Unexpectedly Intriguing!
27 July 2005

Sometimes, when a gambler has had a long losing streak, they will bet an amount equal to the amount they've already lost, hoping that their luck will change and that they will be able to fully regain their losses with just one bet. This kind of betting is often called "doubling down" and it's a very high-risk strategy - one that may restore the gambler's losses, but far more often leads only to ever greater losses.

It's also part of why the AFL-CIO, the largest umbrella of organized labor unions in the U.S., is now fracturing. Back in March 2005, AFL-CIO President John J. Sweeney made a huge bet in setting the strategic direction of the union.

Sweeney was then confronted with growing dissatisfaction among the senior leadership ranks of the AFL-CIO's component unions, who argued that under his leadership, the organization's focus on political issues, rather than focusing upon organizing new members into the union fold, was failing to revitalize the organization. In response, Sweeney took the tack of reinforcing the strategy he already in place - in effect, doubling down his previous bets:

In March, responding to proposals from the insurgents, the AFL-CIO Executive Council approved a plan to cut national unions’ payments to the AFL-CIO by 17 percent, provide another $15 million for organizing and double political expenditures to $45 million a year.

Source: Public Employee Press, July/August 2005: "AFL-CIO: Is It Splitsville?"

That Sweeney's bets to date have been losing ones is indisputable. In 1995, when Sweeney was elected to be President of the AFL-CIO, union members made up 14.9% of the U.S. workforce. Today, labor's percentage of the U.S. workforce is roughly 12.5%, declining steadily over Sweeney's tenure. This fits in with the larger trend toward the decline of union membership in the U.S., which peaked in 1954 with 34.7% of the workforce, and has declined continuously since.

The AFL-CIO also has little to show for its political contributions as well. Even though the union built a substantial warchest to fund it's political activities during the course of the 2004 election, the money failed to swing the U.S. national elections in any meaningful way. As a result, the union finds its ability to affect legislation under consideration essentially unchanged or decreased, particularly since the vast bulk of their contributions went toward the Democratic Party, which failed to achieve national majorities in the elections.

In short, Sweeney's strategy of emphasizing political issues has failed to either arrest or even to significantly slow organized labor's decline - a view shared by the component unions who are now severing their organizational ties with the AFL-CIO. This split will impact the AFL-CIO's bottom line, as the unions divorcing themselves from the body represent nearly 25% of the total union membership in the U.S.

And yet, in the face of rejection by these dissident unions, Sweeney has moved to double down his bets yet again. One wonders how long organized labor will be able to afford his leadership.


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