oversight

Trends in the Number of Strikes and Use of Permanent Strike Replacements in the 1980s

Published by the Government Accountability Office on 1990-06-06.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                  United States General Accounting OfPIce /L/   f q 77
                  Testimony


                                                          HI
                                                          111111
                                                             II 141499

For Release        Trends in the Number of
on Delivery        Strikes and Use of Permanent
Expected at
9:30 a.m.   EST    Strike Replacements in the 1980s
Wednesday
June 6, 1990




                   Statement  of
                   Franklin  Frazier, Director  of
                   Education  and Employment Issues
                   Human Resources Division
                   Before the
                   Subcommittee  on Labor,
                   Senate Committee on Labor       and
                   Human Resources




GAO/T-HRD-90-34                                                  GAO Form 160 (12/87)
                 SLJUHABYOF TESTIlYOUY EY FRANKLIN FRAZIER
              ON TIOE'
                PERMANEUT STRIKE REPLACEMElTS II THE 1980s
Both the National        Labor Relations        Act of 1935 and the.National
Railway Labor Act of 1926 allow employers                   to hire employees to
permanently     replace     striking      workers,    even if the striking
workers unconditionally            agree to return       to work.        It has been
widely believed,       although       there are little        supporting        data,   that
employers    have hired permanent strike              replacements         much more
often since 1981 when President               Reagan fired      and permanently
replaced    about 12,000 striking           air traffic       controllers.          That
use, in turn,     has been seen as increasing              workers'        fear of being
permanently     replaced      if they strike       and decreasing          their
willingness     to strike.
To assist     in deliberations       regarding    legislation        that would
eliminate     the use of permanent strike           replacements,        you asked us
to document the trends         in strikes      and use of permanent         strike
replacements.       We obtained      the data about the number of strikes
from the Federal       Mediation     and Conciliation         Service.     The
information      about use of permanent replacements               came from
interviews      we conducted     with employers       and union representatives
who were knowledgeable         about specific       strikes     that occurred      in
1985 and 1989.
Decrease in the number of strikes.          The number of strikes       in the
United States during        the 1980s was about one-half      what it was
during    the 1970s.      During the 1980s, there were about 1,250 work
stoppages      a year compared with about 2,660 a year during         the
1970s.      Between 1970 and 1981, the annual number of work
stoppages      ranged from 1,937 to 3,111.       In contrast,   the number of
work stoppages       since 1981 has ranged from 647 to 1215--never
reaching     the lowest level    of strike  activity    in the 1970s.
Employers announced they would hire permanent             replacements     in
about one-fourth      of the strikes     in 1985 and 1989.       We estimate
that employers      announced they would hire permanent strike
replacements     in about one-fourth       of the strikes    reported   to the
Federal   Mediation     and Conciliation     Service   (FMCS) in 1985 and
1989:    about 23 percent      of the strikes      in 1985 and about 30
percent   of the strikes     in 1989.      In both years,    about 15 percent
of them actually      hired permanent replacements.
Permanent replacements         were hired    less often      in the late 1970s
than in the late 1980s.           In the opinion      of both employers    and
union representatives,         permanent strike       replacements    were hired
in proportionately        fewer strikes    in the late 1970s than in the
late 1980s.       About two-thirds      of the employers       and almost 90
percent   of the union representatives           responding     to this question
said permanent      replacements     were hired     less often in 1975-1980.
Mr.   Chairman     and Members of        the     Subcommittee:
I am pleased      to be here today to provide          some information        about
the practice      of hiring     permanent    employees to replace       striking
workers.     As you requested,        I will   document the trend in the
number of strikes        in the United States during         the 1970s and the
1980s.     I will   also describe      the extent    tb wh'iph permanent
strike   replacements       were being used in the late 1980s and
opinions    about the change in their          use since the late 1970s.
Our major     points     are the    following:
       --      The number of strikes    in the United States during the
               1980s was about one-half    what it was during the 1970s.
       --     We estimate     that employers       announced they would
              hire permanent strike         replacements     in about one-
              fourth    of the strikes      reported    to the Federal
              Mediation    and Conciliation        Service    (FMCS) in 1985
              and 1989, and about 15 percent            of them actually
              hired permanent      replacements.
       --     Both employers       and union representatives       we interviewed
              agreed that permanent         strike  replacements     were hired   in
              proportionately       more strikes    in the late 1980s than in
              the late 1970s.         Union representatives      described    a
              greater     increase    in the use of permanent
              representatives       than did employers.
Before discussing   these points               in detail,  I would like.to provide
some background   on the purpose               of our study and the methodology
we used to carry out our work.
BACKGROUND
The National    Labor Relations            Act of 1935 (NLRA) is the principal
federal    law governing       private      sector    labor relations.        The NLRA
covers labor relations           in most industries          with the major
exceptions    of the rail,         airline      and agricultural     industries.     It
also excludes      federal,      state and local         government    employees.    The
NLRA provides     basic protections             to workers.      Among these are the
right   to bargain     collectively,          to strike,     and to cease
employment during        a labor dispute.
In 1938, the U.S. Supreme Court in NLRB v. Mackay Radio &                               '
Telegraph     Co. interpreted        the NLRA's protection            of workers'
right    to strike     as not precluding       employers       from hiring       employees
to temporarily       or permanently      replace     striking       workers.      If the
strike     is deemed to be for unfair          labor practice           reasons
 (employer    conduct prohibited        by the act),        the striking        workers
are &titled        to full   reinstatement       upon their       offer     to return     to
work.      If the strike     is for economic reasons             (related     to terms
and conditions       of employment),       the employer must only rehire
striking     workers when or if vacancies            become available.
An earlier     law,    the National       Railway Labor Act of 1926, governs
labor relations        between employers        and carriers     (railroads   and
airlines    among     others)     that affect     interstate   commerce.     Courts
have ruled     that    employers      covered by this act have an analogous
right    to replace      striking     workers permanently,      even if the
striking    workers      unconditionally       agree to return      to work.
It has been widely            believed,     although    there have been little
supporting       data,    that employers         rarely   hired permanent strike
replacements        until     1981 when President         Reagan fired       and
permanently        replaced      about 12,000 striking           air traffic
controllers.          Labor unions contend that,              because of President
Reagan's actions,           the hiring      of permanent       replacements      has
increased       substantially         and the number of strikes            has declined
significantly         since 1981.        They believe       that workers'      increasing
fear of being permanently               replaced     if they strike       has contributed
greatly       to the'decline        of strikes      and has effectively        eroded the
bargaining       power of unions.
Because of these concerns,            the Chairman of this        Subcommittee      and
the Chairman of the Subcommittee              on Labor-Management        Relations,
House Education        and Labor Committee,        introduced     bills    (S.2112 and
H.R.3936)      that would prohibit        employers     from hiring     permanent
strike     replacements.        To help assess the need for such
legislation,       they asked us to document the trends               in strikes    and
use of permanent         strike   replacements.
OBJECTIVES, SCOPE, AND METHODOLOGY
To answer your question            about trends     in the number of strikes,        we
obtained     data from FMCS on the number of work stoppages                 of any
size and duration          that occurred      in industries      covered by the
National     Labor Relations        Act.     The act requires      covered employers
and unions to notify           FMCS when a proposal         to terminate   or modify
an existing      collective      bargaining     agreement     has been made but no
agreement has been reached.               Since 1947, FMCS has maintained
records    on work stoppages         occurring    when that lack of agreement
results    in a strike        or lockout.1      Since 1985, these records have
been in a computerized           data basem2

lStrikes    are work     stoppages     initiated     by employees,    while
lockouts    are work     stoppages     initiated     by the employer.
2The FMCS data base should include               most work stoppages        in
industries     covered by the NLRA which occurred              at the termination
of a collective       bargaining      agreement.      In addition,       it includes
some work stoppages        associated      with agreements       outside    of the
scope, of the NLRA. For example,               the file   includes       some strikes
by primary      and secondary        school employees covered by state
collective     bargaining      laws.     The data base does not distinguish
                                             2
 In extensive      discussions     with representatives         of the Bureau of
Labor Statistics,         the National      Labor Relations       Board, FMCS,
several    unions,      and members of academia,        we discovered        that no
comprehensive        data are available       on the use of permanent
replacements       for striking      workers.     Thus, to answer your question
about the use of permanent replacements,                we identified        a random
sample of work stoppages           from the FMCS computerized            data base and
collected     data from employer and union representatives                   to
determine     whether permanent replacements            had been used.          We
selected     samples from 2 years,         1985 and 1989, which were the
earliest     and latest      years for which the information            we needed to
conduct our survey was readily             available.     Because we could not
obtain    data on the actual         use of permanent      strike     replacements    in
the late 19709, we also assessed opinions                about the change in use
of permanent       replacements      from the late 1970s to the late 1980s.
In May 1990, we interviewed              by telephone    the union and management
representatives         identified     in the FMCS data base as knowledgeable
about each of the strikes.3               We asked them about the use of
permanent      strike     replacements      both in the specific      strike     in our
sample and in the United States                in the late 1970s and late 1980s
in general.          If we could not reach the individual           identified      in
the FMCS data base, we tried              to obtain   the information        from
another    union or employer representative              familiar   with the
selected     strike.
We attempted       to reach employer and union representatives           for
about 150 strikes         in each year, a total     of about 600 interviews
regarding     300 strikes.       We were successful     in getting  information
on 132 strikes         (87 percent)   that occurred   in 1985 and 141 strikes
 (93 percent)      that occurred    in 1989.    This represented    completed
interviews      with 442 individuals:        224 employers    and 218 union
representatives.
About two-thirds         of the strikes    were described      by two
respondents.       If    only one person described      the    strike,   we used
that description.           Where the two disagreed,      we   did not use
information     about      that strike.     (This happened     in 17 percent    of
the strikes     that     occurred    in 1985 and 14 percent       of those that
occurred     in 1989.)
From the results       of our survey,   we can estimate     the use of
permanent strike       replacements   in all strikes    reported   to FMCS in
1985 and 1989.        We can also estimate   the opinions      of other

between    lockouts      and strikes.
3We eliminated      from the study      any work stoppages        respondents
identuified    as lockouts   rather     than strikes.

                                           3
employers     and union representatives   we did not interview
regarding     use of permanent replacements   generally   in the               U.S.4

STUDY RESULTS
As previously       mentioned,   our study addressed     (1) the trend            in
number of strikes,         (2) use of permanent   strike    replacements            in
1985 and 1989, and (3) opinions          about the extent      of use of
permanent     replacements     in the late 1980s compared with the                late
1970s.
Number of Strikes        Declined    Sharply    in 1980s
Substantially         fewer work stoppages          were reported    to FMCS during
the 1980s than the 1970s and, according                  to FMCS officials,       the
vast majority         of the work stoppages          are strikes   rather    than
lockouts.        Therefore,       we conclude     that the number of strikes
declined      sharply     in the 1980s.        During the 1980s, there were
about 1,250 work stoppages              a year compared with about 2,660 a
year during       the 1970s, a decline          of about 53 percent.         Between
1970 and 1981, the annual number of work stoppages                      ranged from
1,937 to 3,111.           In contrast,      the number of work stoppages          since
1981 has ranged from 647 to 1215 --never                 reaching    the lowest
level    of strike       activity     in the 1970s.      The greatest     decline
occurred      between 1979 and 1983.            In 1979, there were 2,897 work
stoppages      compared with 647 in 1983, a decrease               of almost 80
percent.        (See figure       1.)
We did not attempt           to determine    the extent    to which this trend in
strike     activity       is related   to use of permanent     strike
replacements         rather    than other factors    thought   to influence  work
stoppages.          These other factors      include   general   economic
conditions        and the overall      volume of collective      bargaining
activity.




4Estimates     derived   from a statistical     sample are subject       to
a certain     amount of sampling error,      given as a plus and minus
value*around      the estimate.    The sampling    errors     for percentages
reported    did not exceed plus/minus       8 percent     for any estimate.
                                            4
GAQ Work Stoppages Reported
    to FMCS
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             ww
             moo
             1500

             1000




               0

                1971     19-n      1975      lwr?      1979   1981   19W   19ss   1987   lW9
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1



Employers  Announced They Would Hire
Permanent Strike   Replacements   in
About One-Fourth   of the Strikes
We       estimate    that employers  announced   they would hire permanent
    strike    replacements   in about one-fourth     of the strikes    reported
    to FMCS in 1985 and 1989:        about 23 percent     of the strikes      in
    1985 and about 30 percent       of the strikes     in 1989.5    (See fig.    2.)



    5Considering       the sampling  error  of our estimates,     the actual
    percent    of strikes    in which announcements     of permanent
    replacements       were made was probably    between 15 and 31 percent                      in
    1985'and    between 22 and 38 percent      in 1989.    Therefore,    the
    apparent     increase   between 1985 and 1989 is not statistically                         significant
                                                              5
            *   .

        c

    .

.




                    CAQ Use of Permanent Strike
                        Replacements, 1985 & 1989




                                 1886     1010
                                 Cebnder yew etrlke bagm

                                        No nplammont annwnwment
                                        Announced.no replacements
                                        Announed. hired replacwnentr



                    2


                As figure   2, shows, however,      some employers         who announced that
                they would hire permanent       replacements      did not actually         do so.
                According   to our respondents,      when announcements           had been made,
                about two-thirds     of the employers     actually       hired    replacements    in
                1985, and about one-half      of them did so in 1989.              We estimate
                that employers    actually  hired permanent         strike     replacements    in
                about 15 percent     of the strikes     in each year.
                Employers and Union Representatives
                Believe Permanent Strike Replacements
                Were Hired Less Often in Late 1970s
                Than in Late 1980s
                Both employers     and union representatives      believe that permanent
                strike   replacements    were hired  in proportionately     fewer strikes
                in thk United     States  from 1975 to 1980 than in strikes       from 1985
                to 1990.      (See fig.  3.)  However, union representatives
                                                                       6
described     a greater     shift     in the hiring      of permanent
representatives       than did employers.            Based  on those responding       to
this question,       about   two-thirds      of   the  employers    believe
permanent     replacements        were hired    less often     in 1975-1980,    but
almost 90 percent        of the union representatives            believe    they were
hired    less often.       Overall,     almost one-half      of the employers       (45
percent)     and one-third        (34 percent)      of the union representatives
felt   they had no basis to answer this question.



m          Opinions on Change in Hiring.
           Permanent Strike Replacements
           00   Percentet Rwpwdants Wllh Oplnlom

           70




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                                                                              amallar           1m




           Note: 46 percent of the employers and 34 percent of the union representatives cc&d not answer this
           question.




3
In addition      to asking them about the change in hiring              permanent
replacements,       we also asked employers        and union representatives
how often     they believed      replacements     were hired     in each of these
periods.      Again,    employers and union representatives            generally
agreed,   but union representatives           described     a greater   shift.    As
figure   4 shows, about two-thirds          of the union representatives
believe    that employers      hired permanent       replacements     in few or
none of the strikes         in the late 1970s while about 60 percent             of
them believe       employers   hired permanent       replacements     in half or
more of the strikes         in the late 1980s.




GAQ Union Opinions: Hiring
    Permanent Replacements
           70   Puomof mpon&nW wllh oplnlonm




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                    Prqwlta     ot tirllu   with ~ununmt olrlko ropkuluntl

                I             Lala 19701(197&1990)

                              Lam 199ol(19951990)
                I

           Note: 40 percent could not answer this question regarding the late 1970s and 39 percent could not
           answer it for the late 1990s.




4
Of the employers      who answered this question,          about half of them
believed    employers    hired permanent     replacements      in few or none
of the strikes      in the late 1970s.      However,     in contrast   with the
union representatives,        only 16 percent      of them believed
employers    hired permanent replacements          in half or more of the
strikes   in the late 1980s.       (See fig.     5.)


m         Employer Opinions: Hiring
          Permanent Replacements,
          70

          so

          so

          40

          30

          20

          10

           0


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                           Lam 197ol(19751m)
               0
                           Lam 19wl   (l9eslwo)


          Note: 50 percent odd not answer this questbn regardngthe late 1970s and 44 Percentcculd not
          answer it for the Lete 1980s.




5

This concludes  my statement.                                I will     respond           to your       questions
about our work.




                                                                 9