
Manufacturing has lost millions of jobs in recent years, due in large part to
consolidation and outsourcing, and has struggled with high retiree costs.
The combination of the United Steelworkers and the Paper, Allied Industrial,
Chemical and Energy Workers International Union, or PACE, is the latest and
largest of several mergers among industrial unions in recent years. This
consolidation trend comes amid dwindling employment in U.S. manufacturing.
Between 2000 and 2003, manufacturing output dropped 6% in the U.S. and
manufacturing employment fell by 2.6 million jobs, according to the Department
"Our manufacturing jobs are going overseas. We are dealing not with just
domestic companies anymore but international companies," says PACE
President Boyd Young, who will be international vice president of the combined
unions. The consolidation needs a simple majority approval of union delegates
meeting in April and is expected to be instituted over five years. PACE has
The new union will be the sixth largest within the AFL-CIO. The nation's
union, the National Education Association, with about 2.7 million members,
doesn't belong to the labor federation.
Leo Gerard, international president of the 575,000-member United Steelworkers,
would be president of the merged organization, which will be formally
United Steel, Paper & Forestry, Rubber, Manufacturing, Energy, Allied
and Service Workers International Union but will be known as the USW. Mr.
has been critical in enabling troubled steelmakers to consolidate by creating
trusts to help cover legacy costs, mainly health and retiree benefits, and
reducing the number of job classifications at industrial plants.
The union sector is as fragmented as many parts of the industrial sector as a
whole and in need of consolidation. Under Mr. Gerard's leadership, the United
Steelworkers has added lumber and health-care workers. He sees union
consolidation as critical given dwindling union membership and revenues.
About 15.8 million, or 13%, of America's wage and salary workers in 2003 were
union members, down by 369,000 from 2002, according to the Bureau of Labor
Statistics. Union membership has dropped from a high of 20% of all workers in
1983, largely as a result of changes in technology that have reduced the need
for union workers, as well as the moving of plants and capital to other
"Given the diminishing resources that industrial unions have to draw upon,
[this union merger] makes perfect sense," says Michael Leroy, a labor
professor at the University of Illinois. "It is a belated recognition of
the consolidation of corporations in their respective industries. They are
several years behind the curve on that." He says the benefits of union
consolidation include greater funds to support strikes and more extensive
databases to research contracts and labor trends.
Unions have lost members due to job losses, but they have also had difficulty
organizing. "One reason is that management is adroit in avoiding
unionization," says Marick F. Masters, professor of business administration
at the University of Pittsburgh. Another factor, he says, is that companies
frequently offer wages and benefits that are equivalent to what unions
"and that discourages employees from wanting to join a union in the first
place." But the merged union faces significant hurdles, in Prof. Masters's
view. "A merger makes you look bigger; it doesn't make your problems go
away. In some ways, you could say you've got the problems of two unions rather
One big issue for the combined unions is health-care costs for current and
retired workers, numbering about 400,000. "Every member of our union and
every member of society needs affordable health care. It is a huge
our unions now and a huge objective for our merged union," says Mr.
© 2005 Wall Street Journal