Labor-Management Committees Are Economic Development Tools

A few weeks ago, the radio program, Marketplace, on National Public Radio had another segment on their continuing series about the economic situation in Erie, PA, and how it related to the outcome of the November election.  In this segment, one of the local union leaders mentioned people who usually did not work together or who normally opposed each other had decided to overcome their differences to work together to help improve the economic situation in Erie.  The question that came immediately to my mind was, why did they wait?  Why didn’t they come together before factories closed and people lost their good paying jobs?

Unfortunately, they’re not alone.  Working in reactive mode is common instead of being proactive on solving problems.  When we’re proactive we have some time to really explore options to produce positive outcomes instead of being pressured or having time constraints that don’t allow for good problem solving to take place.

In a 1983 report on the website of the Bureau of Labor Statistics, labor-management committees help economic development within communities. They do not take the place of collective bargaining at individual workplaces but they look at issues impacting workplaces and jobs in the broader community.  The objective of the community labor-management committee was, and still is, to help those in individual organizations work together on issues impacting the organization that could help to avoid shutdowns or layoffs.

While the report is dated almost 25 years ago, the mission of these committees is still needed as we look at closures and disappearing jobs.  In fact, the report stated community labor-management committees went back much farther.  They cited the community of Jamestown, NY, when manufacturing plants closed in the 1950s and ‘60s. The loss of jobs and young people leaving the community, much like what happens in communities today, was devastating.  Jamestown leadership organized a meeting of labor and management people to address the situation.

This, however, does not say all labor-management efforts are successful.  In fact, there is nothing to guarantee any success by any economic development tool.  We also cannot give a specific number of jobs saved by labor-management committees not because the committees haven’t saved any but because identifying an exact number of jobs saved is an unknown, unless there is an avoidance of a closure and that doesn’t happen very often.

While we would love to say a labor-management committee saved their jobs and those of their co-workers through modifications they made to their jobs because of new technology, we cannot confirm it because we don’t know if or how many people would have lost their jobs.  We also cannot say a labor-management committee saved jobs when they developed a voluntary furlough policy to avoid layoffs because we don’t know if the layoffs would have occurred.  In other words, a crystal ball is needed to determine that!

The classic case we can use is the diesel repair shop we have mentioned previously in our blogs.  The owner was ready to close down because of his workers’ compensation costs being too high due to a number of lost time accidents.  We can say, in this particular instance, at least 45 jobs were saved and, because he has been able to expand his business, more jobs are available or have been created.

Economic development professionals will tell you it’s more important to concentrate on job retention than to focus on new jobs coming into a community.  Politicians may like the big, splashy stories about a company relocating and promising a lot of jobs but those types of events don’t happen that often.  That means with job retention being so important it’s imperative labor-management committees be a tool in any community because they can be the eyes and ears of that community as to what’s going on or they can help individual organizations bring people together to address issues impacting their viability.

The story about Erie is reminiscent of a similar situation that involved in one of our colleagues.  Several years ago, she worked with a small community in north central Ohio.  The community is smaller than Erie but the problems were the same.  Companies with good paying jobs were closing and the unemployment rate was high.  The crisis peaked for this small community when a long-time furniture company announced it was closing because it was no longer able to obtain loans through their bank.  When the mayor learned about this, she got to work.  As a life-long member of the community, she was not about to let the closure happen.  After contacting, state officials, she organized the community to address the problem.  She invited labor, management and other community people to work on the issue which is exactly what a typical community labor-management committee is all about.  They were able to avoid the closure crisis plus they also learned they could be suppliers for each other which would also retain local businesses and jobs.  As far as the furniture company, this community effort identified new owners for the company.  People from the town purchased the furniture company.  The company is still producing furniture today and local jobs have been retained!

Again, the situation described above doesn’t happen very often but the emphasis is on trying with the same fervor as the mayor and community members had.   When the Great Recession occurred, economic development tools to create jobs were at the forefront.  There was a strong effort to use any available resource, including labor-management committees.  But as the unemployment rate has fallen, that strong effort has eroded, disappeared or relies on the encouragement of using other sometimes ineffective tools.  Community officials are not the only ones who lack vigor to address situations such as Erie.  It’s also imperative for labor and management to be out there forming local committees before a crisis hits or fighting for jobs or businesses for their communities.  Maybe people are tired.  Maybe it’s complacency.  Maybe it’s politics.  But whatever it is, it’s time to get started before it’s too late!

About CALMC Blog

Columbus Area Labor-Management Committee is a not-for-profit organization dedicated to involving employers and employees to preserve jobs, resolve workplace issues, and promote labor-management cooperation. Visit our website at
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