Rethinking Unions

As they currently stand, Unions are dangerous dinosaurs. But that doesn’t mean that worker interests have no need for structures that serve their interest. If we’re serious about believing in liberty, we need to address how to create viable, sustainable, superior worker organizations. They might just end up keeping the “union” label if the brand isn’t irredeemably sullied by its present users.

So what characteristics would this new type of organization have?

Sustainably low cost
Concentrate on proactively improving worker situations
Unabashedly pro-capitalist
Interventionist in secondary education, aligning student production better with worker needs.

Anybody have some other features?

14 thoughts on “Rethinking Unions”

  1. Public Sector Unions, with their alliance of Democrats in the legislature, have almost bankrupted California. No need to go into either the pension liability or current active costs – both numbers are staggering.

    And they almost destroyed Wisconsin – both in their up front costs and hidden costs (in 1 school district alone, the district saved $2 million by switching health car costs to a company other than the union required company in their contract (can you say “kickback”?)

    To wish – or think – that unions will change to some ideal is dreaming IMO.

  2. LibertyAtStake – That’s an interesting idea but hasn’t it been tried to decidedly mixed results so far? I honestly don’t know whether the commingling of capital and labor roles is a net plus or not.

    Anonymous – I do not wish unions to change. I want new entrants into the worker representation market to drive the current, malignant incumbents to the wall and get a better deal for workers while being a force *for* capitalism. It’s a darwinian economic exercise I’m envisioning. Here’s a couple of examples.

    Labor organizations *should* be for employer diversification which would permit a company with good management who treat their workers well to easily poach from bad employers, driving up the bad employers’ costs and tending to drive them out of business in favor of companies who treat their workers decently. They currently are not taking action in this arena, mostly because it is not in the present day union’s interest for an employee to leave a nastily managed firm (that is more likely to be unionized) and move to a firm that is managed by fair bosses (that is much less likely to be unionized).

    Labor organizations *should* be for maximizing jobs available which gives all individual workers increased negotiating power. Instead the unions work to maximize dues coming from high wage union jobs even if the net effect is fewer jobs and fewer people working.

    Labor organizations *should* be funded by user fees for specific services instead of membership dues. If you aren’t doing something for a worker, you should not be a drain on his finances.

  3. The first thing is for the union to realize that the primary interest of the union is to see that the employer survives and prospers. The jobs and pensions it protects are a bet on the survival of the company, but union leaders have tended to act as if that survival and prosperity is a given.

    Secondly, they should realize and act on the truth that they should be in alliance with the shareholders to insure that the management is performing well. Much of the original support for unions came from the arbitrary actions of lower management, often because the primitive management structures of 19th century corporations often resulted in lower managers exploiting their power for their personal benefit rather than that of the company — one very common example is promoting employees not on the basis of excellence but in return for kickbacks or other benefits (e.g., sexual) from the workers they managed. This was one reason why unions were so big on seniority, because it eliminated this kind of favoritism and had at least some relation to competence.

    However, to get any kind of new unionism it would be necessary to repeal the Wagner Act and do away with automatic dues checkoff, making union membership and dues-paying entirely voluntary in the workplace. Unions could bargain because they acted as an employment agency for higher-quality workers (an original function of skilled-trades unions) or otherwise delivered obvious value-added for employees.

  4. @TM Lutas – Just throwing out ideas at a conceptual level here. It just seems to me arrangements that incentivize both sides toward performance and growth in the same direction would be superior to the confrontational zero sum posture Big Labor takes vis-a-vis employers today.

    “Because the Only Good Progressive is a Failed Progressive”

  5. Do Labor Unions Promote the Middle Class?
    03/06/11 – Econlog by David Henderson [edited]
    === ===
    Because unions drive wages above competitive levels, they cause some workers to lose work. Many would have rather worked for a lower wage, but they can’t do so legally.

    The late H. Gregg Lewis was a famous labor economist at the University of Chicago. He found that unions in their heyday, the 1950s thru the early 1960s, caused union wages to be 10 to 15 percent higher and non-union wages to be 3 to 4 percent lower.
    === ===

    Unions are credited with raising the wages of their members. This is the part which is seen, and the unionized employees are grateful. The unseen effect is to limit competition from other workers who then have lower prospects. They are a form of worker monopoly.

  6. The problem with unions is that they are monopolies of the commodity of labor. Monopolies work for a while to the benefit of their members, but eventually they face competition and then they lose. I don’t have the answers, I’m just pointing out the problem. More jobs would help level the balance, but part of the reason there aren’t more jobs is the unions.

  7. Jim, I agree that unions “should be in alliance with the shareholders” — the best way for that to happen is for all employees to be shareholders, and that’s approach taken by the most forward-thinking companies today.

  8. The closest to your “ideal” union would be the Teamsters.

    Paul, you will say, you mean to tell me that an institution with a history of corruption and Mob ties is a pro-Capitalist union? Well, in a word, yes. Labor unions are for the most part an arm of the Democratic Party. The Teamsters, on occasion, have had a good thing to say about a Republican or two, especially when Democrats have gone off the Left-Liberal deep end on social and foreign policy.

    But more important is the contrast of the Teamsters with the railroad Brotherhoods. The Brotherhoods with their 100-mile work day on express passenger trains and firemen on Diesel locomotives had been the posterchild for “featherbedding”, helping to sink the declining railroad industry by insisting on hanging on to jobs at all costs. The impression I have of the Teamsters is that the effort has been on improved pay and benefits of individual drivers but also emphasizing productivity of those drivers to merit such pay. I can’t think of anything in the trucking industry approaching the spread-the-work-around fallacy in railroading, and trucking had grown when railroading had declined.

    Recently, we have had this “breach of civility” of James Hoffa, Jr. pledging his fealty to President Obama and promising to “take out” the Tea Party. For a union leader to talk that way is uncivil and perhaps bordering on incitement to violent acts, but it is really nothing new, and for Mr. Hoffa to talk that way is a “dog bites man” story. The “man bites dog” story missing in all of this is Mr. Hoffa talking that way, of unflinching loyalty to getting an heir to George McGovern reelected after a disasterous first term, when his poppa would be (quietly) aligning himself with the Republican under the circumstances.

    Another “man bites dog” story, in other words, something happening in inversion of the normal social order, were the Reagan Democrats. A lot of Reagan support, and again, based on social conservatism and a vigorous foreign policy in defense of America and our interests and allies, came from working class people, many of them union members, even if their union leadership was vocally anti-Reagan.

    The fictional Archie Bunker was the creation of a very left-liberal Norman Lear, by the way, as a expressing pity of his less-elite fellow Democrats, or are you going to tell me somehow that the Archie Bunker character was a Republican? Archie was drummed out the Democratic Party starting in 1968 and culminating in 1972 for not being sufficiently progressive and sensitive. I think we are working hard on drumming Archie out of the Republican Party with all of this Ayn Rand talk of him having too much pay and benefits.

  9. employees to be shareholders

    I believe Watson tried that at IBM back in the twenties, but had to give it up as the workers preferred cash to investment.

  10. In a very small experiment, I learned that workers prefer the cash. In the late 70s, my partner and I had a very successful surgical practice. We got into the practice of having an elaborate Christmas party for our employees. We would go to an elegant restaurant, have a big dinner and order expensive wine. (No doctor now could afford this). We made a point to invite husbands and boyfriends on the theory that we were kind of demanding bosses. They also got a Christmas bonus of about two weeks income.

    Several years later, my partner became less generous to the employees and reduced the bonus. The office manager came to me and asked if we could end the party instead.

    I always had the best paid employees in the community. The next time the phone rang in the office, it could be for a case that meant a lot of money. They knew it and were compensated accordingly. I used to call my own number instead of the “back line.” They knew when the phone range it was probably me. When you call a doctor’s office and get a voicemail, you know their expectations are low. That’s why doctors used to be conservative and aren’t anymore.

  11. “the best way for that to happen is for all employees to be shareholders, and that’s approach taken by the most forward-thinking companies today”

    Stock option grants have in most companies been cut back considerably in the wake of the FASB ruling requiring option grants to be expensed.

  12. Peter Saint-Andre: You might want to check out how that worked at United Airlines. Hint they wound up in Chapter 11 anyway.

    The current union system is so broken that it must be competely dismantled, and no new unions founded until the old ways are completely forgoten. About 6 generations — about 140 years.

  13. As an employee of AnyCo, how much stock must you own in AnyCo before paying yourself more salary does not make sense?

    As an employee-stockholder, you don’t want AnyCo to go bankrupt, but unions and their members almost never see themselves as doing that.

    Statements by management that “they don’t have the money to raise salaries” are always seen as lies offered to drive a hard wage bargain.

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