Destructive Achievers in the Labor Movement

     Given enough time, complexity of issues, and organizational growth, Destructive Achievers will eventually corrupt any system or movement. Their ideological drive for power and the immediate needs of the group blinds them to the group's true long-term interests. It can be just as true of labor unions as it is of corporations.

     The July 14, 2003 issue of Business Week describes how ideologically driven leaders actually hurt the true interests of their followers.

A New Deal in Europe?

With labor's power flagging, serious reforms may be around the corner

Labor leaders called it a gesture of solidarity, but many Germans saw it as an act of economic insanity. The militant IG Metall union last year demanded that auto, steel, and engineering workers in eastern Germany work the same 35 hours a week as their comrades in the West—a move that would have encouraged companies to flee across the border to Poland or other low-cost countries. When talks went nowhere, the union in June backed up its demand with strikes, forcing auto maker BMW, among others, to shut down some production lines.

Dumb move. Even some union members were appalled by the walkouts in a region that badly needs investment and where many companies are barely surviving. The public reaction was overwhelmingly negative, a sign that ordinary Germans have come to see unions not as defenders of the common man but as obstacles to urgently needed change. Even union members condemned the strikes by a margin of more than 2 to 1, according to a poll for broadcaster ZDF by Mannheim-based Elections Research Group.

The debacle has already set off an internal power struggle that could bring a more moderate generation of labor leaders to the fore. And it follows earlier failure by the unions to derail labor-market reforms proposed by Chancellor Gerhard Schröder. "The unions are taking it on the chin everywhere," says John C. Kornblum, chairman of the German unit of investment bank Lazard Frères & Co. and former U.S. ambassador to Germany.

Germany isn't the only country where unions are feeling the sting of defeat. Left-wing labor defenders of the status quo have suffered serious setbacks recently in France and Italy, two other European countries where excess regulation smothers growth. In the past few weeks, France's center-right government faced down once-powerful unions to win the overhaul of the publicly financed pension system. And in Italy, voters rebuffed a union-backed effort to increase job protections. These suggest that voters in core Europe may finally be willing to accept rollbacks in the cherished welfare state to get the region's stagnant economy rolling again….

Of course, even if all the reforms go through, Germans and French will still work less than Americans or Britons and enjoy more generous benefits. Still, the signs are clear that Europeans have begun swinging away from reflexive social protectionism. "We just can't ask for everything from the government any more," says Béatrice Fages, a Paris-based corporate communications specialist….

The far left is weaker than it has been in decades. Politicians across the spectrum realize they must launch reforms to save their jobs—always the best incentive. The mood favors change—change that could yet set the stage for growth.

     Of course, Business Week does not address the fundamental reason for Unions' lack of power: the successful,world-wide attack on wages and decent working conditions by conservative politicians in all major countries.

     These politicians have created the situation in which any country that insists on protecting its workers will suffer a loss of industry, including Germany. Although it is not the fault of unions, they are not blameless.

     Instead of recognizing and adapting to present political realities, union leaders have chosen to live in the past—no matter what the cost—and rigidly insist on achieving unachievable goals. Admittedly, their goals should be achievable, but the political situation prevents it.

     This problem has roots in the distant past. Instead of spending union resources to gain a broader base of membership, they used their power to gain ever more incomes and benefits for present members. Lesser-paid nonunionized workers resented the superior incomes of union members, and eventually blamed them for the loss of industry that fled to third world countries—even though the loss of industry was a planned result of conservative politicians across the world.

     In the U.S., union leaders are belatedly realizing that it is far more important to change the political climate and increase membership than to fight for greater benefits for present members. It's not that workers don't deserve better incomes and working conditions—it's just that voters' past political indifference has resulted in a radical pro-business environment.

    Union members who became affluent in earlier decades, and voted Republican for the tax benefits and to get back at "welfare bums,"—and who were indifferent about the problems of lesser-paid workers—are about to realize the devastating results of their selfish actions.



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