Steelworkers suffer big defeat in Mesabi Nugget vote

Last Friday, the United Steelworkers conceded defeat in the unionization vote at the Mesabi Nugget plant near Aurora. The Mesabi Daily News had the story.

According to Mesabi Nugget the vote was 57-21. The vote took place over two days, included a complete unionization drive by the Steelworkers and was overseen by federal labor officials.

In an Iron Range region known as a labor bastion, the first question has to be how did this happen? And what does this mean?

Mesabi Nugget is among the newest iron ore processing facilities on the Range, using a modern process to create iron nuggets that are purer than taconite pellets. It opened after the early 2000s mining slowdown and before the big recession of 2008-2009.

Thus, the people working there were very happy to get those jobs. And why not? The pay has started at about $50,000 a year with a $75,000 a year average, plus incentive programs based on production. That’s really good pay on the Range, especially if you’ve strung together jobs at foundries, manufacturing companies or the like over the years. For a younger worker here, this is as good as it can get.

The union’s dominant argument seemed to center on safety. Union representation would mean a consistent eye on safety so that the rush to meet quotas for incentives didn’t threaten lives. But the workers simply opted for the good pay and a work environment they apparently like. That could change. But it didn’t sway the vote last week.

It’s hard to avoid the political ramifications. Private industry labor unions were the backbone of the region’s DFL political coalition from WWII to recently. With workforce reductions the mines are still the dominant employers, but in much smaller numbers than the ’70s. A modern mining job is better than ever, but less plentiful. As those jobs have become more technical, mines have become more precise in how they hire (you have to take a personality test, for instance). Those two factors taken together makes unionism harder to take hold.

Further, younger workers on the Iron Range have no personal memory of the kinds of working conditions that made unions as important as they once were. I know a lot of the folks just hired at the mines these days. I went to school with them. They’ve struggled through sluggish construction trades and attempts at self-employment for a decade; now these mines are paying good money. What’s a union?

This means that the DFL’s strongest ally — labor — is still alive, but weaker. All but one of the mines are still solidly union, but any union steward would tell you its harder to get people excited and active in the union these days because the pay is good. Several Range mine unions willingly voted away the eight-hour day because younger workers prefer longer shifts with more days off.

So, while the DFL has a socioeconomic and cultural advantage on the Range today it will have to dramatically retool its long-term strategy to hold its historic margins here.

Finally, the vote at Mesabi Nugget is one thing. But when looking ahead at future union votes on the Range — particularly at Essar Steel when it opens and any of the potential nonferrous mineral mines on the east Range — we have a real question. Can labor regroup and become relevant to newer workers, both young Rangers and those who come in from outside the area? That’s a daunting challenge.

The labor movement was absolutely critical to the growth and success of the middle class across America, particularly on the Iron Range. As labor has waned, so too have the fortunes of your average Range worker (remember, they don’t work at the mines). But the times are changing and it’s important for labor and free marketers alike to deal with the future in real terms.

This non-union vote at Mesabi Nugget could be marked as a major milestone on a shift that in ten years takes the 75 percent DFL Mesabi Range and makes it more like the DFL-leaning swing districts found on the Cuyuna Range north of Brainerd or in Michigan’s Upper Peninsula. There are ways to avoid this fate but all involve something different happening than is currently happening.

Comments

  1. It is a milestone but certainly not the first in the “Wising-up of the Range” era.

    The firing of Solberg, the firing of Oberstar, the decision of Kestrel not to invest in Duluth Mn but Superior Wis, the decision of Magnetation not to locate on the Range but in another state were all equally significant in a long line of milestones preceeding Mesabia Nugget’s vote to kick out the union.

  2. I agree, Aaron, that this is potentially an important event in the Range’s labor history. Only time will tell if the Mesaba Nugget vote was an outlier or the first crack in the Steelworkers’ control of the region’s iron ore industry. If you look to other mining regions in the US, however, the signs point toward declining union density. New Appalachian coal mines, for example, are often non-union operations, with young miners preferring high wages and other company-provided goodies (trucks, boats, guns, etc.) to union membership. From this perspective, perhaps the more important question is how did the Steelworkers keep union density in the iron mines so high over the past few decades?

  3. Would it be fair to say that Range society has been… engineered? It is not just personality tests. There is a plethora of practices in hiring utilized on the Range these days. It is not just hiring practices. There is the clustering phenomenon. The cluster moving there, or choosing to stay, is pretty obvious. Both Jeff and Ranger 47 make great points. Good discussion.

    I think this is an important discussion as it relates to economic diversification. Simply put, the current perception of Range society (probably purposefully created) will not attract the creative class.

    I would like to point out that the core tenets of Range society are not gone. The concepts of cooperation, community, and self-governance have simply moved to the nursing homes, hospitals, and clinics. The female population of the Range has grasped that idea of people running their own local units, in terms of union membership. If it was a new hospital opening, fellow nurses would probably have organized each other. I imagine the folks trying to organize Mesabi Nugget were paid staff, not fellow miners.

  4. Yes, thanks for the good discussion everyone. I think there are several factors that influenced the Oberstar and Solberg loses, but political realignment was part of the equation anyway. And yes, the Iron Range should be noted for having held on to post-war union perspective far longer than other regions of its kind. I think that was a cultural thing as much as anything economic.

    T always brings up clustering and I always geek out over that. The “cluster” forming among young professionals today on the Range is not a union cluster. People are more individualistic, more driven by their own families and interests than the abstract concept of “solidarity.” (It’s hard to have perspective on that when the factors that created union strength aren’t the same anymore).

    Yes, I think you need only look to the MNA nurses organization at Hibbing hospital to see a way in which labor survives into the next generation. As our economy moves toward services, service workers are the ones getting grinded the way the miners did in the early 20th century. Nurses are the higher trained workers organizing well now. Just like skilled workers of the 1900s in the mines.

    Honestly, it feels more and more like we’re running a replication of the 20th century with the internet and decentralized world power. Let’s see how it turns out this time!

  5. If most of the workers are fairly young, they might not realize the importance of benefits, which “might” be better if there is union clout.

    With the swing of the whole country to the right, there is more anti union sentiment. My son moved to NC, which is a so called right to work state. The way I see it, that means that the employer has all the rights. His first job there was at a restaurant, a national chain, in 2009. He was paid $2.13/hr, + tips. He said tips were low, due to the whole region being low wage. The same chain restaurant pays $4 in CO, and >$6 in Minneapolis. I firmly believe that the higher union wages helps increase wages of many other positions in an area. For example, average teacher salaries are also low in NC. I made a point of researching state labor laws in NC. The employer has many options to manipulate a workers schedule; the employee can’t do much. I’ve come to appreciate what unions can offer.

  6. P.S..here’s a forethought worth considering.

    People need a job. Businesses provide jobs. Businesses which have a unionized workforce are inherently less productive than those with a non-union workforce. Less productive businesses eventually die, jobs go away, people are jobless. Unions therefore are a major cause of unemployment. Amen.

  7. “Businesses which have a unionized workforce are inherently less productive than those with a non-union workforce.”

    Evidence, please. Until you can muster some, I call B.S. on this.

  8. When I first moved to the Range, I heard many stories of jobs being padded because of the unions. I don’t know if that is true in general, or just anecdotal of a few instances. I see that as a failure if BOTH union and management, if it is true.

    I believe it is true that that the number of workers has dropped more than the average output of taconite. If so, that is also a credit to both management and workers.

    But just read a little history to see what conditions were like before unions. Owners didn’t make things better before pressure.

    Few owners/managers are like the restaurant owner I worked for in 1967. Minimum wage was about $1.25, less if you got tips. But he paid low skill workers like me $2/hour. The pizza makers and delivery manager earned $4/hour.

  9. cjh…
    We can exchange data ’til the cows come home, but I base my “union shops are inherently less productive” on personal experience. I’ve worked in both atmospheres..at length.

    However, if you wish:

    From a leading American labor relations firm:

    Research indicates that the cost of running a unionized operation is 25% to 35% greater than for a non-unionized one. A recent study by Adams, Nash, Haskell & Sheridan revealed the administrative budgets of a major manufacturing company which operates both union free and unionized were 30% higher at the unionized facilities due to:

    Larger human resources staffs to deal with grievances, job descriptions, rate negotiations, etc.

    Increased involvement with regulatory agencies, especially those associated with OSHA and the EEOC.

    Expensive indirect costs in the form of outside services, such the need for a specialized labor attorney to deal with contract negotiations, handle grievances and arbitrations, and review compliance with a collective bargaining agreement.

    Other costs included:

    Added administrative staff for dealing with union issues.

    Contracting with consultants to develop an action plan for a possible work stoppage or strike.

    Wages for short-term replacements if a strike occurs, which can be significantly higher than striking employees wages, especially if replacements are required for highly trained positions.

    Now, regarding productivity. It’s lower in unionized environments due to:

    Employee anger & frustration when the collective bargaining process does not result in the changes promised by a union.

    Union strategies and rules that impair the employee-employer relationship by playing on employee emotion and interfering with direct employee-supervisor communication which casts the employer in the role of “enemy” and results in employee mistrust of all management.

    Diminished employee participation in workplace decision making.

    Less flexibility to move quickly or creatively in response to change due to union rules and related contract language that results in rigid operating guidelines.

    Increased difficulty recruiting and retaining the most creative and effective employees.

    Union-imposed rules which limit rewarding an employee based on performance or productivity.

    Union grievance procedures which protect low-performing and negative employees.

    Decreased customer satisfaction during work stoppages or strikes.

    There you go…

  10. Ranger, you’re telling me that unions can be a pain in the neck to management, which is not news. But agitating for better wages and conditions is pretty much the entire point of collective bargaining. And I tend to agree with some of your points about administrative burdens and the like, but boo hoo for US Steel. If their operations were not inherently lucrative they would not be paying premiums for shift work and holidays to keep the enterprise humming around the clock. When you say a non-union shop is “more productive,” you’re talking strictly about the shareholders’ prerogative: extracting value added (by labor) and passing it along to shareholders. But the discussion revolves around a larger context: the greater regional economy. The corporation’s interests are already well represented; they don’t need your help. On the other hand, high wages and benefits reverberate throughout the whole economy — to everyone’s benefit — and are worth fighting for. In short, we all do better when we all do better. Right-to-work states, by contrast, tend to see lower standards of living, as PS has already illustrated. And since Aaron has explained the situation far more eloquently in his “labor woes” post, I will leave it at that. Thanks for listening.

  11. Let’s start with your premise that higher wages and benefits are the answer to a higher standard of living, benefitting everyone in the region. So all we have to do is – raise everyones wage and benefit, annually, monthly, heck daily. Can you tell me why we don’t?

Speak Your Mind

*