Subcontracting: Innovative Labor Strategies

[Excerpt] Over the past 15 years, U.S. corporations have searched desperately for ways to turn back stiff foreign competition. One of their strategies has been subcontracting—letting work out to outside firms, so as to gain access to both better production techniques and cheaper, more docile labor. Responding to subcontracting will be one of the principal challenges facing labor in the 1990s. The impact of subcontracting has already been quite severe, particularly for unionized workers. Tens of thousands of workers have lost their jobs, and others have taken pay cuts. Unions are responding to this challenge by using both collective bargaining and public policy mechanisms. This article will focus on innovative efforts by two unions: the Steelworkers (USWA) and the Auto Workers (UAW). It is not surprising that both these examples come from heavy manufacturing, since this was the unionized sector first hit by foreign competition; other sectors have not been faced with the problem as severely until recently. Even though the circumstances may differ, workers in sectors as diverse as hospitals, telecommunications and airlines can learn from the auto and steel industry experience because in these industries, deregulation has intensified competition in much the same way that the rise of foreign competition has affected manufacturing