LeBron James might improve your pension

Athletes, once exploited by owners, now have very powerful unions. Can other workers learn from their victories?

Published March 11, 2013 7:00PM (EDT)

LeBron James helped drive the discussion as basketball players replaced the head of their union last month.      (Reuters/Chris Keane)
LeBron James helped drive the discussion as basketball players replaced the head of their union last month. (Reuters/Chris Keane)

This is the first story in a new series called Working Ahead, which will examine key issues facing the modern American worker, and how we can use our everyday spending habits to help save and create good jobs. The series is brought to you by the AFL-CIO.

John Montgomery Ward was a pioneering baseball star: In 1880, he became the second pitcher ever to hurl a perfect game. Ward was also a lawyer who was the first to recognize that the reserve clause embedded within each contract bound players to the teams that signed them -- and that gave team owners an enormous, inherent advantage over players that lasted for decades.

"In the enactment of the reserve-rule the clubs were probably influenced by three considerations," wrote Ward in a seminal essay titled "Is the Base-Ball Player a Chattel?" in 1887. "They wished to make the business of base-ball more permanent, they meant to reduce salaries, and they sought to secure a monopoly of the game."

"Chattel" was entirely appropriate because, for much of the 20th century, baseball players and other professional athletes were among the most exploited labor forces in the United States. Team owners dictated artificially low salaries; benefits (pension, medical care and the like) were inadequate. Athletes did not employ agents nor have an organized, certified union to represent their rights, on and off the field.

Non-sports unions, meanwhile, were extremely powerful; some 35 percent of the private work force were union members in the mid-1950s. "Industrial and trade unions made substantial gains after World War II because of the dominance of the U.S. economy throughout the world," said Gary Roberts, professor of law at Indiana University. "Companies could afford to be generous with their employees, avoid work stoppages and still make big profits because they didn't face any competition."

That situation would reverse itself – and fast – beginning in the mid-1960s.

Enter Marvin Miller

Marvin Miller was not the second coming of John Montgomery Ward. He never played baseball professionally because his right shoulder was permanently disabled at birth. But credit for the modern-day success of sports unions begins with Miller (who died late last year).

Miller had worked for the National War Labor Relations Board during World War II, then for the International Association of Machinists and the United Automobile Workers. In 1966, when the 48-year-old Miller took over as head of the Major League Baseball Players Association, he had served as chief economist and assistant to the president of the Steelworkers Union.

Miller recognized that organizing professional athletes was going to be a very different experience. Their careers tended to span only a few years, rather than a lifetime. Many had focused so exclusively on playing sports that they knew little about business matters. Thus, Miller's first action was to change the culture within the locker-room because, as he later wrote, "Players were not only ignorant about unions, they were positively hostile to the idea."

His solution was simple: he listened. He toured the training camps and met with every player. "Marvin educated the players as to the basis upon which they can effectively bargain collectively as a group in order to get an appropriate contract and a fair contract," said Donald Fehr, who succeeded Miller as executive director of the MLBPA and now heads the National Hockey League's players union, in an interview with Salon.

"That required talking to everybody, answering everybody's questions, and making sure that everyone was up to date on the issues. Step two was coming to a widespread consensus as to what the appropriate positions are, what should we be fighting for, and the importance of acting together."

The earliest complaints fielded by Miller were about the terrible pension plan. So, he first negotiated for a decent pension plan. Then, he bargained for a collective bargaining agreement (CBA). Baseball owners did not relinquish control easily, and a series of strikes and lockouts threatened the union's solidarity. The players held fast. Eventually, Miller was able to remove the onerous yolk of the reserve clause within the CBA. The result was free agency -- and unprecedented riches.

The average salary in baseball in 1965 was about $19,000. Twenty years later, it was nearly $370,000. Today, it is $3.2 million. The minimum salary for 2013? About $490,000.

"Obtaining a real pension plan showed the baseball players that they had some power, that they could win concessions [from the owners]," said attorney Jim Quinn, who has represented the player associations of the four major sports. "They built off of that. After the pension plan, obtaining free agency was the biggest accomplishment."

Other sports soon followed baseball's lead. Some form of free agency now exists in the four major professional sports leagues. This has permanently altered the balance of power between team owners and the athletes. Indeed, these players associations are now considered among North America's most successful unions.

Advantage, athletes

The biggest advantage athletes have over "normal" workers is their scarcity and their unique skill set. They are, in essence, the product. "Sports unions are in a very unusual and powerful situation in that you can't replace the workers," said Harold Meyerson, editor at large at American Prospect magazine and an op-ed columnist with the Washington Post. "It's hard to say this about any other group of workers. The only other exceptions might be airline pilots and those in the Hollywood talent guilds – directors, actors, cinematographers."

Athletes have additional leverage in that sports has become such an ingrained part of the culture, from sports-talk radio to blogs. The threat of a shutdown of the NFL in 2011 "created this huge public outcry," said Purdue University North Central chancellor James Dworkin, author of "Owners and Players: Baseball and Collective Bargaining." "That puts pressure on management to treat the unions as an equal bargaining partner and to get the deal done."

The rise of powerful sports unions has coincided with the decline of private-sector unions. Only 6.6 percent of Americans claim union membership within the private sector; overall union membership in the U.S. has dipped to around 11 percent of the labor force. These are historic lows.

"The power of unions began to erode in the 1970s and 1980s because America was facing cheaper labor from Japan and other countries," said Indiana University's Roberts. "(Companies) weren't making the profits they were before and they put more pressure on unions for givebacks. That weakened the position of unions."

These divergent trends beg the questions: What, if anything, can workers in non-sports unions learn from the success of sports unions?

"The economic cycle they're in is very different," Roberts said. "You can't compare an NBA player making millions of dollars with an assembly-line worker at General Motors."

But what non-sports unions can do, according to the experts, is emulate the success of the sports unions whenever possible. "Having strong leadership at the leadership and at the executive director level is important," said attorney Quinn. "The ability to communicate what the membership wants is also important. Those are strengths of the sports unions going back to Marvin Miller."

NHLPA chief Fehr agrees. "We learned the importance of unity and cohesion and how critical it is to make sure your membership understands what you're trying to do and agrees with you," he said.

With the relatively small number of athletes involved in sports unions, he said, "it's possible to meet with everybody, to look them in the eye and to get to know each individual. The ability to do that is inversely proportional to the size of your bargaining unit, so you have to adapt other methods of communication."

Fehr believes that the business of running the union should be left to experienced labor leaders whenever possible. "Running a union is a learned skill that you don't learn doing other things," he said. "You don't learn to try lawsuits by writing newspaper articles, and vice versa. If you can afford it, having professionals in the key administrative positions is worth it."

Future Talk

With the four major professional leagues and their players signed to long-term CBAs, labor peace reigns in sports. But despite their high salaries and excellent benefits, the athletes still face myriad challenges. The NBA went through a lockout in 2011, and the players -- led by stars like Derek Fisher and LeBron James -- recently fired their longtime union chief, Billy Hunter, amid allegations of nepotism. The NHL is coming off its second lockout in less than a decade; the league is currently completing a truncated season. NFL players were threatened with a lockout before the 2011-12 campaign. The controversy over concussions and player safety has not been resolved.

"The last several work stoppages in pro sports have been lockouts – that is, aggressive moves by the owners," said Smith College professor of economics Andrew Zimbalist. "Each time the owners have succeeded in lowering the share of output that goes to the players. They do this is in context of the salary cap, which would be anathema in any other industry. It's not as though these unions are all-powerful."

"It strikes me that, over the last several years, when the labor negotiations were over, it always seemed as though the leagues came out on top," said David Carter, director of the Sports Business Institute at the USC Marshall School of Business. "Tracking the average salaries of the players can be misleading if the revenues coming to the owners are outpacing the salaries the players get."

Professional athletes can never escape the fact that their bodies have a limited shelf-life. The average NFL career lasts around three season; in the NBA it's six years. So, one key leverage tool – to strike – can also be used against them.  "Players are not willing to go on strike, for understandable reasons," said Zimbalist. "The kind of power Marvin Miller was able to express and manifest on the part of the athletes doesn't really exist anymore."

"It's easier to keep the owners together than the players," Carter said.

One bargaining chip that the players retain is the ability to decertify their unions and then sue the owners and the leagues on anti-trust grounds. In other words, the players might want to deliberately blow up their own union if they feel they cannot win through negotiation at the bargaining table.

The owners and the leagues surely fear this maneuver, a twist that would surely tickle the likes of John Montgomery Ward.

By David Davis

David Davis is a writer in Los Angeles.

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