Such stable relationships depended on a stable economy -- one where skills and products changed little, or at least changed slowly enough that employers and employees could adapt relatively easily. But relations between unions and their employees grew testy during the 1960s and 1970s. American dominance of the world's industrial economy began to diminish. When cheaper -- and sometimes better -- imports began to flood into the United States, American companies had trouble responding quickly to improve their own products. Their top-down managerial structures did not reward innovation, and they sometimes were stymied when they tried to reduce labor costs by increasing efficiency or reducing wages to match what laborers were being paid in some foreign countries.
In a few cases, American companies reacted by simply shutting down and moving their factories elsewhere -- an option that became increasingly easy as trade and tax laws changed in the 1980s and 1990s. Many others continued to operate, but the paternalistic system began to fray. Employers felt they could no longer make lifetime commitments to their workers. To boost flexibility and reduce costs, they made greater use of temporary and part-time workers. Temporary-help firms supplied 417,000 employees, or 0.5 percent of non-farm payroll employment, in 1982; by 1998, they provided 2.8 million workers, or 2.1 percent of the non-farm work force. Changes came in hours worked, too. Workers sometimes sought shorter work weeks, but often companies set out to reduce hours worked in order to cut both payroll and benefits costs. In 1968, 14 percent of employees worked less than 35 hours a week; in 1994, that figure was 18.9 percent.
As noted, many employers shifted to pension arrangements that placed more responsibility in the hands of employees. Some workers welcomed these changes and the increased flexibility they allowed. Still, for many other workers, the changes brought only insecurity about their long-term future. Labor unions could do little to restore the former paternalistic relationship between employer and employee. They were left to helping members try to adapt to them.
Union membership generally declined through the 1980s and 1990s, with unions achieving only modest success in organizing new workplaces. Organizers complained that labor laws were stacked against them, giving employers too much leeway to stall or fight off union elections. With union membership and political power declining, dissident leader John Sweeney, president of the Service Employees International Union, challenged incumbent Lane Kirkland for the AFL-CIO presidency in 1995 and won. Kirkland was widely criticized within the labor movement as being too engrossed in union activities abroad and too passive about challenges facing unions at home. Sweeney, the federation's third president in its 40-plus years, sought to revive the lagging movement by beefing up organizing and getting local unions to help each other's organizing drives. The task proved difficult, however.
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This article is adapted from the book "Outline of the U.S. Economy" by Conte and Carr and has been adapted with permission from the U.S. Department of State.