Rethinking Unions V: AFL-CIOx

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First there was TEDx, the low cost/no cost to the original TED initiative to spread the TED message around the world in local affiliated events. Now there is MITx, an initiative to create free/low cost classes with an MIT affiliation but no degree. So why isn’t there AFL-CIOx? There is no great leap necessary to figure this out. Fire up a web site and provide tools for all workers to improve their position. AFL-CIOx could provide templates on how to lobby their local governments to diversify local economies and cater to entrepreneurs so the increase in businesses operating locally would improve the chance that different employers would compete for local workers. Employers bidding up salaries in order to compete is how non-union workers get salary increases and it’s a successful strategy. It used to be that union workers earned more than non-union. That is no longer true.

And they could provide “plus” services that would carry a fee that you could take or leave. Hat sales alone would probably cover most of the electricity bill. And yes, I’d buy one. I’d also use the site as I assume a lot of people who would viscerally reject joining a union, ever. Google will index it and people will use compelling content, giving unions a 2nd chance at a large part of the population that have long written them off as irrelevant and outdated.

So where is that site? Where is the effort to improve the position of all American workers by providing a 21st century education on how to be a smart, savvy worker?

6 thoughts on “Rethinking Unions V: AFL-CIOx”

  1. 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 get credit for raising the wages of their members. This part is seen, and the unionized employees are grateful. The unseen effect is to limit competition from other workers who then have lower prospects. Unions are a form of worker monopoly, exluding some workers to benefit more privileged workers.

  2. Andrew_M_Garland – I am not so interested in present structures as in encouraging the retooling of unions to something actually useful to a large number of workers. We get so caught up in the past that we forget that unions have brand value if nothing else (and there is value beyond that in their education programs) and that this value (like anything of economic value) shouldn’t be trashed lightly. This approach would cost unions very little but would buy goodwill, might actually make them some money, and would help a lot of workers out.

    If you would actually address my post’s points, I’d appreciate it. That’s a lot harder to cut and paste comment on.

  3. I think the short answer is that union management wouldn’t benefit from your plan. To the extent the labor mkt is competitive there is less rent-seeking opportunity for them, even if they somehow contribute to an overall rise in wages. In a competitive environment most if not all of the gains from boosting business would be split between workers and businesses. The big money for union managements comes from being able to force dues from workers, which they can only do if the govt gives them the authority to restrict entry into labor mkts. That is difficult to reconcile with promoting business overall.

    What you have in mind sounds like the AARP. The difference is that the AARP is a service business pretending to be a non-profit, while the unions are rent-seeking rackets pretending to be service businesses. To transform the unions into actual service businesses sounds like a difficult project.

  4. Would this also mean that as a major health care payer GM should direct its R&D expenditures to increasing the efficiency of the health care industry?

  5. Jonathan – Labor unions are tax exempt organizations under the IRS code, 501(c)5 is the designation for them, along with county fairs and flower societies. I’m not entirely sure what AARP’s tax exemption comes under. The activities I’m describing fall well within the IRS’ description of what a 501(c)5 labor union should be doing. I actually tend to agree that in practice most unions would not be interested in doing this. It is vitally important that unions be publicly given the opportunity to step up to the plate and that they publicly turn this down of their own free will. Then when they get their clock cleaned by organizations willing to do this sort of thing, they’ve got nowhere to hide.

    And if they do take up the challenge, great! that’s one more organization that can renew itself for the 21st century without the waste of bankruptcy. That’s a superior solution.

    Mrs. Davis – If GM were organized to provide healthcare instead of cars and took a special tax exemption based on their ability to provide healthcare then sure they should R&D healthcare, maybe even innovative forms like telemedicine. The labor unions are organizations that operate under the charitable strictures of the statute laid out in 501(c)5 and related publications. They are dying on the vine by and large. They need to renew themselves in doing the activities the IRS expects to see when a group gets the 501(c)5 tax exemption. “To show that your organization has the purpose of a labor organization, you should include in the articles of organization or accompanying statements (submitted with your exemption application) information establishing that the organization is organized to better the conditions of workers, improve the grade of their products, and develop a higher degree of efficiency in their respective occupations. In addition, no net earnings of the organization can inure to the benefit of any member.”

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