From the March 2003 issue of Entrepreneur

The 1990s are over. And with the collapse of the economic bubble, revelations about horrific corporate governance practices, and the layoffs of thousands of Americans, an institution that some people have long since written off as dead has been revived: the union.

In a recent survey for the AFL-CIO, for the first time in nearly two decades, the number of nonunion American workers willing to join a union has increased. "After seeing so many jobs destroyed in the recession, Americans are looking for job protection," says Jared Bernstein, senior economist at the Economic Policy Institute, a Washington, DC, think tank. (Union workers earn 32 percent more than nonunion workers.)

"In the 1990s, workers had the idea they were free agents and that ties to a union would only slow them down as they moved around," says Fred Feinstein, a labor expert at the University of Maryland. "But that idea has been decimated, and now people just want security."

Drawing on public support, unions have launched major battles over the past year. They've increased organizing efforts in Southern and Western states that had prided themselves on their nonunion work forces. West Coast dockworkers in the International Longshore and Warehouse Union used a port strike to throttle trans-Pacific commerce. And the Major League Baseball Players' Association, perhaps the most visible union in the country, won enormous concessions from management this past summer.

Organized labor leaders have shifted attention from manufacturing and heavy industry toward white-collar and service professions because it's harder to move them overseas. The effort is paying off. According to a study by the Albert Shanker Institute, a labor research organization, white-collar professionals have become "one of the most organized segments of the work force," forming unions or union-like work organizations.

Smaller service and IT companies are vulnerable because they lack financial resources to wait out a strike or shift business overseas. And though President Bush stepped in to halt the West Coast port strike, the government rarely takes an interest in labor actions against smaller companies.

Though small manufacturing firms such as Barry Baird's Avis Construction Co., a 75-person Roanoke, Virginia, business, appear unconcerned about increased unionization. Baird doesn't think much about unions, yet small IT and service companies--especially software firms, cleaning services companies and restaurants--have expressed concern because unions have won a series of victories in these sectors. For example, Boston janitors recently used a month-long strike to win wage increases from the contractors who manage them.

But labor experts say small business shouldn't be overly concerned about unionization. The majority of small firms are not unionized, and while organized labor has become more popular with the public, corporate scandals have also boosted the reputation of small-business leaders, so entrepreneurs are more likely to retain their staff's trust. (In an October survey by polling firm Fabrizio, McLaughlin, and Associates, 68 percent of respondents ranked small business as the most honest institution in the country.)

Instead of panicking, entrepreneurs should concentrate on working with unionized members of their work force on issues of common concern. Lester Trilla, president and CEO of Trilla Steel Drum Corp., a steel drum manufacturer in Chicago, has cooperated with his unionized employees in their joint battle against steel tariffs enacted by the Bush administration; he and his staff traveled together to Washington, DC, to join a march against the tariffs. Trilla says working with his unionized staff on this issue has drawn them closer together and made future rifts much less likely.

Marcus Courtney, president of the Washington Alliance of Technology Workers, a labor organization of high-tech workers in Washington state, agrees. "Unions are not anti-competitive or anti-profit," Courtney says. "[For instance], we run skill trainings for IT workers that save companies the huge cost of upgrading their staff's skills. If management works with unions, both can benefit."