JIM LEHRER: A high-tech labor dispute, and to Ray Suarez.
RAY SUAREZ: This past June, Bell Atlantic and the GTE Corporation merged to become Verizon Communications, the dominant local telephone company on the East Coast. Sunday, more than 87,000 Verizon workers walked off the job after talks between the company and two of its unions collapsed. Issues in dispute include job security, forced overtime and union access to jobs in the company's wireless telephone unit. The strike affects 25 million customers in 12 states from Maine to Virginia, and the District of Columbia. Directory assistance calls and line repairs have been delayed, but basic telephone service and Internet access remains intact. Both sides returned to the bargaining table today, but a deal has yet to be reached.
Joining me now to discuss the strike: Scott Cleland, CEO of the Precursor Group, a Washington-based independent research company that focuses on telecommunications; and Richard Hurd, professor of labor studies at Cornell University. He is also author of several books and articles about contemporary union strategy.
Richard Hurd, let's start with you. What are the IBEW, the International Brotherhood of Electrical Workers, and the Communication Workers of America fighting for? Why did this strike start?
RICHARD HURD, Cornell University: Well, this is really about the future of the labor movement. Here we have a situation where a company has recently merged, the unionized company, Bell Atlantic, has recently merged with a company that's primarily wireless. And if the unions are going to have a future in telecommunications, they need to be able to organize the wireless part of the industry. And if the workers in the traditional part of telecommunications are going to have a future, then they need to have a form of job security that allows them to upgrade their skills as the industry changes.
RAY SUAREZ: What's at stake for the new company, Verizon?
SCOTT CLELAND, The Precursor Group: Well, what's interesting is the wireless industry is basically non-union. And it is growing at a 25% clip each year. And Verizon has about 25 million customers. That's compared to around 60 million on the wire line side. And they have nine competitors in some markets and four or five in others. And what the union represents is, are they going to have higher labor costs relative to their competitors? That's really where it comes down for Verizon.
RAY SUAREZ: If they are able to keep that wall around Verizon Wireless and not let it be organized, will that set a pattern for the rest of the wireless industry, and will it be able to keep what Scott Cleland mentioned, a place basically union-free environment?
RICHARD HURD: Well, there are some unionized workers in wireless now. This is a fight, though, between the company and the union over whether the union will be able to expand its influence in the wireless sector. And the CWA in particular sees this as an opportunity to really gain a stronger foothold in wireless so they can expand into the nonunion companies and actually over time represent a majority of the workers in wireless. There may be some short-term competitive disadvantage, but the issue for the union is to provide workers a voice on the job, not just to raise the cost of labor.
RAY SUAREZ: Well, Scott Cleland, let me flip that around. In other industries, when one of the big players does become organized, does that put the other companies in that sector on notice that it's only a matter of time for them?
SCOTT CLELAND: Well, it is strategic. Since Verizon is the largest local phone company and the largest wireless company, they're trying the make an issue now so that, like dominos, the rest of the industry would follow. But this is a new economy issue versus an old economy. And the unions in the wire line part of business, it's pretty much an old economy. Wireless, Internet, software, cable, those related industries are generally union-free. And so there's a little bit of a chasm here that the union movement is trying to move into these new-economy type of industries, and it's using this strike as the way that it can get a foothold.
RAY SUAREZ: Well, some of the people from the industry side have said, if we get organized, if the CWA and the IBEW come into the wireless portion of the business where the job growth is we won't be able to compete with other wireless companies that have no unions do. Do they have a point?
RICHARD HURD: Well, it really is much more than whether the workers are unionized. What matters is the combination of the quality of service that they offer and the cost that they... or the price that they charge for that service. So to the extent that the union is able to work with the companies to assure that quality continues to improve at a rapid pace and that has been the approach, particularly of the CWA, then there doesn't need to be a significant competitive disadvantage. Clearly they're going to want the workers to have competitive benefits and pay, and in the long term, attempt to spread that throughout the industry.
RAY SUAREZ: Interestingly, one of the things that the unions are complaining about is excess overtime. People... just saying, we are being worked too long. It's amazing how things have changed.
SCOTT CLELAND: Things have changed. When we think of unions and strikes, we think of people saying, save our jobs, this is, you know, they're cutting too many jobs and the company doesn't care about us. And right now one of the main issues is, we're getting too much work. There's too much overtime. And so what that tells us is the economy is screaming. It has been growing for several years. Unemployment is at a historic low. And so times are good. This is not about divvying up, you know, what remaining jobs we have, they're really negotiating about the fruits of prosperity, the spoils of growth.
RICHARD HURD: I don't know, I think really what you see in the traditional part of the telecommunications industry is there's been a historic decline in the number of jobs that's been fairly rapid over the past 15 to 20 years. And forced overtime is a way for the company to keep from expanding employment. And the union sees it as a job security issue. The workers see it as a job security issue because if you reduce the number of employees you have but require them to work longer hours, that means there's not as much job security in the future as opposed to expanding employment when the work expands.
RAY SUAREZ: Well, earlier you mentioned that right now in the old wire side of the business, Scott Cleland, the number of workers far outnumbers those who work in wireless. If you look out into the next ten years or so, is that a ratio that's likely to change?
SCOTT CLELAND: Yeah, it is likely to change, because, you know, the Internet industries, the wireless industries, these new economy industries are growing at a much faster clip. And while they're starting from a low base, as they get bigger, those growth rates will outpace kind of the traditional union jobs.
RAY SUAREZ: So Scott Hurd... Richard, rather, we're looking at an industry that some day, if this wall remains between the two sides of the business, could phase out all its union jobs?
RICHARD HURD: That's certainly what the workers are concerned about. I don't think that in the short term that's going the happen, but certainly down the road they're worried about Verizon shifting work into the wireless division that's now covered by the traditional division, and they're concerned that their jobs are eventually going to disappear.
RAY SUAREZ: Given what you know... Go ahead. Sorry.
SCOTT CLELAND: I want to add, the economy right now is like a silent negotiator. It is growing so quickly and people have such job freedom, the wireless workers, they know that if they aren't treated well by Verizon, they can go work for somebody else. They're very much in demand. And so, because the economy is so strong, the union strength is less. And if it was turned around and the economy was weaker, the union clout would be stronger.
RAY SUAREZ: So is that a recipe for a long strike with both sides heels dug in?
SCOTT CLELAND: Short strike.
RAY SUAREZ: Short strike. Why?
SCOTT CLELAND: I would be surprised if this went on more than a week or two. They're really not that far apart. They're not fighting about the old-style bitter contracts about whether or not health care would be provided for or whether they're going to cut 10,000 jobs. Now it's saying well, how much of the pie, the growing slice of the pie are we going to get, and how much are you going to get? That's a very different context.
RAY SUAREZ: Richard Hurd, do you agree?
RICHARD HURD: I think that it's going to be a short strike. There's indications that they've already reached some kind of tentative agreement on the organizing access for the union and on job security. They are still working on some of the details. I expect it will be relatively short, and I believe that the unions will deliver to their members access to training so they can keep up with what's going on in the field, some kind of job security, and the union will gain access, some kind of access at least to the wireless division of Verizon.
RAY SUAREZ: Gentlemen, thank you both.