As unions become marginalized, past gains are hard to hold

Take cars, for example. As long as there were just three big automakers, and all three negotiated the same deal with the United Auto Workers, everyone made out fine. Workers got good wages and benefits; the carmakers suffered no competitive disadvantage. What screwed up the arrangement was the arrival of lower-priced, nonunion imports from Japan. By busting up the cozy nature of the competition, the imports sent the auto unions into a downward spiral that they haven't been able to reverse.

With only slight variations, workers in steel and airlines suffered the same fate. New rivals came in, the old-line firms had to cut costs, and both wages and union membership came down.

There are still some isolated pockets of the economy where the old rules apply, but you have to wonder how long they can hold out. Consider the plight of supermarket workers in southern California. For the past five weeks, 70,000 union workers have been on strike against the region's three big supermarket chains.

Historically, the union enjoyed a relationship with the markets that very much resembled Detroit circa 1970. The markets negotiated a single union deal, so the stores all paid the same wages. By supermarket standards, those wages are excellent. An experienced cashier can earn as much as $17.90 an hour plus a very attractive healthcare package. "It worked because no one rocked the boat," said Daniel Mitchell, a management professor at UCLA.

Until now. Wal-Mart has set its sights on Southern California and that prospect has the California stores nervous. Wal-Mart has lower costs for everything, including labor. Its nonunion employees typically make $8 to $9 an hour with fairly modest healthcare benefits.

Wal-Mart's "aggressive expansion will continue to steal share away from conventional food retailers at an alarming pace," wrote Retail Forward, a Columbus, Ohio, consulting firm, in a recent report.

With the enemy at the gate, the California markets want to freeze wages for existing workers and pay new hires far less. The union has dug in its heels, but it is hard to see how workers can hold their ground in a radically different competitive landscape.

Union workers at Verizon are doing better. In September the telephone giant signed a five-year contract with 79,000 union members that preserved wages and benefits.

So what's the problem? Verizon is under assault from a series of new technologies that are putting pressure on the company and its workers. Virtually all of Verizon's unions work in the traditional end of the business, the old monopoly operation that provides local phone service.

For the past three years, that business has declined. Customers are deserting Verizon's land lines in favor of wireless service, cable service, and local service offered by long-distance companies. Much of the competition is nonunion.

The result: Verizon's sales have been flat for two years and the company must cut costs. Verizon managers and union members have been offered a buyout and more than 20,000 of them may accept the package. The unions support the buyout, but union membership will inevitably diminish.

Howard Anderson predicts the downsizing will continue. "All the forces out there will erode the need for a high-cost, unionized work force," said Anderson, president of YankeeTek, a Boston venture capital firm.

In case you missed the point here, let me spell it out: We live in a harsh world in which companies keep finding ways -- from outsourcing to new technology -- to wring excessive costs from their operations. Unfortunately one man's excessive costs are another man's middle-class wages. Unions won those wages in a more benign competitive climate. In today's bare-knuckle environment, hanging on to past gains will only get harder.

Charles Stein is a Globe columnist. He can be reached at stein@globe.com.