Robert Samuelson offers his analysis:
On paper, unions can deliver three things: higher wages and fringe benefits; greater job security; and better working conditions, including protection against arbitrary or unlawful management practices. In the 1950s and ’60s, unions could win these gains. Now, greater competition has eroded their leverage. Workers weighing the reduced advantages of being unionized must also consider the possibility that high-priced, rigid union labor might one day cost them their jobs. In Chattanooga, this calculus went against the UAW.
Private-sector unions lost their power to protect jobs and raise incomes. Unions were caught in a vise. If they pressed for higher wages and fringe benefits, they risked destroying jobs. Companies might lose sales to lower-cost rivals; or they might move to anti-union states or low-wage countries. Even protecting existing compensation levels became hard because — in extremis — companies might fail. On the other hand, if unions abandoned traditional bargaining goals, they might infuriate rank-and-file members and be accused of “selling out.”
I think, on those two points, he’s right. But there’s a third point he doesn’t mention that I think is just as important. VW chose Chattanooga when it had plenty of opportunities in union states to set up its plant. When it chose Chattanooga, it chose an area whose citizens lived in a state that believed in a “right to work” without interference from unions. It put its plant in an area with that sort of a culture, a culture that is essentially anti-union and without the pervasive union culture you find in union states.
Additionally, as Samuelson points out, companies over the years have learned what sort of practices they must use to keep unions out, especially in the South. Consequently those sorts of business practices have gradually made unions much less necessary and has therefore badly eroded the leverage of unions. Take that eroded leverage to a “right to work” state and the results are likely not something a union would like, as the UAW discovered. When workers do a cost/benefit analysis, unions mostly come out on the negative side of things. And then, of course, there’s Detroit today:
A works council may be worth trying, but whatever its virtues, they were overshadowed by the UAW’s past. Hardly anyone doubts that high labor costs and obsolete work rules contributed mightily to the crackup of the Big Three. VW’s workers recoiled; they kept the status quo. For the UAW, success in one era sowed failure in the next.
Workers saw no advantage to an association with the UAW. It was a smart move on their part, even as they worked for a decidedly union-friendly employer.
File this under "Cry Me A River". Union bigwigs James Hoffa, Joseph Hansen, and Donald "D" Taylor have written a strongly worded note to Harry Reid and Nancy Pelosi begging them to reform the Affordable Care Act—Obamacare—that the unions so strongly supported.
When you and the President sought our support for the Affordable Care Act (ACA), you pledged that if we liked the health plans we have now, we could keep them. Sadly, that promise is under threat. Right now, unless you and the Obama Administration enact an equitable fix, the ACA will shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour work week that is the backbone of the American middle class.
Yes. It will. Many of us said it would. Repeatedly. But the Unions were big-time supporters of it. Now they are whining about the very things we predicted before the law was passed.
We have been strong supporters of the notion that all Americans should have access to quality, affordable health care. We have also been strong supporters of you. In campaign after campaign we have put boots on the ground, gone door-to-door to get out the vote, run phone banks and raised money to secure this vision.
Now this vision has come back to haunt us.
Ah ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha! Woo hoo hoo hoo hoo hoo! Ah, Whew! Huh. Oh. Ho. Ho ho. Ho ho ho ho. Oh ho ho ho ho ho ho ho ho ho ho ho ho ho ho ho ho ho ho ho ho ho ho ho! Ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha!
(Rubbing my thumb against my fingertips.) You know what this is? It’s the world’s smallest string quartet playing "My heart cries for you", you dolts. You poltroons. You microcephalic dunces.
You guys are so stupid, I honestly don’t know why you don’t just fall down more.
On behalf of the millions of working men and women we represent and the families they support, we can no longer stand silent in the face of elements of the Affordable Care Act that will destroy the very health and wellbeing of our members along with millions of other hardworking Americans.
We believe that there are common-sense corrections that can be made within the existing statute that will allow our members to continue to keep their current health plans and benefits just as you and the President pledged.
Good luck with that, Stupids. You wanted Obamacare. You campaigned for it. So, you deserve to get it. Good and hard.
I hope your members thank you for selling them down the river with your support of Obamacare by dragging you naked and screaming out of your offices for a good tar and feathering. I’ve never wanted to see some union thuggery more in my life than I do right now, directed at you.
I now truly understand the German concept of schedenfreude. Indeed, I embrace it.
Well, not really. Not when it comes to things like union membership. It would rather you not have a choice. Because when you do, you do stuff like this:
More than two years after Scott Walker’s showdown with organized labor in Wisconsin, the official numbers for the state’s public sector union membership are in — and they are down. Way down.
According a Labor Department filing made last week, membership at Wisconsin’s American Federation of State, County and Municipal Employees Council 40 — one of AFSCME’s four branches in the state — has gone from the 31,730 it reported in 2011, to 29,777 in 2012, to just 20,488 now. That’s a drop of more than 11,000 — about a third — in just two years. The council represents city and county employees outside of Milwaukee County and child care workers across Wisconsin.
Labor Department filings also show that Wisconsin’s AFSCME Council 48, which represents city and county workers in Milwaukee County, went from 9,043 members in 2011, to 6,046 in 2012, to just 3,498 now.
For the left, “choice” is selective. I.e. they get to decide when you should have a choice. For instance, you should have choice concerning “reproductive health” and the “right” to have someone else pay for it (those paying have no choice you see).
In the case of public service unions in Wisconsin, when finally given a real choice, about a third of those who had been forced to be members have opted out because the value they receive for the money taken isn’t worth it to them. And, now, to keep the rest of their members and because they’re now answerable to them, union bosses are going to have to actually preform.
Oh, wait, that’s good right?
Yup, it is on a downward spiral. When actually given a choice (you know, the thing the left claims everyone should have?), many people opt out:
Government figures released Wednesday showed union membership declined from 11.8 percent to 11.3 percent of the workforce, another blow to a labor movement already stretched thin by battles in Wisconsin, Indiana, Michigan and other states to curb bargaining rights and weaken union clout.
Overall membership fell by about 400,000 workers to 14.4 million, according to the Bureau of Labor Statistics. More than half the loss, about 234,000, came from government workers, including teachers, firefighters and public administrators.
Funny that. We talk about monopolies, but monopolies don’t work when government doesn’t prop them up, and, as pointed out, when government withdraws its sanction and force, when real choice is allowed, people will opt out.
And, of course, it’s not just the government sector where unions are losing members:
But unions also saw losses in the private sector even as the economy created 1.8 million new jobs in 2012. That membership rate fell from 6.9 percent to 6.6 percent, a troubling sign for the future of organized labor, as job growth generally has taken place at nonunion companies.
Unions are an anachronism … they just won’t admit it yet. And, for the next 4 years at least, they’re still going to have political power because of who is in the White House.
But as more and more states become right to work, and the jobless see employers migrating to those states, I think the “market” will take care of itself – if the government will let it.
Well, if you’re wondering, just take a gander at what is happening in Michigan.
The Democrats will be the first to tell you “elections have consequences”, usually followed by ” … and Obama won”. Well the same can be said of state level elections and in the case of MI, the GOP won. In fact, they won everything at the state level, enough to pass “right to work” legislation which essentially says one doesn’t have to join a union to work.
The unions, of course, pitched a tantrum.
And, now that he’s solved all the nation’s problems, balanced the budget, reduced the deficit and has long-term debt on a downward trend, President Obama has weighed in on this situation:
“President Obama has long opposed so-called ‘right to work’ laws and he continues to oppose them now,” said White House spokesman Matt Lehrich. “The president believes our economy is stronger when workers get good wages and good benefits, and he opposes attempts to roll back their rights. Michigan — and its workers’ role in the revival of the US automobile industry -– is a prime example of how unions have helped build a strong middle class and a strong American economy.”
The union’s “role in the revival of the US automobile industry”?!
Is he kidding? It is the unions which essentially helped make two of the big three financially unsustainable. Remember, GM and Chrysler went bankrupt and had to be bailed out. And the federal government screwed with the bankruptcy proceedings and handed a large portion of GM to the union while stiffing bond holders.
That’s the “prime example” in reality.
And the president’s “belief” that our “economy is stronger when workers get good wages and good benefits” doesn’t mean those things only happen with unions. Apparently, in right-to-work states, unions continue to lose out when they try to organize because workers are getting both good wage and benefits and seem happy with their situation. What they don’t see is a benefit to unionizing – i.e. paying dues to a union which will be unlikely to do any better.
Finally, how is allowing someone to choose whether or not to join a union “rolling back rights?”
I knew Obama wouldn’t be able to stay out of state level politics, given his base and their demands. The Democrats have become the party of unions. Private unions are dying off and they’re getting pretty desperate. First WI and now MI? My goodness, can NY and IL be far behind? How dare the GOP give workers the right to chose not to join a union as a prerequisite to working. For a party that brags about being the party of choice, other than one particular choice they champion, the Democrats are pretty much opposed to all others.
Unions are the buggy whip of the latest evolution in labor. Improved communications, a global economy and the realization that businesses have options as well have made unions an anachronism. Reality and economics say labor is a commodity – a factor of production. What labor is increasingly realizing is that the jobs they have can be exported or, given today’s technology, mechanized when costs exceed their worth. Wages are leveling out and in today’s economy, the demands that were once commonly made by unions are no longer economically feasible. But additionally, bad companies can no longer exist in the dark of a communications vacuum and pay and treat their workers poorly without there being repercussions. Competition drives wages and benefits as well or better than unions ever did.
It’s a different world. Unions are 19th century holdovers.
Time they shuffled off into Obsolete-land where they belong.
If you haven’t figured it out yet, it has to do with competition in one area and none in the other.
How so? James Taranto sums it up pretty nicely on the private union side of things:
The trouble for private-sector unions is that the global economy vastly increases the supply of labor, diminishing their bargaining power. If it’s too expensive to run a factory in the U.S., companies can simply move their facilities to other countries.
Or, labor isn’t worth what it once was thanks to globalization. We call that “economic reality”. Back in the good old days for unions, they were getting wonderful pensions, outrageous benefits and $20 bucks an hour for a guy to open and close a blast furnace door. Now they can make and ship steel across the Pacific Ocean and truck it to its destination in the US cheaper than we can make it. Thus the shift of the industry from here.
The bonus for these companies? No labor negotiation hassles, lower wages to pay (comparatively) and the option to move again if the costs again become onerous (and the steel industry has done that a couple of times).
However labor hasn’t yet allowed that lesson to sink in – well, at least unions haven’t.
Taranto points to a very recent example of the point as well as some union members who “get it”:
Last May, after contract negotiations stalled, nearly 800 IAM-represented employees walked off the job at Caterpillar’s hydraulic-parts factory. After a few weeks, more than 100 returned to work, fed up over the lack of progress in the talks and pinched by the union’s $150-a-week strike pay, some workers say.
When an agreement was reached in mid-August, the contract provided less than the one before it: The IAM gave in to an hourly pay freeze for veteran employees, an end to pensions, a doubling of health care premiums and a one-time ratification bonus of $3,100 instead of $5,000 under the previously proposed pact. The terms were almost identical to a Cat contract ratified by the UAW [United Auto Workers] a year earlier.
Doug Oberhelman, chairman and chief executive of the Peoria-based heavy-equipment maker, acknowledges that the givebacks hurt employees. But, in a recent speech in Chicago, he explained that management compared compensation to factory hands across Illinois and around the world and concluded that to be “market competitive,” Caterpillar had to insist on the concessions.
100 of the members of the International Association of Machinists apparently saw the handwriting on the wall, figured their family came first and returned to work.
So much for solidarity.
Hostess is another example of out of touch private sector unions. When the Teamster’s union confronted Hostess over its claims it couldn’t afford their demands and giving into them would cause the company to have to liquidate, the Teamsters examined Hostess’s books and agreed. They backed off. Not the Baker’s union though. Apparently their union chief never bothered to examine the books or negotiate. He just advised his union to strike. The result is well known and, by the way, the Teamsters were livid – not at Hostess, but at the Baker’s union.
Meanwhile a few facts have surfaced about the Baker’s union boss that should make members of unions everywhere recognize at least this guy for what he is:
BCTGM boss Frank Hurt encouraged the strike (knowing it could shut down the company).
As BCTGM membership has fallen 30% since 2000, Hurt’s salary has gone up nearly 45% to over $260,000
The bakery industry union pension fund is less than 50% funded ($10 billion in liabilities), yet bakery union bosses have their own fully-funded (100%) pension plan — funded by members.
Bakery union bosses Hurt and the Sec.-Treasurer both have their kids on union payroll.
We often hear complaints about CEOs who get pay raises while their companies go down the tubes. I wonder if the left is willing to apply the same criticism to a guy who raises his own pay 45% while losing 30% of the membership and funds his own pension 100% while shorting the union member’s fund by over 50%?
Unions also tend to play at stupid games that simply frustrate people trying to run a business and make a profit. In this case it is two different unions fighting about who gets to plug in and unplug refrigerated containers.
A federal judge has been forced to intervene in a dispute between two unions over who is in charge of plugging and unplugging refrigerated shipping containers at the Port of Portland.
Oregon district court judge Michael H. Simon ordered the International Longshore and Warehouse Union (ILWU) to abandon its efforts to snatch the responsibility of manning the outlets from the rival International Brotherhood of Electrical Workers (IBEW).
“[The ruling] simply means that the same people who have been doing the work since 1974 will continue to do it,” said IBEW spokesman Norman Malbin.
The ILWU’s reaction? It said the contract with the electrical workers represented a “lost work opportunity” for members. Of course it was a job they’d never had nor had when they tried to take it over. But these are the sorts of things private unions are reduced too these days. Stealing each other’s jobs.
As we’ve covered here, the great Wal-Mart walkout wasn’t a spontaneous event or even an event demanded by the workers of Wal-Mart. In fact, as mentioned, only 50 of 1.4 million Wal-Mart workers even walked out.
It was a union event using the front group “OUR Wal-Mart (Organization United for Respect at Wal-Mart)”, it was all set up by the United Food and Commercial Worker’s Union. And if flopped, hideously. In fact, the real reason the UFCWU tried to make this happen is because their stores are uncompetitive with Wal-Mart grocery stores. If you can drive up salaries and benefits, you’ll eventually drive up prices. You? They couldn’t care less about you, Mr. and Ms. Consumer.
Those examples all deal with private unions. Competition and the cost of labor are driving the reality of today’s wages. Unions can’t deliver on the big promises anymore. Many have not done a good job of managing their members benefits either. Smart companies make it clear that they will willingly provide good wages and benefits without unions. Tack on tough economic times and the need for a union becomes even less apparent. At one point paying union dues was considered to be a positive thing. Workers got something for the dues that they felt was greater than the cost of the dues. Today? More and more are seeing those same dues as a liability.
Finally, government unions. They remain strong because there is no competition. And, their bosses are in bed with them, negotiating with your money, not theirs. Government’s don’t have to make a profit to stay in business, do they?
But perhaps even their act is wearing a little thin. Take the LAX protests by the SEIU:
So troubled were the airport workers by the Thanksgiving Day protest, the Associated Press reports that according to a press release from former union members, “a majority had signed petitions to leave the union and called upon the SEIU to cancel the demonstration.” One former union member Fred McNeill admitted to CBS LA that it had gotten “personal” for the leadership of the SEIU, “And that’s just not right.”
Another woman, who CBS LA interviewed through her car window at the airport, said she she was a union member (she did not specify which union she belonged to), but even she didn’t agree with the way the union was blocking traffic on one of the busiest travel days of the year.
Unions on both sides have become short-sighted and petulant because their golden age is demonstrably dead. Economic reality and a changing world have dealt them severe blows and instead of looking at ways to shore up their base and maintain their presence, they’re reduced to throwing tantrums and thumbing their noses at the very people they need to suppor their cause.
Government unions can still get away with that. Private unions can’t. And the only reason that difference is made is because competition and economic reality rule one side and monopoly and government protection rule the other.
Jordan Weissmann has a piece in The Atlantic entitled “Who’s Really to Blame for the Wal-Mart Strikes? The American Consumer.”
While I will admit that the demands of the American consumer being partly responsible for the wage scale paid by Wal-Mart, I frankly see no consumer liability in that responsibility. Wal-Mart saw a need, constructed a model and has successfully fulfilled that demand. And last I checked, no one has twisted anyone’s arm or marched them into Wal-Mart and made them take a job.
The American consumer’s role? It is like us saying “you can have open borders or you can have a welfare state, but you can’t have both”. You can demand the lowest prices or you can demand “mom and pop” be saved and pay their workers more (but then you have to commit to voluntarily doing business and paying higher prices) but you can’t have both.
Weissmann is essentially claiming that the consumer is to blame for impending strikes by demanding lower prices. Lower prices mean lower pay and because Wal-Mart isn’t paying a “living wage”, it’s employees are striking. Again it’s a part of the left’s disingenuous”fairness” argument.
But by now, that low-price, low-wage model has become the industry standard among discount retailers, or at least close to it. The median retail worker earns $14.42 an hour, but at big box chains, the pay is significantly lower (the notable exception being Costco, which commendably pays its employees a living wage). Walmart, for instance, says it pays full time sales associates $11.75 an hour on average. But independent analysis peg the figure much lower, closer to $9. According to IBISWorld, that puts it a bit behind companies like Home Depot and Lowes, but ahead of its nearest competitor, Target, which has managed to put a more fashionable face on the same abysmal pay for its workers.
First a “living wage” is different for different people. If husband and wife are both working, the one working at Wal-Mart may be supplementing the higher wage of the other spouse. Who is to say what the Wal-Mart employee earns isn’t sufficient to live quite well on? If it is a teenager living at home, what’s a “living wage” to him or her? What, in fact, the Weissmann’s of the world are claiming is that any wage paid to anyone should be sufficient to “live on” based on whatever arbitrary standard they choose to apply. My reaction? None of your business – everyone goes to work and accepts the wages they do for their particular reasons. If they aren’t satisfied, then they can leave.
That brings us to point two, if you don’t like the pay at Wal-Mart, seek a job at another employer. I doubt that most “big box” companies look at their employees as permanent. Wal-Mart and others are, for many, a stop on the way (for experience) to higher paying jobs. If it’s not, if it is all someone is qualified to do, then that’s their problem, not Wal-Mart’s and not the shopping public’s. My suggestion is to seek out further training or schooling elsewhere. But it isn’t the job of the public to subsidize your wages just because you think you’re worth more than you really are.
Wal-Mart doesn’t exist to pay a “living wage”, whatever that is. It exists to serve it’s customers and turn a profit. It is that profit that allows them to provide what is demanded by their customers and to pay their employees. If wages are too low, workers will likely look to an alternative for employment. Yet, somehow, Wal-Mart remains fairly consistently fully staffed.
Like it or not (and the complainers usually don’t) that’s the model. It works. It provides consumers what they demand.
But that’s not what the fair police want, you see. And that’s where you see this sort of an argument:
There are many reasons why pay in retail is often paltry. Among them, it’s a low-skill industry with high turnover and a lot young workers. But the sector’s utter lack of of union presence certainly plays role. And for that, we can thank both Wal-Mart and Washington. From its earliest days, Wal-Mart has taken fiercely antagonistic stance towards organized labor, keeping its stores union free by using every ounce of leverage Congress has given employers — so much so that, in 2007, Human Rights Watch called the company “‘a case study in what is wrong with U.S. labor laws.”
In essence what Weissmann is arguing is workers should be paid more than their worth in a competitive labor market (low-skilled young workers with little experience). It’s a matter of “social justice” – that nebulous term used to justify intrusion into markets because they “care” (with your money, usually). And their go-to vehicle for achieving this “social justice” and upsetting a business model that favors the consumer is the union. Other than grow fat and demanding, that’s what unions are there to do.
See Hostess and GM for how that usually ends up.
But to his point, there’s a reason Wal-Mart is “fiercely antagonistic” toward unions. That’s because unions would wreck the model they’ve so painstakingly put together over the years, the one which their customers demand. Customers don’t show up there because they love Wal-Mart. They show up because they get more for their hard earned money.
Unionize, demand wage and pension increases and all the other concessions that put GM in the poor house and Hostess out of business and you’ll find one thing to be true – Wal-Mart’s customers will go to Target. Or Kohls or some other “big box” retailer.
But they’re not going to pay higher prices. They like the model. It works for them and their situation. And they will seek out the next best alternative when and if they see prices go up at Wal-Mart.
So, perhaps it is time for those like Weissmann to figure out what Wal-Mart is – it is a store that offers deep discounts on thousands of items that its customers demand. Oh, and by the way, it also has employees who are paid according to that customer driven model. The workers have choices, if they’ve prepared themselves – work at Wal-Mart to gain experience and move on, or go do something else. For those who haven’t prepared themselves for anything else, it isn’t the customer’s job to subsidize their wages just because they believe they should get more even if they haven’t earned it.
But for those who can’t let this go, I have an idea. Each and every Wal-Mart store ought to establish at least one check-out line which is for those who want to pay the highest retail price found for the items they’re going to purchase. Wal-Mart could research that, have the cash register price the items according to that research and at the end the Wal-Mart associate could say to the person, “and you over-paid by $53.00, have a nice day.”
Wal-Mart would then promise to take the difference between their prices and the premium prices and apply it to the pay of all Wal-Mart associates.
How’s that for fair? And people in that line wouldn’t have to feel like hypocrites when they diss Wal-Mart for it’s presumably low pay while they continue to buy at the store.
Of course, that particular line would likely to look like something out of a Halloween display, all covered in cob-webs and the like.
Of course we’re talking about a government union, the SEIU, which plans today, from 11am to 4pm (PST), to put 1,000 protesters on Century Blvd. near LAX to, one assumes, “persuade” harried and pissed off travelers that the SEIU’s cause is just.
So to do that they choose peak time on the busiest travel day of the year to protest a company that decertified them by claiming that safety at the airport has been compromised (because, you know, only union companies have the inside on “safety”), that the company isn’t paying a “living wage” (according to other new reports, the employees of this particular company have gotten wage increases since decertification) and that the employees are being denied health care coverage (the same news reports claim these employees now have a number of health care insurance choices).
Or to put it another way, this is a fairly typical propaganda driven and thuggish union tantrum and they’re planning on screwing over travelers to make whatever point they are trying to make.
Which brings us to a graphic I found interesting. Now granted, in the case of the graphic we’re talking about private unions. But it still make a powerful statement about unions overall:
Of course, given the demise of Hostess, I’d guess that last number is just a touch higher.
So, if you were looking at this graphic and considering what the SEIU planned for today given the fact that it is likely to cause some people to miss flights etc., what would your overall impression of unions be? And how relevant would you consider them in the 21st century?
Amazing, but not atypical of a lot of thinking in this country these days:
The union that brought the 85-year-old baker of Twinkies and Wonder Bread to its knees is holding out hope that a buyer will salvage chunks of the company and send the union’s members back to work, even as Hostess Brands Inc. gears up for a fire sale.
While Hostess has said the shutdown would result in the loss of more than 18,000 jobs and place the fate of more than 30 American brands in jeopardy, union President Frank Hurt said he believed there was “more than a good chance” that a buyer quickly would swoop in to buy the profitable parts of the company and give his union’s members their jobs back.
Give them “their” jobs back?
See, if I was a buyer, the last people I’d hire are those whose inability to think beyond what the union demanded they do that caused a company to liquidate and “their” jobs to go away. Because I’d not want to give them the chance to gum up the works at my company. So I’d ensure that they understood that “their” jobs went with Hostess.
By the way, Frank Hurt isn’t hurting. He’s still got his six-figure job with the union that “their” jobs, since gone, helped pay for.
Said Teamster Luigi Peruzzi, a Hostess driver in Detroit for 25 years:
“I think they [the Baker’s union]made a terrible choice based solely on terrible information from their leadership.”
Not that their “leadership” will suffer for it or anything.
This week, Bruce, Michael, and Dale discuss Gen. Petraeus and Benghazi, Israel, and the Twinkie.
The direct link to the podcast can be found here.
As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2010, they can be accessed through the RSS Archive Feed.