Book reviews, Monthly Labor Review Online, Mar. 1998

February 1998, Vol. 121, No. 2

Book reviews

Unionism in the 90s
A new adventure
Business of baseball

Unions in a Changing World. By Shauna L. Olney. Washington, International Labor Office, 1996, 99 pp. The New Unionism. By Charles C. Heckscher. Ithaca, NY, ILR Press, 1996, 302 pp. $16.95.

For all the heated debate that the word "union" can invoke, one fact remains above dispute—union affiliation in the 1990s has been on the decline. The Bureau of Labor Statistics data indicate that union membership in the United States has dropped from 16.1 percent of employed workers in 1990 to 14.5 percent in 1996; and this decrease is just part of a long-term trend since the heyday of unions in the 1950s. Unions in a Changing World and The New Unionism are both searches for solutions to this situation from different perspectives.

Unions in a Changing World makes a comparative analysis of the challenges faced by trade unions in eight industrialized countries. The International Labour Office solicited information from selected unions on organizing workers in their countries. As expected, the focus of these unions is survival and growth in the current economic climate. Implicit in their responses is the belief that trade unions still have a vital role to play. The legal constraints on unions is the other universal message in the book. From the perspective of the unions, laws and political realities frustrate organizing efforts within each country, and international agreements such as NAFTA pose additional barriers to unionization. The final section of the book is devoted to identifying needed changes in unions’ internal structures, as well as developing cooperation with other trade unions and increasing their influence beyond traditional labor-management issues.

Although some unions, such as the Service Employees International Union, have worked to modernize their approach, labor unions remain strongest in their traditional industries, many of which are in declining segments of the economy. They are still working to overcome inter-union rivalries. The recent United Parcel Service strike is the first modern development of a compelling message that unions may carry to growing parts of the economy.

In contrast, The New Unionism takes a different approach to declining union membership in the United States. While Charles Heckscher is no less sympathetic to workers having a collective voice in the workplace, he is less optimistic that current labor unions can adequately meet that goal. Although he recognizes many of the same challenges as the traditional labor unions, he doubts their ability to adapt to changes in the work force. Arguing that traditional labor unions were products of their 19th century environment, with its emphasis on manufacturing and production lines, he sees their influence eroding as white-collar and service sector jobs predominate in the growing segments of the economy. At the same time, he doubts that workers without a collective voice can be treated satisfactorily in organizations focused on increasing shareholder value and short-term results. Recognizing that at least some companies have adopted "worker-friendly" environments, Heckscher still feels that the current style of management that he terms "managerialism" is insufficient to protect workers’ rights. Even progressive programs, such as Quality of Work Life (QWL), fall short of enriching the workers, for as these programs expand they collide with management and union rights, and so have a history of ultimate failure.

Instead, he envisions professional associations taking on a role similar to medieval craft guilds. He sees what he calls "associational unionism" as being the only means by which members can collectively articulate concerns, define company standards, coordinate groups of workers within the workplace, and develop career ladders outside the company. These associations would represent cross-sections of workers within establishments and encourage extensive participation in workplace issues beyond the range of normal union-management agreements. In Heckscher’s opinion, creating this new dynamic requires both changes in labor law and in relationships between management and workers. Current labor negotiations are based on two-party agreements, whereas the new approach strives to develop consensus among many formal and informal groups, each of which have a stake in the outcome of the negotiations.

Still, professional associations have not shown an interest in becoming more militant. White-collar workers join these groups to exchange information and as a source of job information, but members do not expect these associations to represent them to their employers. This matches the expectations of employers. While some large employers pick up the professional association dues for their workers and give them worktime to participate in association functions, it is doubtful many employers would take such a generous approach if the associations began to seriously intrude in the employer-employee relationship.

Beyond looking at collective bargaining as a desirable end, the two books share a sad reminder of the current state of organized labor. The ILO study on which their book is based was completed almost 7 years ago. The New Unionism was originally published in the late 1980s and has been updated in this edition. While each author argues that the strength of their work lies in its relevance to the present situation, those statements say as much about the state of labor as they do about the authors’ work. That so little has changed in the study of organized labor over the past 8 years says a lot more about the labor movement than do the works themselves.

—Michael Wald
Bureau of Labor Statistics
Atlanta region

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A new adventure

Bold New World: The Essential Road Map to the Twenty-First Century. By William Knoke. New York, NY, Kodansha America, Inc., 1996. 354 pp. Index.

We need a new phrase—I propose "apocalyptic optimist"— to describe William Knoke. He truly believes that the technical miracles promised in the high-technology brochures and web-zines will come true. But at the same time, he sees that implies a painful reappraisal of the way we think about place, time, space, organizations, relationships, government, religion, war, and, of most interest here, work.

In Knoke’s twenty-first century, the technical problems of production and distribution of goods are annihilated. The acceleration of technology leads to a Placeless Society in which "distance ceases to exist" and ushers in an Age of Everything-Everywhere during which "all the cards of power and wealth, of family and self, are being reshuffled and dealt anew." The brief futuristic vignettes that lead off each chapter often read like the series of advertisements for a major groupware vendor in which substantial competitive problems are solved and commercial catastrophes averted at the click of a few mice. I must admit these technologically optimistic assumptions are at least plausible. I do, however, suspect that Knoke overestimates the current use of these tools in the world beyond his own high-end, high-tech segment—the jacket notes describe him as founder of an investment banking firm specializing in mergers and acquisitions in the field of cutting-edge technologies.

Once Knoke sets his optimistic stage in terms of technological environment, he takes one of the most thoughtful looks I have read at what impact that environment will have. The impacts of a placeless society on labor are especially profound. In such a technologically driven society, not even the renowned information worker will be safe. Computers, automation, and intelligent systems, according to Knoke, are advancing so quickly that even in the professions and management, general practitioners and mid-level functionaries will join blue-collar workers and clerks among the displaced in increasing numbers. And, indeed, the 1995 BLS displaced worker survey found that such white-collar workers made up a larger than usual share of the displaced.

What, then, are the occupations that will do better? First, those who use and develop technology—from software developers to industrial designers to operations researchers. Second, occupations that respond to fundamental demographic shifts—cooks for the two-worker family, fertility doctors for the growing number of late-marriage household formations, and health care therapists for an aging population of weekend athletes. And third, those who help organizations adapt to the new rules—management consultants, environmental engineers, investment bankers, and bankruptcy lawyers.
Bold New World encompasses far more than jobs and careers. Readers may find his discussions of social, political, and technological trends to be useful and interesting supplements to his insights for the future of economics and labor relations.


—Richard M. Devens, Jr.
Office of Publications
Bureau of Labor Statistics
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Business of baseball

Baseball Economics: Current Research. Edited by John Fizel, Elizabeth Gustafson, and Lawrence Hadley. Westport, CT, Praeger Publishers, 1996, 228 pp. $55.

The National pastime has undergone some significant turbulence over the past several years, spurned by the tumultuous strike during the 1994 season that resulted in the first ever cancellation of the World Series. That work stoppage failed to produce an agreement between players and owners to address spiraling players’ salaries, and caused a significant attendance drop the following season. To rekindle fan interest in the game, owners subsequently adopted several measures that altered the structure of baseball, notably the beginning of interleague play during the 1997 season. Smaller market team owners in Baltimore, Cleveland, and Arlington (TX) followed another successful strategy to increase attendance—constructing new stadiums; other owners in Milwaukee, Montreal, and Pittsburgh hope to follow suit. Without a salary cap, luxury tax, or change in team revenue sharing, players’ salaries have been skyrocketing, currently topped by a $12 million a year contract extension given to Atlanta Braves’ pitcher Greg Maddux. Scheduled to begin play in 1998, new expansion teams in Arizona and Tampa are prepared to aggressively spend in the free agent market during the upcoming offseason.

Every casual, arm-chair fan has opinions on these topics. But Baseball Economics attempts to present conclusions drawn when skilled economists use empirical evidence to examine the most significant problems facing the game today. The result is a book that has a very specific, possibly small target audience: baseball fans with extensive statistical training (that is, beyond the skill required to tabulate fantasy baseball statistics). Thus, academics are the primary audience sought; hot dog eating, beer drinking fans can stick to the sports page. The book contains many tables that provide the empirical basis for the conclusions reached. Furthermore, the authors devote a significant portion of each article to describing the statistical analysis conducted and defending the processes used.

As the book points out, the distinct advantage of applying economic analysis to baseball is that the industry has a wealth of easily obtainable data available for such examination. Moreover, the ever-increasing dominance of baseball’s business side permits analogies to be made from baseball to other businesses that operate in a similar manner. The disadvantage, at least from the standpoint of reading the book, is that many of the conclusions drawn as a result of the detailed economic analysis of baseball data seem less than revolutionary. The rightful focus of each article is on the statistical methods employed and data used to derive the conclusions, but the findings typically do little more than confirm what casual fans already assumed.
Baseball Economics is divided into five sections each with multiple articles on relevant topics in baseball today. The "Product Market" focuses on methods of increasing attendance; the "Labor Market" deals with the effects of free agency, salary arbitration, and other structural changes in baseball on players’ salaries; "Salary Arbitration" addresses the ability to predict arbitration outcomes based on a number of different factors; "Luxury Taxes and Revenue Sharing" analyzes the potential impact of the implementation of such in baseball and other sports leagues; and "Special Topics" covers subjects from segregation and technical efficiency in major league baseball to labor relations in Japanese baseball.

The "Product Market" section focuses on identifying methods for increasing attendance at major league ballparks, in light of the attendance decline that occurred following the 1994 strike. The section begins with an article on "Rebuilding Attendance Following a Strike," which provides the unenlightening conclusion that higher attendance is associated with larger metropolitan areas, newer stadiums, ballpark promotions, and weekend games. A subsequent article analyzes the effect of new stadium construction on attendance, revealing that, despite the expected increase in attendance, new stadiums are unlikely to be profitable. Irrespective of whether the new stadium is privately or publicly financed, empirical evidence does not suggest the stadiums provide an adequate economic return to the areas they are built in. The section concludes with an article concerning customer discrimination in baseball.

The "Labor Market" section compares salaries obtained from free agency versus salary arbitration; the salary impact of structural changes in baseball; and whether baseball players are exploited through baseball training. Baseball data on free agency and arbitration reveal that both systems of salary determination are similarly structured, meaning that players can use either one of the methods and obtain similar gains in salaries. The higher salaries on average for free agents reflect their years of experience, rather than a better process of salary determination. The only unexpected conclusion in this section is that, on average, players are paid less than their estimated market value despite the significant salary gains created by free agency and arbitration.

The "Salary Arbitration" section first attacks the premise that baseball arbitrators flip a coin when choosing an owner’s or player’s salary bid, instead making the case that arbitrators have a racial bias against black and Latin American players when deciding cases. The final article demonstrates that the spread between a team’s salary offer versus the player’s desired salary in arbitration is smaller for nonwhite players, injury-prone players, and players repeating arbitration. The smaller spread suggests that these types of players may be undervaluing their baseball performance.

The "Luxury Taxes and Revenue Sharing" section presents an analysis of the luxury tax proposal that owners made during the 1994 strike, concluding that the implementation of the system suggested by the owners would have reduced the salaries of star players, effectively redistributed revenue to teams that did not have large payrolls, and increased competition among all teams. Although these conclusions are not revolutionary, this article was one of the most interesting given the contentiousness nature of debate on this issue. Knowing the potential effects of the luxury tax system does not help identify how to get the players’ union to accept such a system, as its implementation appears to favor the goals of owners.A second article in the section examines revenue sharing and its effect in determining players’ salaries on the open market.

The final "Special Topics" section contains mildly interesting pieces on positional segregation and technical efficiency in major league baseball. The standout article deals with labor-management relations in Japanese baseball, well explored by the author. Readers should find interesting the contrast between American and Japanese approaches. This contrast provides an interesting analogy to differences between other American and Japanese businesses.

One controversial issue (at least for this arm-chair fan) not addressed in Baseball Economics is the lack of a baseball franchise in Washington, DC, one of the largest metropolitan areas in America without a baseball team. Perhaps a later edition of this book could present conclusions drawn from empirical evidence on the ability of the Washington-Baltimore market to support two baseball teams, possibly including a National League expansion team playing in a newly constructed stadium along the Potomac River.


—Charles Muhl
Office of Publications
Bureau of Labor Statistics

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