Thursday, August 17, 2006

Whalen, Will, and Workers

There are two views on President Reagan's firing of striking air traffic controllers, 25 years ago. Here is a recent op/ed piece by Charles J. Whalen:

This month marks the 25th anniversary of one of the most devastating strikes in modern U.S. labor history. On Aug. 3, 1981, more than 12,000 members of the Professional Air Traffic Controllers Organization walked off their jobs.

It was not the first illegal strike by public-sector workers, but conventional means of resolving such cases failed to impress President Ronald Reagan: He discharged and permanently replaced those who would not promptly return to work.

The U.S. labor movement has never recovered, and working families across the nation continue to pay the price.

In the immediate aftermath of the PATCO strike, many observers reported that Reagan's action marked a turning point in U.S. labor relations.

* * *

In the wake of Reagan's action against PATCO, a number of unionized firms demanded major concessions and threatened permanent replacement as the alternative. Many unorganized workers quickly got the message, and employers have often driven home the point during organizing drives. The result has been downward pressure on workers' wages.

There are also more visible costs. The use of permanent replacements during a 1987-88 strike against International Paper by its union in Jay, Maine, "tore the community apart," according to research by Julius Getman of the University of Texas law school. After the strike was broken, some union members returned to work alongside their replacements, and even years later, area residents on all sides of the dispute felt surrounded by hatred and bitterness at work and in the community. Getman reports that eventually even the company's chief executive concluded that replacing strikers "was a major mistake that cost the company more than a billion dollars."

The labor movement has, of course, taken the biggest hit. In 2005, 12.5 percent of U.S. workers were union members, according to the Labor Department. In 1983, the first year for which comparable data are available, the membership rate was 20.1 percent.

* * *

Labor watchers knew the PATCO episode was a watershed, but it's unlikely that even the most pessimistic witnesses expected it would cast such a long, dark shadow.

Charles J. Whalen is a labor-market economist and editor of Perspectives on Work, a journal published by the Labor and Employment Relations Association. He wrote this article for the Washington Post.

And here is an oldie-but-goodie from George Will:

Ronald Reagan, unlike all but 10 or so Presidents, was a world figure whose career will interest historians for centuries, and centuries hence his greatness will be, and should be, measured primarily by what happened in Europe, as a glorious echo of his presidency, in the three years after he left the White House. [* * *]

[* * *] Arguably, it began with a seemingly unrelated event in the first year of his first term.

In 1981, when the nation's air-traffic controllers threatened to do what the law forbade them to d0--strike--Reagan warned that if they did they would be fired. When they struck in August, Reagan announced that the strikers would be terminated in two days. By firing the controllers, Reagan, the only union man--he had been head of the Screen Actors Guild--ever to be president, destroyed a union, the Professional Air Traffic Controllers Organization (PATCO). This has often, and not incorrectly, been called a defining episode of the Reagan presidency because it notified foreign leaders, not least those of the Soviet Union, that he said what he meant and meant what he said.

But now, more than two astonishing decades on, it also is reasonable to conclude that Reagan's fracas with the controllers had huge economic consequences, domestic and foreign. It altered basic attitudes about relations between business and labor in ways that quickly redounded to the benefit of the nation, and not least the benefit of American workers. It produced a cultural shift, a new sense of what can be appropriate in business management: layoffs can be justifiable even when a company is profitable, if the layoffs will improve productivity and profitability. Within a few years, both AT&T and Procter Gamble, although quite profitable at the time, implemented large layoffs, without arousing significant protests.

Reagan's action against the air-traffic controllers came on the eve of the explosive growth of information technologies, and some astute people, including Alan Greenspan, believe that Reagan's action facilitated that growth.

Since 1981, labor in America has prospered because it is less protected. In theory, it might seem that since the showdown with PATCO, business's informal protocol about layoffs must have resulted in rising unemployment. The reverse has happened. In the post-PATCO climate of business operations, employers have been more inclined to hire because they know that if the hiring proves to be improvident, those hired can be discharged. The propensity to hire has risen much more than the propensity to fire. In all of America's post-Civil War era of industrialization, unemployment has never been as low for as long as it has generally been in the years since the extraordinary expansion that began during Reagan's first term.

* * *

Reagan always believed that the world was watching America. Indeed, he thought the point of America was to be watched—to be exemplary. Hence the complete sincerity of his reiterated references to the City on the Hill. And when the democratic revolution against communism came, Tiananmen Square in Beijing and Wenceslas Square in Prague and points in between rang with the rhetoric of America's third and 16th presidents. The 40th president was not surprised.

I should add a third perspective. Being in junior high at the time, I recall seeing a Mad Magazine cartoon showing a Jeykll and Hyde-like Reagan, supporting the Solidarity union in Poland, but firing the PATCO strikers. If memory serves, however, Solidarity was not asking merely for higher wages and better working conditions.


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