Nobody epitomizes organized labor like the American Federation of Labor and Congress of Industrial Organizations. When people think of broad-shouldered men with calloused hands and smelly cigars meeting in backrooms to hash out labor contracts, they think of the AFL-CIO.


Since becoming president of the group – an umbrella organization for 64 unions representing 13 million workers – in 1995, John Sweeney has worked to change that perception. He has stressed organizing new workers by reaching beyond labor’s traditional stronghold in old-line industries such as steel and autos. He has emphasized recruiting women, minorities and service-industry workers. And he has redoubled the organization’s focus on politicking, encouraging union members to lobby public officials and participate in electoral politics.


Sweeney brought his campaign to Wharton earlier this winter, giving a talk that was equal parts evangelism and education. His message: Don’t be fooled by recent good economic news. American workers are struggling more than ever, he said, often being squeezed by employers for wage and benefit concessions.


The solution? You guessed it. Unions. “America is headed down a low road economically, and if we don’t get back on the high road, all of us will feel the eventual pain,” he said. “Our nation’s middle class is rapidly disappearing.


“We have all heard the recent good economic news. The trouble is, if you make less than $75,000 a year, you’re working so hard just to keep up that there’s no time to stop and smell the roses. Since President Bush took office, nearly three million jobs have been lost. For many high-school graduates, the available job prospects are four: the Army, the Navy, the Air Force and the Marines.”


Sweeney blamed the weak employment numbers on something that isn’t likely to change with a growing economy – globalization. Sure, he said, globalization is here to stay, and trade brings perks as well as problems. But lately the troubles have overshadowed the benefits. Take the trend to move tasks such as software development and X-ray reading to English-speaking developing countries like India and China . Suddenly, white-collar workers, even physicians, are sharing the anxieties of their blue-collar counterparts. A study conducted at the University of California at Berkeley found that as many as 14 million American jobs are vulnerable to outsourcing abroad, Sweeney pointed out. 


As an antidote to this trend, policymakers should consider the needs of workers, blue- and white-collar, when they negotiate trade agreements, he said. “The World Trade Organization, the International Monetary Fund and the World Bank, none of them want to link worker standards and trade agreements. When the IMF imposes conditions on countries in economic crisis, it should not be imposing hardships on workers. Worker standards should be part of the WTO. Child labor needs to be an issue, too.”


According to Sweeney, American employers are evading regulations, whether for workplace safety or environmental protection, by shipping jobs abroad. And unless these issues become part of trade negotiations, they will continue to do so.


Sweeney’s defense of unions comes at a time when U.S. workers are feeling especially squeezed by what many observers have labeled a “jobless recovery” –  one which bodes well for investors and some industry sectors, but offers little in the way of jobs for those recently laid off or just entering the job market.


In addition, the past week saw the release of U.S. Department of Labor figures showing that the wage gap between America ’s lowest paid and highest paid workers is growing. According to an article in the Wall Street Journal, this income inequality is blamed by some on a “federal minimum wage that hasn’t risen since 1997, and the declining power of unions, which traditionally bargained to raise the wages of all workers, regardless of their skill or experience.”


The Journal also points out that the share of U.S. workers who are union members “continued its long-term decline, falling to 12.9% from 13.3% in 2002. A related trend has been manufacturing’s declining share of employment; factories traditionally were a source of well-paying, less-skilled, often unionized jobs.”  


Health Care for 10,000 Children

In his remarks, Sweeney didn’t shy away from a topic that has been largely banished from academic discussions of trade – protectionism. He argued that industries such as steel – essential to a robust American economy and national defense – should be shielded, to some extent, from foreign competition.


That puts him at odds with the Bush Administration, which recently lifted tariffs on foreign steel. “By bowing to pressure from the WTO, the European Union and Japan , the president sent a disturbing signal that the United States is unwilling to defend its workers and industries from unfair competition,” Sweeney said.


He also disagrees with Bush on the President’s advocacy of a Central America Free Trade Agreement. Sweeney claimed the agreement would lead to job losses here and would hurt Central American workers by failing to force employers in those countries to adhere to adequate worker-protection laws.


Another challenge for workers that’s not likely to disappear as the economy improves is the erosion of employee benefits, especially healthcare, Sweeney noted. Medical costs continue to spiral upward, and employers keep trying to cut costs by asking employees to pay more for insurance and by downgrading coverage.


That’s the main point of dispute between 70,000 striking grocery workers in California and their employers, he said. At least one of the employers involved – Pleasanton, Calif.-based Safeway Inc. – is “a profitable industry leader where workers in the past have made significant concessions to accommodate the employer’s needs.” Tactics adopted by Safeway and the other California grocers merely shift their problems to taxpayers, who end up covering employees via public programs, he argued.


Consider what has happened with Wal-Mart Stores in Georgia , Sweeney said, quoting a 2002 study that found that the state’s public insurance program covered more than 10,000 children of workers at the Bentonville, Ark.-based retailer. “It’s not fair for good employers to be providing Cadillac coverage, and the Wal-Marts of the world to be providing no coverage.”


Wal-Mart is a company that organized labor loves to hate. It is staunchly anti-union and has held off attempts by the United Food and Commercial Workers to organize its workers. BusinessWeek has described its grocery supercenters as “a nonunion dagger aimed at the heart of the traditional American supermarket.” But the problem of workers losing health coverage is bigger than even hefty Wal-Mart, the country’s largest retailer, Sweeney conceded, noting that government intervention may eventually be required in the form of a single public health plan.


In the meantime, elected officials should consider requiring employers to provide at least basic health coverage. “I know there are concerns about the impact on small business,” Sweeney acknowledged, but “there could be some kind of a pool where they would share their risk with a larger group of workers than just their own.” Politicians may have to do something soon because the problem is worsening. Today, 43 million Americans – nearly one in every five people – lack health insurance, and the number is slated to keep rising.


Wanted: a “Working People’s” President

If the AFL-CIO had its way, one politician who won’t be working on the problem is President Bush. Calling Bush’s policies disastrous, Sweeney said, “union members are ready to take on the challenge of electing a working people’s president.” Since Bush is running unopposed for the GOP nomination, that means a Democrat. So far, the AFL-CIO hasn’t endorsed one. But Sweeney said all the Democratic candidates had labor-friendly records and all of them have been willing to listen to unions’ concerns.


Unlike many union leaders of past eras, Sweeney himself didn’t begin his career in a dirty-fingernails job. Rather, he grew up in a union family in the Bronx in New York City . His father was a city bus driver; his mother, a maid for rich families on the Upper East Side of Manhattan. Both parents came from Ireland just in time for the Great Depression. “In [our] home, there were three things we valued most – our family, our church and my father’s union. We knew that without my father’s union there would be no bread on the table.”


The financial security that his father’s union job provided allowed Sweeney to attend Iona College , where he majored in economics. Upon graduation, he tried to get a job with a union but failed. He settled for IBM. A year later, he made the switch, becoming a research assistant for the Ladies Garment Workers in New York . Three years after that, he joined a New York City chapter of the Service Employees International Union, which represented building-maintenance workers. There, he led two citywide strikes.


In 1980, he became the SEIU’s national president. By 1995, the year Sweeney was elected head of the AFL-CIO, the SEIU had nearly doubled in size, from 625,000 to 1.1 million members. That growth happened as union membership nationwide was slipping. Sweeney achieved these gains with the same focus on recruiting and political activity that he has brought to the AFL-CIO.


After summarizing his career, Sweeney made an unlikely recruiting pitch. He encouraged Wharton students to consider joining the labor movement rather than the investment banks and consulting firms that are often the destination of newly minted MBAs. “Unions can do for you what they’ve done for me,” he said. “And that is to provide a rewarding life and career and the satisfaction of helping workers and their families.”