“Leverage” – rethinking the SAG/AFTRA merger’s big myth

Among the most important considerations that unions have to take into account in today’s rapidly changing economic environment is how to gain a foothold in their industries. With longstanding and stable business models being torn up across the economy this is a real challenge.

Modern American unionism was built on a joint relationship with management that formed the core of what was called the Industrial Relations era. In that era, which ran roughly from the passage of the Wagner Act in 1935 to the Reagan presidency in the 1980’s, stable collective bargaining linked pay hikes to increases in productivity and profitability. That economic arrangement made the toleration of unions by American employers – who have historically been viciously anti-union – possible.

But beginning roughly in the 1970s, American companies faced new competition in the global economy from places like Japan and Germany where rebuilt post-war economies had put in place new technologies and new forms of labor-management relationships. These challenged the American Industrial Relations model and laid the ground for an anti-union backlash based on arguments that unions had become “special interest groups” that undermined U.S. competitiveness. When former trade unionist and SAG president Reagan fired the air traffic controllers it signaled the end of that era.

As a result a great achievement of the American people, the formation of genuine organizations that countered the power of big corporations in the form of unions, was in danger of being destroyed. Over the last few decades two areas of the economy have escaped this fate. These are in the public sector where, obviously, teachers, fire fighters, and police cannot be easily replaced by low cost imports, but also in certain corners of the private sector.  Where unionization was established in the big wave of union struggles of the 30s and where the goods and services those corners produced could not find easy substitutes out of the sweatshops of Mexico or China, unions continued to survive.

The entertainment and media industry, the trucking industry, the railroads and air travel sectors – these are all arenas where unions have faced tremendous challenges but where they have nonetheless survived.

But while these unions escaped the first wave of Reagan era attacks followed by globalization, there is nothing that makes them genuinely immune from attempts to displace them. The most dangerous foe that these unions face, in fact, is not the anti-union attitudes of this country’s employers, as vicious as those are, but rather technological changes that make unions seem reactionary and out of date.  When revolutionary technologies appear and disrupt entire industries, employers receive a double gift: new profitable lines of business but also a seemingly politically neutral excuse to crush labor organizations in those industries.

It is becoming increasingly clear that the semiconductor combined with the internet is precisely this kind of threatening technological revolution. It has already produced tremendous social value, to be sure, but it has done so in a very particular economic context. That context has allowed employers to adopt and deploy computer based technologies in a way that devastates wide swathes of what had been stable industrial business models.

The entertainment and media industry has long been a heavily unionized sector. It still takes people aback when one describes for them the fact that across the board big film producers like Disney or Fox are heavily unionized, from the truck drivers who deliver production equipment to a set in the desert, to the cameramen, to the writers, the actors, and even, in their own way, the directors and producers.  All in labor organizations or guilds or traditional craft unions.  All the beneficiaries of collective bargaining agreements that have for many decades delivered solid wages, good hours and reasonable working conditions to those union members.

And the employers, the owners of the production companies, the film studios, the television broadcasters, have found a way to make a profit, in some cases, amazing profits, while employing union labor despite the inevitable volatility of an industry where no one can predict what will be a success and what will not ($55 million for Ishtar??).

But that is no longer possible. The threat created by the powerful new technologies emerging every day from Silicon Valley are tearing apart a fifty year old business model in a manner never seen by the entertainment and media industry before. The core of the threat is that new technology makes it possible to finance, produce and distribute content in far less expensive and complicated fashion than ever before. As a result the bastions of the industry in New York and Hollywood are scrambling to figure out how to fight back.

The recent battle over piracy is clear evidence of how out of their depth the industry remains. A colleague of mine here in the Valley was a leading advocate for the Valley’s effort to defeat the piracy legislation. He credited the “user revolution” as key to the success of the Valley’s lobbying. In other words, the Valley used its own revolutionary technology in a fashion akin to the activists of the Arab Spring to spread the word and make their argument. They did not rely on a paid off ex-politician like Chris Dodd who engaged in what turned out to be old fashioned and ineffective arm twisting of inside the beltway politicians. The battle was fought and won elsewhere – in the hearts and minds of the users of the internet.

The proposed merger of SAG and AFTRA resembles the decision of the Producers to rely on old time lobbying by an ex-pol to win the piracy battle. It is a case of the generals fighting the last war. What is happening is that SAG and AFTRA leaders are being influenced, even courted in the case of AFTRA, by AFL-CIO leaders who are victims of the earlier Reagan and globalization era anti-union attacks.

Many of those unions had no choice but to merge with larger players or else they would go out of existence.  One of my first tasks when I started out in the labor movement was to train the shop stewards of the Hod Carriers local union. Hod carriers, believe it or not, still exist but they have dwindled in size as technology for delivering cement and other materials to a building site have changed radically. (And even when such mergers seem unavoidable there are problems as this video suggests.)

But of course SAG and AFTRA have other choices. They are not like the Hod Carriers. The technology is a threat but it is only now being rolled out. There is a tremendous opportunity for the right union strategy to play a major role in shaping the new forms the industry will take. In its most successful moments, American unions have not simply accepted the business models of the employers as a given, instead they have been pro-active in shaping them. A prime example is the success of Jimmy Hoffa (the father) in leading the organization of the trucking industry itself in order to support his strategy of organizing over the road truckers. That strategy was shaped in part by the socialist labor activist Farrell Dobbs, a leader of the Minnesota teamsters union.

Another example is closer to home for SAG. In the 1940s one of SAG’s rising leaders was the same Ronald Reagan who would later lead employers in a brutal attack on unionization signaled by his battering of PATCO, the air traffic controllers union. But in the 1940s Reagan was still a liberal, even a leftist of sorts, and certainly a trade unionist. One should emphasize the word “trade” in the term trade unionist. Reagan understood the value to SAG of building on its “guild” heritage which meant the organization primarily represented actors. A genuine “trade” union relies for strength on its membership coming out of the same industrial conditions. Not only does it mean that the members understand each others’ problems more readily it also insures that its leaders remember their roots.

On Sunday the Los Angeles Times published an article that details Reagan’s effort in the 1940s to fend off a campaign by a Communist Party influenced labor grouping to displace the IATSE from its traditional role representing craft workers in the industry. The CP influenced group wanted to form a new form of organization that would amalgamate a wide range of crafts into a “Conference of Studio Unions.” Reagan and a key IA leader, Roy Brewer, saw that this kind of centralized structure would give the union officials, and those CP’ers among them, undue power and control.

The Times article author, John Meroney, was initially suspicious of this story because of Brewer’s and Reagan’s later role in supporting red-baiting in Hollywood. But even he was forced to note that at this point in time Brewer and Reagan were on the left. What he found surprised him:

In 1945, a strange battle erupted in Hollywood’s 42 craft unions that reflected the Soviet Union’s overarching goal of controlling the worldwide labor movement. Undercover Communists seized control of a painters’ union, formed a larger umbrella group with cartoonists, readers, secretaries and publicists and called a jurisdictional strike, with the goal of taking over other unions.

Archive documents—and court decisions from the 1950s—disclosed their goal: to create one industrial union for all of Hollywood. While the vast majority of the members would be rank-and-file laborers, the organization would be controlled by Communists. To succeed, they had to drive a wedge between labor allies and create chaos in the existing labor structure.

In other words, history’s greatest experts in bureaucratic and undemocratic organization, the Communist Party, were using the labor movement to fashion its own new bureaucratic industrial union to wield power in the industry.

This approach was in stark contrast to SAG’s vibrant internal democratic life. Even the IA had under Brewer’s leadership begun to act in a more democratic and less corrupt fashion (the mob connected leaders had been tossed out several years earlier). Initially sympathetic to the CSU, SAG leaders realized the intransigent approach taken by its leadership was more likely a response to the personal political goals of those leaders than to the interests of its rank and file. SAG refused to support a strike the CSU called and in fact the CSU’s own members eventually revolted as well.

The important backdrop to the story was Reagan and Brewer’s understanding that anti-trust decisions by the US Supreme Court were tearing apart the business model that had sustained the film industry. In fact, the anti-trust decisions were in many ways similar to the impact of the internet is today – it altered the distribution pipeline of the industry for decades to come. In that context, the mindlessly militant strike strategy pushed by the CSU made little sense. There was a need to craft carefully a union strategy that took into account the changing industrial situation.

As Meroney concluded:

By vanquishing the [Communist influenced] painters’ union, Reagan and Brewer preserved IATSE and SAG and the larger American Federation of Labor structure in Hollywood. Their strategy also essentially saved the motion-picture industry, which was struggling financially because television was siphoning moviegoers and courts were ruling that studios could no longer own movie theaters, as they had for decades.

Mergers of unions often force together in opaque bureaucratic structures union members with very different backgrounds and interests. In those cases, it is union officials, including paid professional staff and long serving elected representatives, who gain greater power. It becomes harder for the rank and file member to organize independently to guarantee genuine democratic control of their own unions. The staff and officials live very different lives than most of their own members and they can often behave as if they belong to a different, superior, caste.

Thus, it is perhaps no surprise that AFTRA’s and SAG’s current leadership, hell bent on merger, has done little to explain concretely how merger as currently proposed would improve leverage in the rapidly changing entertainment and media industry. An alternative of course would have been to divide AFTRA and have the journalists join other news media workers inside the CWA and actors and other performers like recording artists join SAG. That would have produced a far more coherent new one big actors union that would maintain the valuable SAG history, tradition and reputation. I think that kind of brand “goodwill” is an asset that a smart SAG leadership could deploy to increase actor leverage in the industry. Now, however, that goodwill will all but disappear.

More importantly, the leadership of such a one big actors union would have a clear mandate and could focus on the particular problems affecting performers. It could begin the process of intervening in the reshaping of the industry now underway, in particular by establishing new relationships with Silicon Valley.

The alternative argument that SAG/AFTRA seems to be making is that the proposed merger will lead to greater bargaining power with the entertainment conglomerates. But it is those conglomerates that are now threatened to their core by the new technology, including platforms like Netflix, You Tube and Facebook. Fashioning a strategy aimed at Rupert Murdoch makes no sense when it is really Mark Zuckerberg you have to worry about.

It’s a new day, and it calls for new thinking. Unfortunately, when it comes to the leverage myth, actors are only getting the “same ol, same ol.”