The Death of Trade Unionism, and Toward the Birth of a Labor 3.

0
David Rolf

This rough draft is being circulated by the author for feedback and discussion purposes only. Permission
is not granted to forward, share, cite, quote from, or publish it in any media in part or in whole. The
thoughts expressed here are the authors own and do not necessarily reflect the views of any
organization. 2012 David M. Rolf

Introduction
The American Dream is at risk. Half-a-decade of recession has laid bare shocking inequality in
America. Layoffs, wage cuts, regressive taxes, unemployment, and crushing debt have driven millions
of Americans from the ranks of our once robust middle class. For the first time in American history, 90
percent of our children will live less prosperous lives than their elders. The American Dream, never
equally shared in our nations history but always passed along more completely to each subsequent
generation, is increasingly out of reach for most American workers.
The crisis that todays workers face began decades ago. It is the result of a relentless forty-year
assault on the values and institutions that created widespread prosperity during much of Americas 20th
century. Right-wing pundits and corporate apologists say that were broke. They argue that the
hardship that todays workers experience is the unpreventable hangover from decades of reckless social
spending, and our workers inability to compete in a globalized market place. They assure us if we
privilege job creators (e.g. corporations and billionaires) with low tax rates and few regulations that
the market will reward those who work hard. These are the greatest lies of our time.
Americas economy is the largest in the world, and our workers are the most productive. While
globalization has resulted in dramatic job losses due to off-shoring in specific sectors (clothing, textiles,
electronic components, call centers, etc.), it has almost nothing to do with declining or stagnant wages
and in sectors like retail, health care services, hospitality, transportation, agriculture, construction,
government, property services, and personal services, which collectively employ tens of millions of
Americans in jobs which are both un-exportable and increasingly low-wage.
This phenomenon is not an accident; it is the product of decades of right-wing and corporate
policies designed to dismantle the hard won victories of generations of American workers, and
redistribute income and wealth to the wealthy. Even as workers struggle through the fifth year of
recession, our largest corporations post healthy profits, generously reward shareholders, and continue
to increase executive pay. Americas workers, the 99%, have not shared in the current recovery.
The once powerful industrial labor unions that built the mid-century American middle class are
in a deep crisis and are no longer able to protect the interests of American workers with the scale and
power necessary to reverse contemporary economic trends. The strategies and tactics that weve
pursued since the 1947 Taft Hartley Amendments are out-of-date and have demonstrably failed to
produce lasting economic power for workers. We must look to the future and invest our resources in
new organizational models that respond to our contemporary economy and the needs of todays
workers.
Todays legacy unions have an important role to play, perhaps the most important role to play,
in determining whether a new, 21st-century model of worker power will develop. Whats now required
of us in labor is not a sentimental longing for the New Deal, an attempt to turn back the clock to a
different economy and a different era, or a return to the collective bargaining model that worked well in
an era of mass industrial production, vertical corporate structures, and lifelong employment.

This paper reviews the economic crisis facing American workers, and the role of labor in
producing economic gains for workers. It offers a critique of contemporary labor law, the collective
bargaining model that organizes much of the activities of American labor unions, and the culture and
activities of labor unions themselves. It concludes that, except in a small number of vertically-integrated
or heavily regulated industries, the model of collective bargaining that animated 20th century labor law
is out-of-date and irrelevant to increasing numbers of workers. It also concludes that this model cannot
be revived to the scale and power needed to solve the economic problems facing American workers.
Finally, this paper offers a proposal that todays legacy unions combine their resources to invest
in the future through the creation of two independent, but related, institutions focused on research,
development, testing, funding and scaling new models of worker organization, advocacy and power that
can truly win for todays working people. The proposed institutions would focus on identifying and
scaling projects that meet three key criteria. They must be: (1) powerful enough to change workers lives
economically; (2) scalable to millions or tens of millions of workers; and (3) financially self-sustaining.
Americas 21st Century Economy: We Are Becoming a Low Wage Nation
America is becoming a low-wage nation, and the youre on your own economy has already
arrived. Consider just a handful of the many statistics that illustrate these points.

U.S. income inequality is greater than at any point since before the Great Depression, and
greater than in any of our peer nations.
Family income, which grew roughly equally among all 5 quintiles of income-earners between the
2nd World War and 1979, has grown significantly since 1980 only for the top quintile of incomeearners, and most dramatically only for the top 1%.
93% of the income gains generated by the economic recovery have gone to the top 1% of
income-earners.
The link between worker productivity and wages was broken in the late 1970s; since then,
wages have flat-lined even as worker productivity dramatically increased.
Median family income is now lower than it was 30 years ago.
The middle classs share of national income is at its lowest point in contemporary history.
1% of the U.S. population controls 43% of the nations wealth; the top 5% controls 73%.
Traditional defined-benefit pensions now cover only 5% of private sector workers.
Accordingly, retirement is becoming a luxury for many: Since 1977, there has been a 172%
increase in employment after age 75.
Housing, health care, and college costs have risen between 2 and 7 times faster than wages.
Among black and Latino/Hispanic Americans (our future majority population) median household
net worth, including home equity, is approximately 1/20th that of white Americans.
But not only traditionally oppressed minorities are suffering: even college educated men have
seen a decline in real wages since the late 1960s, and for men with less than a high school
education spending power has declined by 66%.

Corporations pay well under 10% of all federal taxes, down from historic highs of over 30% in
the middle of the last century; many corporations pay less in taxes than their CEOs receive in
pay, and some corporations pay no federal income tax at all.
Educational debt has almost tripled in the last seven years alone, to nearly $1 trillion, $43 billion
of which is owed by Americans over age 60.
The vast majority of minimum wage earners (77%) are adults, and the vast majority (66%) work
for large, profitable, national or multi-national corporations which have hardly been stingy with
shareholder dividends or CEO compensation.
As of 2006, 31% of American workers were temporary workers, contract-workers, on-call
workers, day laborers, freelancers, and part-timers. This number doesnt even include guest
workers or grey-market/cash-economy workers.
In 2009, a shockingly-high 24% of American workers were employed in low-wage jobs (those for
whom full-time employment adds up to roughly 200% of the Federal Poverty Line), but if current
trends continue, by 2020, 48.2% of workers will be in low-wage jobs.
Contrary to the perspective of allies who believe that education is the panacea to the decline of
the American middle class, 17 of the 20 fastest-growing occupations require a high-school
education or less.

American Unions
Organized labor has played a crucial role in improving American workers lives since before the
Declaration of Independence, but the forms and strategies of worker organizations have changed
significantly over time. History shows that each new era of economic organization in America, from the
early, colonial agrarian system, to the industrial revolution and the 20th century Fordist economy, was
accompanied by the emergence of new models for worker organization and new strategies for building
worker power. Though it is widely acknowledged that Americas 20th century industrial economy has
given way to a new era of economic organization, one that is globalized, decentralized, and where the
employment relationship has changed dramatically, for a variety of reasons, labor unions still function
under an early- 20th century model. This has led to decades of declining power and increasing
irrelevance to todays workers.
Labor 1.0:
In colonial America, skilled craftsmen organized guilds, which functioned to produce skilled
workers for small, pre-industrial workshops, and to control industry wages and working conditions. The
early American industrial revolution and the advent of the wage-labor system transformed the American
labor market and undermined the power of guilds as viable worker organizations. The new economy
required new forms of worker organization and new strategies to build worker power. During the 19th
and early 20th centuries, many models of labor activity and activism flourished, with widely varying
goals, strategies and effectiveness. Worker organizations included secret societies, Eight-Hour Day
Clubs, exclusionist craft guilds dedicated to preserving the economic privileges of white, male skilled
workers, anarcho-syndicalist multi-industry unions, anti-sweatshop crusades, and socialist political

organizations. Labor 1.0 was a period of 150 years where workers and worker advocates developed
vastly different and competing models for achieving their aims.
Labor 2.0:
The second major era of American labor organizing, Labor 2.0, developed during the second
industrial revolution in America, and accompanied the emergence of Fordist models of production and
rapidly expanding industrial economy. The 1935 National Labor Relations Act (or Wagner Act), which
serves as the primary model for all of our nations collective bargaining laws was enacted amidst a
national landscape of massive industrial strikes, a great depression, fears of a growing Communist
movement abroad (and a comparatively small one here), and a broad political commitment to national
economic recovery. That law helped give birth to the American labor movement of the 20th century and
enshrined collective bargaining as the dominant mode of worker organizing.
The Wagner Act established the principle that a majority of workers in a workplace could choose
exclusive union representation and that their employer would have to bargain with their union over
wages, hours, and employment conditions. The Act essentially nationalized, legalized, normalized and
bureaucratized a particular regime of labor and industrial relations in the private sector, one based on
majority rule, the balancing of the interests of labor and capital, regulating strike activity, and
emphasizing a core set of employer-based bargains and workplace-based rights.
The unions, old and new, that organized millions of workers over the subsequent two decades in
turn helped give birth to the American middle class. In what were then the most industrialized and
populous regions of the country union collective bargaining transformed the nature of employment and
the quality of jobs available to wage-earners.
Workers in dominant industries like steel, automobile, aerospace, paper and rubber
manufacturing, mining, transportation, telecommunications, broadcasting, groceries, hospitality, and
construction saw their wages grow faster than inflation, established new benefits such as employer-paid
health care and pensions, and joined the middle class. At its height, the labor movement represented
close to 40% of American workers through collective bargaining.
Over time the 20th century collective bargaining model grew to include public employees and
health care workers, and even large non-union employers and non-union economic sectors set wages
and benefits in response to union standards. Unions may only have negotiated legally on behalf of 38%
of workers through collective bargaining, but they were setting standards for the nation.
Union political power gave worker organizations a seat at the table in determining election
outcomes, in influencing national economic policy and in participating in governing coalitions in state
capitals and city halls across much of the country. Not only did Democrat Franklin Roosevelt famously
say that if I were a worker in a factory, the first thing Id do is join a union, but Republican Dwight
Eisenhower also said Only a fool would try to deprive working men and working women of their right to
join the union of their choice.

What a complete contrast from the America we live in today.

Labors Dramatic Decline
Today, union membership has been declining, continuously, for the past 50 years. Union
membership in the private sector now stands at a paltry 6.7%, approximately what it was at the
beginning of the 20th Century, prior to any modern labor laws and before the birth of most of todays
largest unions. The absolute number of private sector workers in unions now stands at 7.9 million,
approximately half of what it was in the late 1970s. This is because the legal, economic, cultural, and
political world in which todays unions grew and thrived has largely disappeared. And, for a variety of
legal, cultural, and political reasons, todays unions have been unable to innovate or adapt.
The growth of Americas industrial unions was fueled in important ways by a number of factors
that are not present today. The growing industrial economy of the late 19th and early 20th century was
dominated by large, vertically integrated companies that used Fordist models of production. Workers
could often expect life-long employment in a single industry or even with a single employer, and had the
power to shut factories down to achieve bargaining goals.
Labor organizations were feisty and competitive, striking against each other as often as they
struck against employers. Disciplined Communist Party-trained organizers were dispatched as union
organizers to help build proletarian institutions to challenge capital. Mobsters seeking new profit
centers after the repeal of prohibition helped organize unions to steal from their treasuries and extort
employers. Organic worker militancy (e.g. sit-down strikes) was often carried out against the direction of
national union leaders.
But most of all, during that era, we also had laws and government policies that encouraged
collective bargaining as a way to avoid crippling strikes and stabilize industrial production during
depressions, world wars, and the cold war.
For decades now, the Wagner Act, a state-of-the-art law for the economy of 1935, has worked
against unions, and failed to protect workers in any meaningful way when they attempt to organize into
a union. There are now many more workers who have no legal right at all to form a union than there
are workers with a union. This includes everyone from low-wage supervisors at fast food chains to
registered nurses in many nursing homes to millions of workers with no fixed employment relationship
(contract, contingent, temporary, freelance, and guest workers) to public sector workers in the South
and Southwest, and farm workers in 49 states. Not to mention the workers for whom organizing is a
practical, if not legal, impossibility: those who work for small businesses and those who live in the
majority of the country where unions are no longer organizing at all, or in industries with no established
union.
In cases where workers are eligible to organize labor unions, the rules governing union elections
have been so narrowed and tilted in favor of employers that employers have strong incentives to
engage in anti-union activity. The remedies for workers who experience retaliation are so weak that
many businesses consider the fines levied by the Labor Board as punishment for illegal retaliation to be
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a basic transactional cost of doing business. With this type of legal environment, it is no surprise that the
number of Union certification elections is at an all-time low.
The laws governing strikes have also significantly impacted union power, which, in turn, has
diminished workers belief in the power of collective action. Strike activity one measure of whether
workers have faith that collective action can improve their lives is now virtually non-existent: there
were 11 large strikes in 2011, down from hundreds each year from the 1940s through the 1970s. The
recent losing strike at Caterpillar Inc. by workers represented by the International Association of
Machinists (IAM), at a company that made $4.2 billion dollar in profits last year is illustrative. Despite
massive profits, and increases in CEO pay, Caterpillar forced workers to accept major concessions.
The right wing has begun a state-by-state assault on public sector bargaining rights. In 2011, six
states repealed collective bargaining laws for public sector workers. While workers in Wisconsin, Ohio,
and Michigan may prevail over their Republican Governors and restore bargaining rights, it is unlikely
that those rights will ever be restored in Indiana, Arizona, and Tennessee. Meanwhile, the list of rightto-work states where unions are forced to provide bargaining and other services to non-members who
dont pay dues rendering them functionally bankrupt only continues to grow.
We have not been able to change the anachronistic labor laws that have hemmed in union
activism, prevented innovation and undermined workers. This is not for lack of trying. Our hopes for
labor law reform have been dashed every time in the last four decades that there has been a Democratic
president and a Democratic super-majority in Congress. Without labor law reform unions shrink,
thereby diminishing our power and making labor law reform an even more remote possibility in the
future. The failure of the Employee Free Choice Act is merely the most recent repetition of what some
have likened to labors Charlie Brown Moments with Democrats playing the role of Lucy holding the
football, offering hope for labor law reform for which they will never be able to find the class solidarity
or party discipline to deliver.
Another part of the problem is the media and culture war waged against organized labor. Our
organizers, labor leaders and union activists often think of ourselves as heirs of John L. Lewis, Walter
Reuther, Martin Luther King, Jr. and Cesar Chavez, leading workers through heroic struggles for dignity
and justice. But, to the extent that unions are even covered in the news or referenced in pop culture,
we are caricatured as weak, ineffective, selfish, self-interested, internally-focused, adversarial, antibusiness, anti-innovation, partisan, corrupt, irrelevant and obsolete. While this characterization is onesided and unfair, we should be honest enough to admit that too often, those stereotypes have a strong
basis in reality.
Most of the time unions are internally focused and do speak only to, and for, our own (ever
shrinking) membership base. It would be hard to argue with a straight face that the AFL-CIO or Change
to Win are viewed by anyone as the legitimate voice of American workers in the same way that AARP,
say, is viewed as the legitimate voice for American seniors, the NRA for gun-owners, the Chamber of
Commerce for businesses, Planned Parenthood for womens health, etc. Do fast food workers in
Phoenix or security officers in Charlotte look to Rich Trumka or Joe Hansen for direction on voting for
6

candidates, advocating on Congressional issues, making consumer purchases, or enforcing workplace

rights? Do they even know who Rich Trumka and Joe Hansen are?
Finally, we should never underestimate the political, legal, and cultural impact of the complex of
anti-union foundations, think-tanks, business associations, public relations firms, union avoidance
consultants have had on our movement. The union avoidance industry helps businesses keep unions
out of their workforce, while hundreds of right-wing publications and media outlets promote viscerally
anti-union views. Anti-union think tanks and legal foundations exist in nearly every state, and thousands
of national, state and local business associations lobby against any pro-worker legislation and policies.
Many Republican elected officials want to establish national right-to-work laws and prohibit meaningful
collective bargaining, and too many Democrats behave with complete indifference to the labor
movements survival.
The reality is that for all intents and purposes, the 20th Centurys model of American labor
relations is gone. Although individual unions in specific industries and in an ever-shrinking number of
states and cities may survive for years to come, it will generally be with shrinking memberships,
declining economic power, and on defensive bargaining and political footing.
Some of our friends on the left or the center-left, often in academia, have offered a number of
purported cures for union decline: unions should be less corrupt, more diverse, more internally
democratic, more militant or more cooperative, do more for progressive political causes or hold
Democrats more accountable or work in more bipartisan ways, involve the members more, provide
better and more responsive member services, spend more on organizing, be more industry-focused,
focus more or less on social issues, practice regional solidarity etc., etc. These are all good things, or at
least can be.
But even if unions succeed at most of these objectives (succeeding at all would be impossible
because some are contradictory), the results of their efforts would be insufficient. The most successful
union reformers still find their locals shrinking and under assault. Unions that come close to possessing
most of these saintly characteristics have found it no easier to organize new members or succeed at
other objectives, much less to do so at the astounding scale that would be required to reverse labors
decline.
The Wagner Act regime, and collective bargaining as we knew it, is dead.

Why We Cant Solve These Problems On Our Own

Certainly, one would think, Americas unions and its labor leaders must have a plan? Certainly
we must be working to develop new theories, new strategies, new forms of worker power, new tools for
lifting up the working poor, and a comprehensive, generational plan to build a new middle class for the
21st Century? Right?

Unfortunately, wrong. So far there is no plan. There seems to be no plan to make a plan. And, in
what one might at first blush consider the very definition of insanity (Einstein: Insanity is doing the
same thing and expecting a different result), unions perform essentially the same four core activities,
often in exactly the same way, as they have for the last fifty years.
Once costs such as payroll, administrative overhead, real estate and supporting staff functions
(research, communications, etc.) are allocated to the principal activities they support, the primary four
activities of American unions over the entire history of our decline -- activities upon which we spend
90% or more of our budgets -- are:
1. Representing workers through collective bargaining, contract enforcement, benefit
administration, and otherwise tending to the relationship between unions and their
members. In most local/regional union structures (where 65%-75% of the movements
resources are aligned) this set of activities often represents 70% or more of union
budgets. If a union does nothing else, it does this.
2. Electing Democrats. (Because, of course, Republicans would be worse).
3. Advocating and lobbying the government at the local, state and federal levels on behalf
of members issues and concerns, and to enact progressive economic and other policies.
4. Organizing new workers into collective bargaining units. Well, actually very few unions
do this, and fewer do it well, but for some of the largest and/or most strategically
important unions (SEIU, AFSCME, UNITE HERE, UFCW, Teamsters) organizing workers
into new bargaining units under the Wagner regime maintains a significant activity and
budget allocation.
Under the existing model, these four activities are all necessary and important. After all,
members rightfully expect their contracts to be bargained and enforced, the real-life consequences of
allowing anti-union politicians to take office are clearly very high, unions have a duty to advocate whats
best for their members and for workers in general, and at least the most strategic unions feel that its an
important part of our core mission to organize the unorganized.
The problem is that these necessary and important activities are clearly insufficient to either
rebuild the middle class or change the course of trade unionisms death-spiral. If simply doing them at
a bigger scale, or better, or more efficiently were enough, unions like SEIU would have done so.
In SEIU weve done better than most. We more than doubled our membership, from 1 million
to 2.2 million workers from 1996-2010. But only a tiny fraction of our dramatic growth was true private
sector growth through new organizing. Over 600,000 of the new members during this period of time
were organized by expanding public sector labor laws to include publicly-paid low-wage contract
workers such as home care and child care workers. Over 200,000 were not newly organized at all, but
were members of independent unions that affiliated with SEIU. We gained tens of thousands of
members when Puerto Rico, Colorado, and California passed pro-union legislation that granted
bargaining rights and improved state labor laws. Finally, there was significant bargaining unit growth,
often due to Medicaid caseloads in the home care sector.
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In SEIU, we budget close to a quarter billion dollars each year on new organizing, but in our most
wildly successful years dont come close to growing enough to offset either the growth of our industries
(so our density shrinks) or the decline of the overall collective bargaining model (so U.S. unionization
continues to shrink). No other unions have been successful at organizing at close to the same scale, and
only a handful even bother to try. And many of our own victories are politically fragile: witness the
threats to, or outright elimination of, collective bargaining rights for many public, home care, and child
care workers in the Midwest.
The insanity, organized labors primary focus on operating and expanding the 20th Century
model of collective bargaining and organizing, and our reliance on electing and lobbying Democrats
becomes easier to understand when you look at the funding, legal, political, and cultural constraints on
unions.
Essentially all of our resources, approximately twelve to fifteen billion dollars a year, come from
member dues generated by collective bargaining. Without a contract, we have no dues, and without
dues we have no survival strategy or resource base from which to operate.
Union activities are also constrained by a set of important actors that demand, expect, and
require certain types of union activity, while prohibiting other types. Union members, the first priority
of any union, rightly expect good contracts, strong contract enforcement, accountable and responsive
leadership and staff. Union officers who dont meet this core set of expectations will find themselves
voted from office, or under internal political siege, or worse, will find their unions subject to lawsuits or
decertification campaigns.
There are also significant political demands on our time, attention, talent and budgets. We
must win elections (one need only look to Wisconsin for the consequences of losing). We must defeat
anti-worker legislation. We must maintain and manage relationships with other unions. And we must
support political and community allies to support larger social justice issues, and if we want them to be
there for us in our time of need.
We are also constrained by our relationships with employers. Employers will agree to negotiate
and collaborate with us on some things, including wages, hours and working conditions. Sometimes
they will work on joint partnership efforts for benefits or productivity. But almost never on the overall
strategic direction of a company, industry or economy.
Our ability to engage in certain types of organizing or representation strategies is significantly
constrained by the agencies and courts that regulate our work. Not only does the NLRB provide little in
the way of effective enforcement for the right to organize, but federal statutes, Labor Department
regulations, and various court precedents combine to prohibit some of the most effective union tools.
Secondary strikes and boycotts, mandatory membership, aggressive corporate campaigns, job security
for workers during economic strikes, pension fund shareholder activism, and generating union revenue
outside of member dues are all either prohibited or sharply constrained. Court decisions have imposed
a duty of fair representation, turning too many unions into workplace public defenders for bad

employees, and have restricted unions ability to use dues to fund activities not directly germane to
collective bargaining.
While it is controversial to say, our internal democracy also presents constraints. Functionally, it
disincentivizes risk and innovation while rewarding replication of ineffective strategies. At the local
union level we have direct democracy by members in good standing, slate voting is common, non-union
workers have no voice, and elections are won or lost almost entirely on the strength of collective
bargaining performance, staff accountability around contract enforcement and member
communications, and the perception of union leaders as (variously) strong, charismatic, effective and
honest. Thus theres very little incentive for risk, experimentation, dramatic change, or veering from the
collective bargaining model we already operate.
For elections at the International union level, many of the same factors exist (slate voting,
members-only elections), but per capita voting dominates, meaning that giant voting blocs tend to be
held by leaders who are from large locals in union-strong industries and states where the perception of
labors decline is lowest and the illusion of continued strength highest. And on the rare moments they
are contested, elections are generally won or lost by internal political calculus about the relative
benefits to local unions of different candidates for office and by slate formation and loyalty. Again, no
incentive for risk, experimentation, dramatic change or veering from the collective bargaining model.
Finally, we dont cultivate and develop our own talent pool as a highly functioning organization
should. One tends to become a labor leader by accident, starting with experience as a rank-and-file
activist or young union staffmember, progressing through the ranks by working hard at the four
activities at hand (again: bargaining, organizing, politics, lobbying).
We expect our young staffers and new rank-and-file activists to focus only on tomorrows urgent
deadlines. They should demonstrate blind loyalty to their elders and to the unions culture and
traditions; they should show an equal amount of distrust for the boss and to any change in workplace
rules or practices. They should master the arcane arts of parliamentary procedure and collective
bargaining law. They should learn to engage in a combination of inter-union solidarity and defensive
jurisdictional battles, and they should build friendships and alliances within their local and international
unions, or their central or state labor councils.
If an activist or staff-person is principled, bright, ambitious, and if (s)he repeats these activities
every day for 15 to 20 years, it is likely that (s)he may become a labor leader at some level: a member of
a union executive board, a union officer, a senior union staff-person, or an international union or labor
federation official. Of course, no one from outside the movement, who hasnt gone through this
decades-long conditioning, need apply. This means that when our leaders are seasoned enough to take
office, they are largely incapable of thinking outside of the paradigm in which they were trained.
All of these constraints -- our revenue stream, our legal duties and rights, member
expectations, and our relationships with politicians, employers, allies, and the government, combined
with our internal democracy and our leadership development model, begin to explain labors insanity,
or, why we have continued to pursue the same activities, despite every indication that they have failed.
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Within our organizations, no matter how smart, strategic, creative, talented, unifying, ethical or
principled individual labor leaders are, as long as we are constrained by the legal, cultural, and political
systems in which we must operate, we are unlikely to succeed at the required level of transformational
activity. And, therefore, no contemplated course of action that requires union leaders to significantly
alter our behavior is likely to succeed to scale because our behavior is itself overdetermined by the
institutions and systems within which we operate.
The Death and Rebirth of a Powerful Worker Movement
In his book of case studies on how great companies stumble and ultimately fail, How the Mighty
Fall, Jim Collins traces five key stages in the progression from organizational health to organizational
death that could easily be applied to the recent history of unions:
1.
2.
3.
4.
5.

Hubris due to past success.

Undisciplined pursuit of more.
Denial of risk.
Grasping for salvation.
Resignation to irrelevance or death.

Anyone who has worked in or with unions in recent decades should see a familiar pattern of behavior in
these stages. Though Collins work focuses exclusively on publicly traded corporations, the labor
movement could easily be one of his case studies.
Today, in much of the labor movement, we are now past the point of denial of risk. At least
some of us are still grasping for salvation. The question is how, acknowledging that the constraints that
make change within the ranks of organized labor itself nearly impossible and almost certainly doom
todays legacy collective bargaining organizations to death on some timeline (faster or slower based on
geography and industry), can we learn from other organizations that have stared death in the face and
plot some strategy, not for a revival, but for the birth of a new movement for a new century?
Through the Valley of Death
There is a lot that we can learn from business innovators and entrepreneurs who have
successfully remade dying corporations. For example, in his 1996 book Only the Paranoid Survive, Intel
Co-Founder and CEO Andy Grove borrows a mathematical concept to describe the ways in which giant
shifts in the environment can challenge the future of a a company or an organization. He calls these
moments Strategic Inflection Points.
A strategic inflection point is a 10x event, development, or confluence of events and
developments over time, which result(s) in a significant change in the progress of a company, industry,
sector, economy or geopolitical situation. An inflection point can be considered a turning point after
which a dramatic change, with either positive or negative results, is expected to result. Most strategic
inflection points appear slowly, and are often not clear until events are viewed in retrospect. Denial is
often present in the early stages. Executives are often the last to know.
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There are many examples of companies that experienced and survived a strategic inflection
point. When Intel was faced with the influx of low-cost Japanese memory chips in the early 1980s, it
shifted its entire business model away from memory and into microprocessing, where it is still the world
leader. When Apple was losing tens of millions of dollars a month and had seen its market share in
personal computers drop to 6% and its stock price to $34 a share, it bet the farm on a new generation of
product development that today has made it the most valuable company on earth. When IBM lost its
leading position in personal computers it reinvented itself as a market-leading consulting firm.
Whats true about the stories of each of those companies is that when it became clear they
were experiencing a dramatic shift in their environment, they acted. Top talent and massive resources
were devoted to figuring out a future survival strategy. Old lines of business were shut down to make
room for new ones. Research and development budgets grew. Those of us who are outsiders to Apple
Inc. may never know how many failed prototypes were cast aside before the iMac, the iPod, the iPhone
and the iPad went to market, but we can appreciate that a relentless focus on the future was required
to transform these companies from fundamentally at risk of failure to once again leading their industries
or sectors. In each of these cases, notably, success came with a new product line or even in an entirely
new sector (e.g. Apple as an entertainment company, IBM as a consulting company, and Intel as a
producer of microprocessors) not a revival of an old one.
According to Grove, organizations experiencing these inflection points must focus relentlessly
on whats on the other side of the crisis. They must avoid attempting to replicate the strategies that
made them successful before the change. Companies must not hold on to old business models too long.
And they must act with significant scale: Dont, he says, act too little, too late. The key to
transformation is a wholesale reallocation of resources away from old model to whats next.
It is not clear exactly when the 20th Century American labor movement entered its strategic
inflection point. It may have been the Taft-Hartley Act, the Kohler strike, our failure to win labor law
reform under President Carter, PATCO, or NAFTA. It may also have been the confluence of these events.

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But its worth drilling down on Groves key points. Whats now required of us in labor is not a
sentimental longing for the New Deal, an attempt to turn back the clock to a different economy and a
different era, or a return to the collective bargaining model that worked well in an era of mass industrial
production, vertical corporate structures, and lifelong employment.
Rather, we need to figure out -- with much help from outside of the labor movement-- whats
on the other side of our Valley of Death, what new activities we should reallocate resources to, and
what new organizational model could work. In doing so, we need to consider perspectives other than
those of incumbent top labor leaders, challenge the inherent inertia in our organizations with fear, and
avoid the temptation of trying to go back to what worked in an earlier era when our current top leaders
were at the beginning of our careers.
In order to undertake a wholesale allocation of resources ultimately billions of dollars of
resources we first have to align our top talent and real dollars into figuring out whats next. Not, in all
likelihood, a single silver bullet, but rather a disciplined approach to research and development,
experimentation, and prototyping in search of a formula for a 21st century workers movement that can
become Labor 3.0.
I recently had an opportunity to talk with Grove and asked him to consider the path of the labor
movement in light of our decline and how we could aspire to build a new American middle class for the
21st century. Grove, one of the fathers of the late-20th century technology revolution, responded first
that he didnt consider himself arrogant enough to think (he) can solve that problem. Then he offered
two pieces of advice that are worth considering: Focus relentlessly on the outcomes you are seeking;
treat everything else as secondary, and fund the projects that everyone else wants to bury.
In terms of the relentless focus on outcomes, there are three key features that must be essential
elements of any new model of worker organization or activities designed to take the place of collective
bargaining.
1) The organization or activity must be powerful enough to transform workers lives for the
better economically.
2) The organization or activity must be scalable to millions or tens of millions of workers in
order to eventually lead to the creation of a new middle class.
3) The organization or activity must ultimately be financially self-sufficient and produce
sufficient revenue to support its own work.
Everything else old behaviors, old structures, old leaders, old laws needs to be secondary to these
three outcomes.
A few points of light?
Amidst all of the bad news for American labor, there may be some good.
Over the last several decades, there has been a marked lack of academic scholarship oriented
toward the future of worker power (rather than the past). There has been little bandwidth in our major
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unions for open inquiry and discussion about an alternative future. Unions and other progressive
investors have spent few resources for pro-worker innovations, experimentation, new social
entrepreneurships, or experimentation, and no real venture capital to fund new models to make work
pay and build independent workers organizations.
That may be starting to change. Membership, political and advocacy organizations, progressive
foundations, think tanks and academic centers at universities, and individual social entrepreneurs and
activists have begun to engage in debate, policy work, activism, and organizing that addresses the needs
of todays workers, and the imbalance of power in our society.
Here are a few examples of some of this emerging work.
Hundreds of worker centers have been founded all over the country. Worker Centers are
organizations that fight for worker justice among non-union workers, often those excluded legally or in
practice from formal labor markets and labor laws. While not yet sufficiently powerful to change
workers lives on the scale required, and not yet financially self-sufficient, (they depend almost entirely
on outside donations, largely from foundation funders), they are a promising hub of activity, and their
leaders should be engaged and challenged on the key questions of economic power, scale, and
sustainability.
Some progressive foundations are funding projects about the future of work and future forms of
worker organization. The leaders of foundations like Rockefeller, Ford, Casey, and OSI should be
engaged and challenged to imagine a much larger effort that pushes the comfort zones of traditional
philanthropy in unleashing potentially disruptive economic and political forces in the service of a rebirth
of the American middle class.
Political and advocacy organizations outside the formal labor movement have begun online
organizing about core economic issues that in years past were treated, on the progressive side of the
aisle, as the prerogative of organized labor and its closely-held alliances. Organizations like Rebuild the
Dream and Moms Rising now reach millions of Americans to engage them in online activism and
fundraising around economic issues and holding elected leaders accountable, and their leaders should
be engaged and challenged to figure out a strategy for wielding real economic power.
Think tanks and progressive centers of academic research are turning their attention to income
inequality in a serious way. From traditional left-of-center beltway think tanks like CAP and EPI, to the
Roosevelt Institute and the Century Foundation, to specific projects underway at universities like
Columbia and Georgetown, to state fiscal analysis institutes, to work being done by individual
progressive scholars and academics, there is now the beginning of a movement among academic and
think tank researchers to confront the growing income inequality and decline of the middle class.
Individual leaders, activists, and intellectuals, have begun to write, speak, advocate and organize
around this set of issues. Examples include:

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Recent popular economic books by Robert Reich, Joseph Stiglitz and Paul Krugman that offer
progressive analysis whats happened to Americas workers and middle class.
Nick Hanauers and Eric Lius efforts to refute the basis of trickle-down economics by writing and
speaking about a new middle-out economics based on growing the economy by growing the
middle class.
Peter Murrays foundation-funded effort to promote new forms of scalable functional
organizing that take the best lessons from unions, AARP, Planned Parenthood, etc. and apply
them to new organizations on essentially a venture capital model.
Andy Sterns ongoing leadership in convening business leaders, academics, investors, and union
leaders to find joint business/labor high road strategies and experiment with new financing
sources for pro-worker advocacy.
And there are a number of other interesting organizational efforts:

The B-Corp movement to redefine business success as including community and social
benefits to workers, consumers, and the environment, not just shareholder value.
Renewed efforts by New Yorks Working Families Party to expand nationally and create
independent political accountability around worker issues.
Initiatives by the Emerald Cities Collaborative to unite labor and environmental interests to
create high-wage green jobs.
The American Values Project, a Democracy Alliance-based efforts to frame a populist,
progressive, and majoritarian narrative to counter the Fox News/U.S. Chamber/Heritage
Foundation economic frames that dominated U.S. political discourse over the last 40 years.

Within SEIU itself, a number of new initiatives and experiments under development hold some
promise, including efforts to organize low-wage fast food and retail workers in New York and Chicago,
and the Fair Economy campaigns to change the media and political environment around jobs, work and
inequality in 16 cities around the country.
And of course the Occupy Movement of 2011 gave a name and a voice to the 99%, and
confronted the corrupt nepotism between Wall Street, banks, corporations and U.S. policymakers.
Unfortunately, it lacked discipline, a rational internal decision-making structure or hierarchy, or real
policy goals, and suffered from adolescent obsessions with camping in parks and hating police. But it
also, for perhaps the first time since the 1960s put the issue of income inequality front and center in the
mainstream media and offered a compelling narrative about how a handful of individual, corporate and
political bad guys broke the economy for the rest of us.
None of this is to say that there are any actual answers yet. Not all of these organizations or
activities are necessarily strategic, well-financed, or even well-run. A meager handful of start-up
projects, research projects, and public initiatives are clearly insufficient to overcome the dominance of
corporate power and a 40-year right-wing political narrative about work and workers. None of these
efforts can yet answer our three key questions about a) economic power to change workers lives b)
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scalability and c) sustainability. But we should be encouraged by their emergence, and even more so
that they are emerging somewhat organically.
Learning the Right Lessons from Our History
Todays legacy unions have an important role to play, perhaps the most important role to play,
in determining whether a new, 21st-century model of worker power will develop. To do that, we will
need to find the right ideas and then fund the right ideas. We can learn from the experiences of
business innovators, or we can look to our own history. But the key is to learn the right lessons from our
history.
The American labor movement has experienced this type of crisis before. In the 1930s United
Mine Workers union president John L. Lewis and the heads of some other major craft unions realized
that their own unions would not survive if the vast majority of unskilled workers in basic industry
remained non-union. The UMW in particular had already experienced decline as a result of
mechanization of mining and would decline further as demand for coal dropped. Lewis understood that
the future of the labor movement lay not with his comparatively small, regional, and craft-based union
(all male and almost entirely white), but with massive industrial organizing among workers (including
the unskilled, and including blacks and women) who had previously been ignored by most unions.
The UMW then invested millions of dollars of its resources (big money at the time) to create and
fund a new organizing vehicle for industrial workers, the CIO, to launch brand new unions (such as the
United Steelworkers) and provide resources to some existing start-up unions (such as the UAW). Both
the resources and the top talent of the UMW migrated to the CIO and to the new unions it was creating.
The results of those efforts speak for themselves: the rapid expansion of the labor movement,
the development of the political instruments that sustained the New Deal, the creation of a middle
class, and the onset of a 40-year period of the most broadly shared prosperity in our nations history.
Lewis and his union brothers found the right idea (in their case industrial unionism), then they
funded the right idea. He was the early labor movements equivalent of Andy Grove at Intel, Louis
Gerstner at IBM, or Steve Jobs at Apple: he recognized the strategic inflection point facing craft unions
at the onset of the Great Depression and made a wholesale transfer of resources away from the old
model to the new.
Now its our turn.
Our John L. Lewis Moment: We Have to Find and Fund the Right Idea(s)
Unions committed to a rebirth of worker power and the American Dream should join with other
strategic partners to create two, new, independent, institutions: One for research and development and
another for funding new and innovative strategies to create a powerful, sustainable, and scalable model
for worker organizing. The first institution should be a new Center for the Future of Workers (real name
to be determined, but for now lets call it the Center), a non-profit strategic research center with a
specific mission to find the right idea(s) for replacing the legacy union movement with new form(s) of
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worker organization. The second institution should be a platform for funding new forms of worker
organization, worker power and worker advocacy (the Fund).
These two institutions should work together to identify, test, fund and scale projects and ideas,
organizing models, and activities that meet our three key outcomes of being: (1) powerful enough to
change workers lives economically; (2) scalable to touch millions or tens of millions of workers; and (3)
financially self-sustaining.
The Center for the Future of Workers
The Center would bring together scholars, analysts, practitioners, organizers, civic leaders,
lawyers and journalists to create serious research, intellectual, policy, and public advocacy platforms for
exploring the future of work, worker organization, worker power and worker advocacy. It would hold
conferences and symposia, publish papers, conduct issue briefings for organizational and political
leaders, attempt to influence mainstream journalism, and measure the actual results of experiments
and start-up ventures as they emerge. It would partner with other think tanks, advocacy organizations,
progressive publications, and academic centers. The Center would, in essence, lead the ideas
revolution that necessarily precedes any actual revolution.
Its areas of inquiry should include:

The evolution of work and the 21st century workforce.

The review of existing research and scholarship around potential future forms of worker
power/organization/ advocacy and the identification of gaps to be filled in with new original
research (which could in turn be done in-house or through partnerships).
The intersection of technology with worker advocacy.
Comparative labor law and policy analysis with global competitor nations.
Possible strategies for business-labor-government alignment to create high-wage jobs and
broadly shared prosperity (B-corps, worker ownership, capital strategies, etc).
Development and evaluation of policy and legal proposals to create new forms of worker
organization, power and advocacy.
Incubation of new ideas for organizational ventures.
Convening the nations leading progressive thinkers, academics, and public intellectuals for
collaboration around new forms of worker power, organization, and advocacy.

For administrative and synergistic purposes, the Center could easily be housed within an existing
non-profit partner organization, so long as it remained independent for the purposes of governance and
direction, or it could stand alone. It could be started with a relatively modest budget (well under
$5M/year).
By Housing the Center outside of any union or federation of unions, it would begin with a set of
advantages not available to a research or policy platform housed inside a labor organization:

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It would be viewed as an independent, non-partisan, intellectually serious endeavor by key

target audiences (journalists, academics, policymakers).
It could bring together collaborators from various sectors that might be unlikely to view the
institutional labor movement as a promising partner.
It could raise foundation dollars and dollars from progressive individual donors by virtue of
501(c)(3) tax status.
It could aggregate resources from a number of unions and other partner organizations.
It would be insulated from internal political winds, budget pressures, or higher-priority
legacy activities within any one union partner.
It wouldnt be vertically controlled by any one union partner, thereby insulating funderunions (and other funders) from any political or legal risk associated with its activities or
with the projects and ideas it promotes.
It could be viewed as an honest third-party evaluator of new proposals, ventures, and
models, both those being developed inside of unions and outside.

The Nurse Log Fund

If it is successful, the Center will be the place where we find the right idea(s). Then, like John L.
Lewis and the UMW, well have to fund the right ideas.
In fact, we really wont know whether any ideas are right until theyve been funded, prototyped,
started-up and evaluated. Lots of promising ideas wont succeed. Lots of ideas will prove in practice to
fail a key test: theyll be insufficiently powerful to improve workers lives economically, insufficiently
scalable, or insufficiently sustainable. We simply wont know what works until we try.
Today, new ideas are too often starved as unions continue to allocate resources to our legacy
activities, and because we still havent seen a new model that works. In turn, social entrepreneurs
seeking to change workers lives allocate upwards of 70% of their time and energy into raising
comparatively small sums of money from foundations, rather than on executing their mission. Still
other potential ideas remain unimagined or untested at all because smart, progressive, talented people
who share the labor movements values and care about workers choose to spend their careers not on
worker advocacy, but on some other activity where they can see a clearer path to a successful outcome.
Thats why we need a platform for funding new forms of worker organizations, worker power
and worker advocacy. Whether its an existing idea currently starved for resources or a new idea either
generated by the Center or developed independently by social entrepreneurs, it will be virtually
guaranteed to fail without sufficient start-up funds, sufficient guidance by people with experience
leading successful start-up ventures, and sufficient loving criticism and feedback.
Legacy unions have the resources, and some remnants of power, to become a kind of nurse log
to new forms of worker organization, power, and advocacy. In the study of forest ecology, nurse log
is the term given to a fallen tree that, while it decays, provides nourishment and protection to seedlings

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that in turn grow from its fallen trunk. Thats exactly what todays unions need to do for the seedlings of
the next labor movement: use our decaying resources and power to nourish and protect them.
So lets create a Nurse Log Fund (like the Center, real name to be determined, but for now lets
call it the Fund). The Fund would operate in the world of worker organization, power and advocacy
much like a private equity fund, venture capital firm, or angel investor does in the world of business: to
provide sufficient working capital to target organizations to nurture growth, expansion, new product
development or new leadership.
The Fund would target its investments in start-up or ongoing innovators that meet a specific set
of criteria. It would be led by a management team with expertise in building strong, scalable, selfsufficient organizations, drawn not just from the ranks of successful labor organizers and leaders but
also from talented leaders from business, non-profits, and government who share our values. This talent
would be lent to new or emerging organizations in which it invests. It would make large-scale multi-year
investments in new or emerging worker organizations (or other new models for power and advocacy),
with the expectation that after an initial 3-5 year investment, the organization must be able to show
real results and measurable progress toward economic power, scalability, self-sufficiency to justify any
future investment. It would be focused on quantifiably demonstrable outcomes and unsentimental
about divesting from efforts that fail.
But it would also expect and encourage risk and experimentation, and understand that failure
will result more often than success. After all, it only took 150 years and dozens of failed theories for the
American labor movement to achieve success in the 1930s; its reasonable to assume that if we allocate
to the Fund much of the legacy union movements discretionary resources (i.e. those not related to
maintaining bargaining-related revenue or political survival until a new model succeeds), it will take
more than a few years until we can finance sufficient experimentation and innovation to find the next
powerful, scalable, self-sufficient model. Well probably need to fund a lot of failure, and learn from it,
to find a successful model.
To succeed, the Fund will need to be capitalized at a level that far exceeds the relatively minimal
resources currently available from foundations and individual donors to start-up experiments in worker
organization, power and advocacy. This will ultimately require hundreds of millions of dollars per year
raised primarily from legacy unions.
Like the Center, the Fund should be organizationally distinct from any one union, for many of
the same reasons: insulating its resources from internal union political demands, allowing for
fundraising scale across unions (and potentially other partners), etc. But especially in the case of the
Fund, it is likely that funding will flow from it to new forms of organizations and experiments that could
easily incur the ire of wealthy and powerful companies (such as organizations engaging in corporate
campaigns) or in organizations with revenue models or other organizing strategies which would be
legally suspect if a union itself were pursuing them. This makes it necessary to have more than an armslength relationship between union funders, the Fund, and the new organizations it funds.

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Toward Labor 3.0

The Center and the Fund will be partner organizations. The Center should provide the forum for
intellectual exploration, strategic research, opinion formation, policy development, collaboration,
publication, and evaluation of proposals and experiments. The Fund would fund the actual experiments,
including those proposed by the Center, and could match social entrepreneurs and practitioners with
proposals for new enterprises developed by the Center. But since the Fund would be funding projects in
uncharted organizational waters, including some that would, no doubt, engage in issue advocacy,
political organizing, or even profit-making (e.g. worker co-ops, ESOPs), it should be incorporated
separately as a LLC or other type of organizational structure, not a 501(c)(3).
Together, the Center and the Fund will provide the infrastructure for finding the right ideas and
funding the right ideas that are far less likely to emerge from legacy unions performing legacy activities
under a legacy system. If these new structures succeed, well then have one or more new models of
economically powerful, scalable, and self-sustaining worker organizations.
Time is of the essence here. With each year, we grow smaller and weaker. There is no
guarantee that even starting now and even at a large scale, we will succeed in finding a path toward
Labor 3.0 for the 21st century. But the converse is guaranteed: if we dont immediately begin
experimenting with new models to scale, while we still have resources and talent to do so, the future is
100% predictable and 100% bleak.
Todays unions and labor leaders will be remembered not for the strikes we led, our organizing
wins, the contracts we bargained, or the politicians we helped elect, but rather for whether, and how,
we respond to our own John L. Lewis moment.
#

David Rolf, one of the architects of SEIUs successful home care organizing model, is President of SEIU
Healthcare 775NW and International Vice President of SEIU. The views, opinions, and proposals in this
article are exclusively his own.

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