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Labor Unions in the New Economy

The future of the labor union is increasingly coming into question with the relentless assault on the rights of workers to organize, resulting in the lowest levels of union membership since the 1930s. Part of this comes from the “Right to Work” or “Corporate Servitude” legislation passed in states across the country, Michigan being the latest victim. The now infamous Citizens United ruling further unleashed the power of corporate coffers to influence politics, furthering a vitriolic hatred for unions by Tea Party dogmatics following the Koch Party line. Labor unions are in dire need of innovation to move past their 19th and 20th century models into a 21st century form that’s capable of weathering economic, political, and environmental turbulence. The future of unions rests with their ability, just like the green economy and new economy movements, to create immediate solutions for marginalized communities along with overarching, systemic alternatives to our broken economic and political systems.

Some of the most innovative work happening in the United States is around organizing low-wage workers at Walmart’s distribution centers and retail stores, domestic workers, and food workers in and downstream of restaurants.  All these efforts can help unions build worker power in the 21st century. The strategy of the Blue-Green Alliance and others is to rebuild a unionized manufacturing base around cleantech, green chemistry, and related industries, which will also help grow the labor movement in this precarious century. All these are slow going and have yet to prove their ability to grow to scale no matter how amazing and inspiring they continue to be. On a completely different side of the modern labor union, many are using their pension funds to do some innovative work.

The most often cited example of unions investing in solutions is through what’s known as “economically targeted investments.” Different strategies are included in ETIs from investing in critical infrastructure (that hires union workers), building affordable housing (also hiring union worker), and even the large scale weatherization of single and multi-family housing across much of the state of California (hiring union workers too).  Some of the more forward thinking unions like CALSTERS and CALPERS are providing ETIs, while a growing number are utilizing their pension funds to invest in multiple strategies that generate positive social change, while earning a market rate return.

Other investment strategies include moving money out of the big banks and into community banks and credit unions like we saw first with Wisconsin AFL-CIO members who closed accounts at a bank whose CEO funneled money into the Walker campaign.  Unions like the AFL-CIO, SEIU, CALSTERS, LIUNA, IBT, and others are using their funds to invest in and push for things like CEO say on pay, disclosure of campaign contributions, disclosure and reduction of carbon emissions, addressing issues of water pollution, workers rights, etc.  Between this and investing in funds that screen out many of the worst companies in the world, are a part of a global “sustainable and socially responsible investment” movement with assets under management globally greater than $3.07 Trillion by the end of 2010.  Additionally, “shareholder resolution” efforts have grown in the last 40 years to cover a range of topics from animal rights and climate change to diversity, social issues, and more. What we have not seen though are shareholder resolutions demanding the democratic restructuring of the modern multinational corporation to root decision-making authority and ownership in communities and the workforce, which could be an extremely effective strategy going forward.

Other union pensions work collectively through jointly sponsored investment vehicles like Heartland Strategies to provide different forms of financing to cleantech ventures and other “small” to medium sized entities (SMEs). Innovative “worker-owned” venture capital funds like these help build companies with a union workforce and earn a return on investment for the pension funds at the same time. These developments are impactful and meaningful for an organizational model that’s 100+ years old, but unions have a long way to go before they’ll effectively be able to thrive in our rapidly changing world.

Perhaps the most innovative and inspiring development by unions in 21st century U.S. is the partnership between the Mondragon Cooperative Corporation and the United Steel Workers union. The intent of the partnership is to expand what they call “union coops” around the country.  This leverages successful worker ownership strategies like Employee Shared Ownership Plans (ESOP) to transfer full ownership of companies to workers through worker cooperative structures, while having a union committee that ensures safe working conditions and builds the national power of worker self-determination on a grander scale. This partnership has been around since late October 2009 and has recently started to help launch start-up worker cooperative development in Pittsburgh and Cincinnati.


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Outside of the U.S. International Labour Organization (ILO) has been pioneering work around the world with their “Job Creation and Enterprise Development Project.” This project is at the intersection of a global sustainable development movement many believe is a thinly veiled predatory ‘green capitalism’ (there’s some truth to that but not entirely) with a global social development movement meant to foster solutions for the worst off as the primary goal of development. The ILO works with its member unions from all around the world to drive pension fund dollars and forms of organizing that fall far outside of what unions in the U.S. consider part of their advocacy and development strategies.

From helping communities build microenterprises, non-profits developing social enterprises, launching worker-owned businesses, to more familiar cleantech and related businesses, the ILO is utilizing the power of unions to build a fundamentally different type of economy from the ground up. Right next door in Canada, unions got together during the recession of the 1980s to jointly capitalize something called the Quebec Solidarity Fund to help finance social and solidarity economy entities. They even passed legislation at the national level to allow workers to choose to invest a greater portion of the pensions in this and other solidarity funds that help launch cooperatives, social enterprises, etc.  Certainly the Quebec model is one to emulate in the U.S.  There are others too.

Perhaps the most innovation labor union building itself into a force for positive change in the 21st century is the Singapore’s National Trade Union Congress.  What’s fundamentally different about the NTUC is the question of ownership and long term development strategy. Certainly the USW/Mondragon partnership is a welcome addition, but NTUC is much more directly applicable to the labor union context than Mondragon. NTUC is a joint venture of many of the nation’s unions to catalyze worker owned businesses for communities all across the country.  Over the years, they’ve built thousands of businesses owned by the workers, yet also owned in part by the NTUC, bringing them together into a national federation of worker owned businesses and a broader labor union at the same time.

One could certainly say that they don’t focus enough on growth industries in the manufacturing sector like cleantech, but they’re focused on building a federation of service businesses needed by workers and communities of all income levels.  This includes credit unions, elder care facilities, day care facilities, recreation businesses, retail stores, grocery stores, health insurance cooperatives, and more that are all worker owned.  On top of this, there all federated together through the NTUC’s partial ownership of each, which leverages that additional power of a national union through pension funds, advocacy, and so much more. They’re building their own bottom up economy with an integrated capacity for political change, uniting the interest of unions and communities of diverse income levels nationwide.

This is all to say that unions in the U.S. desperately need to embrace global models like the work the ILO is coordinating, and especially the NTUC.  Unions here should revamp their own development strategies to build immediate solutions for local and marginalized communities like the NTUC.  By combining pension fund dollars with organizing efforts to direct capital to solutions jointly owned by the workers and a national federation of unions through a central entity like the NTUC, they’d become a vastly more powerful force capable of transcending the turbulence of the crisis-ridden future we are inheriting.  Unions and doing some amazing things in the U.S. as we’ll see in the upcoming annual Good Jobs Green Jobs Conference this April.  But to thrive in a crisis-ridden century they must focus on building a triple bottom line economy in solidarity with marginalized communities at the national level. Unions must build local economic solutions like the NTUC, expanding a stronger alternative and federated economy that helps workers and communities transition away from destructive corporations that act as the feudal lords of an American Dream turned Nightmare.

Atlee McFellin

Atlee McFellin is a co-founder & principal of SymCenter. Atlee specializes in the creation of innovative economic development strategies and programs. Prior to founding SymCenter, Atlee worked with The Democracy Collaborative to create comprehensive strategies for cities around the country based on the Evergreen Cooperatives in Cleveland, OH. He is also the board co-chair of the New Economy Network, a national network of diverse organizations building a new economy from the ground up.

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