UAW Strike at GM

[madurobob]

How is it that we have a Business sub-forum and no thread on unions (or did I miss it)?

So, here goes. The title is reference to the nationwide strike started yesterday out of the failed negotiations between the UAW and General Motors. But, I expect this to become a general discussion on labor unions.

Are unions still relevant? There was a time when unions were an absolute necessity. Workers in some industries were little more than slaves, they worked in squalid and unreasonably dangerous conditions and the government did nothing to help. In fact, IIRC, the only time the US military has (intentionally) dropped bombs on civilians in the US was during a coal miners strike in West Virginia in the 20's. Unions gave the workers negotiating power to force their employers to pay reasonable wages and make the jobs reasonably safe. Unions also gave their laborers a voice with the government.

Over the past several decades the US and other industrialized nations have enacted laws regulating work conditions and reasonable pay to the point that unions may have very little more to offer. In addition, companies can offshore manufacturing. So struggles with unions at home may simply help to push more jobs overseas. In the 50's a nationwide strike against General Motors would have been a national crisis. Today US auto manufacturers are multi-national and employ far fewer US union workers. A US strike is more of an annoyance than anything else for GM. GM stock is not suffering any major price crisis yet.

In fact, sales are down YtY and inventories are up at GM. So, this is probably a good time to stop production and draw down inventory. Surely the UAW knows this.

So, why is the UAW striking? I think its because union leadership is seeing the union as increasingly irrelevant and they feel a need to act tough to shore up support among members. The UAW of the 50's, despite its excesses, was an overall value-add for the average union laborer. Today, I think its about neutral and there will come a point where the UAW will be a liability.

So, what do you think? Should the UAW be striking?

[Francesca R]

No idea on the UAW.

Unions tend to work best (in the interest of their members) if joining them is compulsory. This is because of the free-rider problem.

Companies tend to work best (in the interest of shareholders) if joining unions is illegal, because it disallows the incentive to organise for collective action—something that can significantly increase labour's bargaining power.

Society can be served at either extreme, but in different ways.

I have long expected unions with voluntary membership to wither on the vine, though some have remained powerful. The one best known in my city is the RMT (http://en.wikipedia.org/wiki/National_Union_of_Rail%2C_Maritime_and_Transport_W orkers) because of the regularity with which it stops the transport network, and the seemingly very high pay that tube train drivers have negotiated themselves over the years.

[DaChew]

Can I answer yes and no?
I worked in a Detroit auto plant as a contractor for 16 years. You've gone over a lot of territory.
I guess one of your main questions is: are unions still relevant? I think so. For the unskilled worker who is easily replaced, unions provide job security and job safety assurances. You've noted the disregard for individuals that companies had the luxury of holding in decades past that unions helped to solve. It's undeniable that workplace safety did not get to the point it is today without unions. The Ford Rouge facility south of Detroit at one time averaged a worker death every single day. Building cars used to be a very dangerous enterprise.

Along with improvements in safety came greater complexity of product so it requires greater skill among workers to produce what we call today a quality product. That's placed greater value on the individual. Replacement of that person is now a more expensive proposition for the company.

So, over the decades, as workplace safety has improved, the union has negotiated greater and greater benefits packages as well. So much so that you'll recall the HillaryCare proposal version 1 back in 94' was originally supported by the union and then rejected when they realized that they would be taking severe cuts (or taxes) in their already negotiated benefits. This led to the ironic situation of the Big Three supporting the proposal and the unions opposed.

Now look at the Toyota plants in the US. Their workforces have voted down the UAW several times. They obviously believe they are better off without paying a percentage of their wages for representation. Are they any less safe? They don't make as much and the workplace rules are written by Toyota. So, what is their motivation for not joining the UAW?

For GM the strike will not hurt anymore than their losses over the last decade. While their marketshare and profits are expanding around the world, the US is a stagnant market for them at best. I don't think a US strike will hurt them nearly as much as emerging out of a long strike without significant concessions from the UAW. I believe that GMs motivation is pay it now or pay alot over the long run.

I think GM workers need the union currently because of GM's huge over capacity. Without the negotiated retention rules, a lot of high seniority folks in US plants would lose their jobs. In any US plant, 20 years seniority doesn't really buy you much as far as what job you can retain or bump in to.

The UAW is between a rock and a hard place. They know they have to make concessions. I think that UAW leadership knows what kind of concessions they are going to have to make and they also know that the rank and file are going to be very unhappy with them if they make those concessions without appearing to look like they're fighting fiercely. Hence, a strike, the biggest weapon in their arsenal. So, in that sense I think you're right. The UAW leadership needs to be seen as acting tough by the membership. They also need to make the membership prepare to see their benefits, especially their healthcare, cut severely. Being out on strike with only the $200 strike pay per week will help.

[Segnosaur]

No idea on the UAW.

Unions tend to work best (in the interest of their members) if joining them is compulsory. This is because of the free-rider problem.

Actually, I'd want to modifiy that statement a little...

Unions work best (in the interest of their average to worse members if joining them is compulsory. However, in many cases, there are people who are at the 'top' of their field, who could probably earn a higher salary if they were able to negotiate their own salary without following the pay scales/rules of whatever union contract exists.

I used to work for the federal government of Canada in the I.T. field. We were covered under a union. (Technically, I wasn't a member of the union, and I had no interest in getting a union membership, but we still had union dues deducted and we still had our salaries determined through collective bargaining.) I was one of the more productive people there, and if it weren't for the unions I might have been able to get a higher salary. Unfortunately, because of the 'rules', my boss wasn't able to have me paid as well as I could have, and eventually left for a higher paying job elsewhere (earning more money, I might add.)

On a more general note:

Frankly, unions are something that makes activities that are illegal elsewhere totally legal... price fixing. In any other situation, if several companies/vendors/stores were caught working together to set prices, it would be considered collusion and would be illegal. Yet with unions, you have a group of suppliers getting together to fix prices of their labour (all done legally).

Unions are of little or no benefit to society today... in addition to elevating the mediocre at the benefit of the better producing (as I pointed out above), they do the following:
- They reduce the flexibility of companies to deal with changing business conditions (possibly contributing to job losses)
- They drive up the cost of completed products, making them less affordable (especially to minimum wage earners, etc.) Granted, labor is only one part that goes into the price of a product, but it is important
- Increased labor costs can also reduce profits. Now, you may think this is a good thing (after all, corporations are big evil entities, are they not?) However, many people (even those in the lower and middle classes, not just the 'rich') use stocks as part of their retirement plans. The union that tries to help its workers may end up helping to keep others from retiring early

[madurobob]

I have long expected unions with voluntary membership to wither on the vine, though some have remained powerful. The one best known in my city is the RMT (http://en.wikipedia.org/wiki/National_Union_of_Rail%2C_Maritime_and_Transport_W orkers) because of the regularity with which it stops the transport network, and the seemingly very high pay that tube train drivers have negotiated themselves over the years.
The rail workers union is a bit different. Their product has no competition - or the competition is different enough (car, bicycle, etc..) that it almost doesn't count. Also, customers absolutely rely on the "product" being produced on a daily basis. So, a strike gets everyone's attention immediately and there is pressure for a quick resolution.

GM's products are different. There is heavy competition with similar products. So if GM's isn't available, there are plenty of viable substitutes. Interestingly, many of the competitor products are higher quality. I'm not sure wheer the blame rests for that - management or labor. I suspect both, but weighted more to management.

Your statement about "the regularity with which it stops the transport network" is also a key point. I think some labor union contracts are designed to drive this sort of brinksmanship as each side feels it can gain an advantage in public perception if they refuse to concede a point and force a strike. In the auto industry its no big deal. But in transportation it can have a significant impact on society in general. Do you think this is a good thing? Is it OK, for instance, for Air Traffic Controllers to go on strike?

[DaChew]

No idea on the UAW.

Unions tend to work best (in the interest of their members) if joining them is compulsory. This is because of the free-rider problem.

Companies tend to work best (in the interest of shareholders) if joining unions is illegal, because it disallows the incentive to organise for collective action—something that can significantly increase labour's bargaining power.

Society can be served at either extreme, but in different ways.

I have long expected unions with voluntary membership to wither on the vine, though some have remained powerful. The one best known in my city is the RMT (http://en.wikipedia.org/wiki/National_Union_of_Rail%2C_Maritime_and_Transport_W orkers) because of the regularity with which it stops the transport network, and the seemingly very high pay that tube train drivers have negotiated themselves over the years.


That also brings in the distinction between private and public sector unions. I believe that public sector unions are going to be around for a lot longer than private sector unions. A strike by a public sector union isn't going to drive any government out of business like it can a private enterprise. Government revenues are not effected by a strike by one of their unions - taxes still get paid.

[Segnosaur]

It's undeniable that workplace safety did not get to the point it is today without unions.

Actually, I don't think there is any hard proof that unions were absolutely necessary in order to get better workplace safety. While unions may have been pushing for safer conditions, you also had:
- A government that would have been subject to political pressure to keep its voters from dying. (After all, look at the number of safety regulations in the building code; those weren't necessarily done at the request of unions, but done by the government to prevent deaths.)
- The labor pool also plays a part. When the economy is strong and there is a demand for workers (as there often is), companies may want to make a safer working environment as part of the attraction to new workers. (Look at Europe in the middle ages; the Plague ended up causing a labor shortage and lead to an improvement in worker conditions, all without the involvement of unions.)


Along with improvements in safety came greater complexity of product so it requires greater skill among workers to produce what we call today a quality product. That's placed greater value on the individual. Replacement of that person is now a more expensive proposition for the company.

It may also make companies less likely to hire new workers in the future... after all, why risk hiring someone if you're not 100% sure you'll need them in 2 years, knowing you'll be stuck with them for the rest of their lives?

Of course, this is assuming the company doesn't just start shipping its manufacturing jobs overseas to begin with.

[madurobob]

Can I answer yes and no?
Yup - I often do.

Now look at the Toyota plants in the US. Their workforces have voted down the UAW several times. They obviously believe they are better off without paying a percentage of their wages for representation. Are they any less safe? They don't make as much and the workplace rules are written by Toyota. So, what is their motivation for not joining the UAW?
Exactly. They may be paid less, but they apparently feel this is more than offset by the union dues and restrictions collective bargaining imposses.

I think GM workers need the union currently because of GM's huge over capacity. Without the negotiated retention rules, a lot of high seniority folks in US plants would lose their jobs. In any US plant, 20 years seniority doesn't really buy you much as far as what job you can retain or bump in to.

I think you are right.. but is it right? Should a company have to carry a lot of "dead weight" (over capacity) to protect workers? I find it interesting that in Japan there is very strong loyalty running both ways between management and labor and thus no need for a union. No general layoffs, either, but that may simply be because of regular growth rather than contraction.

[Fnord]

Just Say NO!

http://forums.randi.org/imagehosting/1265246f922b467c81.jpg (http://forums.randi.org/vbimghost.php?do=displayimg&imgid=8515)

Any Questions?

[madurobob]

Umm.. ok.

Well, before we get too deep into "all unions are all evil" how about this:

Over the past decade there have been a few large companies with pension plan problems. They either change the calculations and claim it is way over funded and raid the fund for cash, or they "correct" the calculations and claim they cannot fund it without going bankrupt. This is then used to goad the employees into accepting lower benefits without putting up a fight.

I don't think this has happened yet with a union (has it?). So, having the union then prevents the company from legally offloading its pension risks to society in general. In this regard, I think the union may play a very positive role. One that could be covered more efficiently with proper legislation, but not as of yet.

[DaChew]

Actually, I don't think there is any hard proof that unions were absolutely necessary in order to get better workplace safety. While unions may have been pushing for safer conditions, you also had:
- A government that would have been subject to political pressure to keep its voters from dying. (After all, look at the number of safety regulations in the building code; those weren't necessarily done at the request of unions, but done by the government to prevent deaths.)
- The labor pool also plays a part. When the economy is strong and there is a demand for workers (as there often is), companies may want to make a safer working environment as part of the attraction to new workers. (Look at Europe in the middle ages; the Plague ended up causing a labor shortage and lead to an improvement in worker conditions, all without the involvement of unions.)

Necessary? No, I suppose not except that OSHA was not created until 1970 while the unions have been around a lot longer. I know from personal experience that safety standards in UAW represented plants have long been more stringent than those in manufacturing facilities that simply meet OSHA requirements.


It may also make companies less likely to hire new workers in the future... after all, why risk hiring someone if you're not 100% sure you'll need them in 2 years, knowing you'll be stuck with them for the rest of their lives?

Of course, this is assuming the company doesn't just start shipping its manufacturing jobs overseas to begin with.

I agree. The calculations that a company has to do in hiring people and/or moving work is greater these days. The cost is higher but if the complexity is greater it may make more sense to stay and pay more. That's a calculation the union needs to consider as well prior to going into negotiations. It used to be automation of jobs leading to fewer workers now, in addition to that, they have the possibility of offshoring the work to contend with.

[Segnosaur]

Over the past decade there have been a few large companies with pension plan problems. They either change the calculations and claim it is way over funded and raid the fund for cash, or they "correct" the calculations and claim they cannot fund it without going bankrupt. This is then used to goad the employees into accepting lower benefits without putting up a fight.

First of all, why exactly are you assuming the employer in this case is wrong? I am aware of a few cases like that, but I'm not an accountant so I can't really say who is to blame. But it IS quite possible that the costs of certain benefits HAVE become more than a company can handle. (Yes, there are companies that are dishonest, but there are also companies that DO struggle to get by.)

And if a company has put certain benefits into a written contract, they're bound by law to honor that contract. If they haven't put exact details in, then its up to the employees to decide whether the new benefits package is fair, or whether they have the skills to command better salary/benefits elsewhere.

[DaChew]

Exactly. They may be paid less, but they apparently feel this is more than offset by the union dues and restrictions collective bargaining imposses.
As you point out below, it's Toyota's culture (and good business sense) that keeps the UAW at bay. They provide very good jobs at premium wages that allows them just enough advantage competitively in the marketplace to continue to grow. It's a very long term strategy (and it may not be strategy. It may be just the way they do things - culture) that is clearly working well for them.

I think you are right.. but is it right? Should a company have to carry a lot of "dead weight" (over capacity) to protect workers?
In a word: yes. Simply put: They made their bed...
I don't fault the UAW for negotiating the best they could for whatever GM would give them. At the time all of these phenominal benefits were being agreed to, GM's strategy was to simply get the cars built and get them sold. They didn't want any part of a strike. Their calculations told them that the best way forward was to move product. That's what they thought would keep them competitive, keep the shareholders happy and keep them profitable. And they were right. For a while. Now, not so much.

I find it interesting that in Japan there is very strong loyalty running both ways between management and labor and thus no need for a union. No general layoffs, either, but that may simply be because of regular growth rather than contraction.

Yes that culture is well suited to the industry. On the flip side though, a job in a Japanese auto plant is very difficult to get. They are premium jobs.

[Segnosaur]

Necessary? No, I suppose not except that OSHA was not created until 1970 while the unions have been around a lot longer. I know from personal experience that safety standards in UAW represented plants have long been more stringent than those in manufacturing facilities that simply meet OSHA requirements.

Forgive me, I'm not from the U.S. so I'm not familiar with all the details of the OSHA.. but I just did a little search on it and have a few comments:
- Yes, the OSHA has only been around since 1970, but that doesn't mean that there weren't other laws governing workplace conditions, nor does it mean other factors I mentioned (offering safer workplace conditions as an incentive to workers, etc.) weren't also in effect
- It looks like when OSHA came into effect, companies had to improve their working conditions further. This implies that unions alone were not successful in bringing all required safety reforms in place.

[DaChew]

Forgive me, I'm not from the U.S. so I'm not familiar with all the details of the OSHA.. but I just did a little search on it and have a few comments:
- Yes, the OSHA has only been around since 1970, but that doesn't mean that there weren't other laws governing workplace conditions, nor does it mean other factors I mentioned (offering safer workplace conditions as an incentive to workers, etc.) weren't also in effect
That's correct. My point is that unions were negotiating with companies to improve safety long before our government applied itself in a focused fashion. Look up the Triangle Shirtwaste fire of 1911. There became a very stark difference in workplace safety between union represented companies and non union.

- It looks like when OSHA came into effect, companies had to improve their working conditions further. This implies that unions alone were not successful in bringing all required safety reforms in place.
That's correct as well. The greatest changes in safety came among those companies who were either not unionized or who had weak unions. Textiles and coal miners come to mind mostly. Plus, many people had viewed meddling in the workplace relationship between company and worker as not a legitimate role of government.

The government has definitely improved workplace safety, that's undeniable as well but it has unfortunately been primarily in response to public pressure resulting from tragedy. Unions have been able to improve workplace safety through pressure from the rank and file who can see tragedies coming before they happen.

[madurobob]

First of all, why exactly are you assuming the employer in this case is wrong? I am aware of a few cases like that, but I'm not an accountant so I can't really say who is to blame. But it IS quite possible that the costs of certain benefits HAVE become more than a company can handle. (Yes, there are companies that are dishonest, but there are also companies that DO struggle to get by.)
Hell, I'm a CPA and I cannot say who is to blame. But, I can say that regardless of where blame lies, the result is an offloading of retirement risk to society in general. If a company scales back its pension plan employees have to look elsewhere for retirement. That "elsewhere" is going to include, in the US, taxpayer funded Social Security (they hope).

I've watched this happen at a few US companies. They don't want to fund their "defined benefit"plans, so they change them to a "defined contribution" plan that is more affordable from an annual cash flow basis. Most employees have no say in the matter. IBM recently won a lawsuit for just this.

[balrog666]

From my observations, unions exist to enrich the union managers and protect the jobs of mediocre workers. Their time is long past.

With respect to defined benefits or pension plans, those are withering away in favor of 401K's and the like, i.e., known costs without future liability look so much better on one's balance sheet.

As for GM, they have to bite the bullet some time to make up for past mistakes.
They may have $30 billion in the bank, but they have more than $200 billion in liabilities. If they can't shed the UAW monster, they're toast. If the UAW doesn't settle, GM will eventually go with only non-UAW plants and overseas operations anyway.

Or they will go with the biggest bankruptcy in US history and drop those union obligations, pension plans, and retiree medical benefits like a duck sheds water.

[Fnord]

From my observations, unions exist to enrich the union managers and protect the jobs of mediocre workers. Their time is long past.

With respect to defined benefits or pension plans, those are withering away in favor of 401K's and the like, i.e., known costs without future liability look so much better on one's balance sheet.

As for GM, they have to bite the bullet some time to make up for past mistakes.
They may have $30 billion in the bank, but they have more than $200 billion in liabilities. If they can't shed the UAW monster, they're toast. If the UAW doesn't settle, GM will eventually go with only non-UAW plants and overseas operations anyway.

Or they will go with the biggest bankruptcy in US history and drop those union obligations, pension plans, and retiree medical benefits like a duck sheds water.

HEAR! HEAR!

[DaChew]

If they can't shed the UAW monster, they're toast. If the UAW doesn't settle, GM will eventually go with only non-UAW plants and overseas operations anyway.

Or they will go with the biggest bankruptcy in US history and drop those union obligations, pension plans, and retiree medical benefits like a duck sheds water.

I see the UAW's future as a transformation to a workforce agency. They will contract with manufacturers to provide auto line technicians. They will handle all of the personnel admin. - Pay, benefits, hiring etc. The companies will provide a per person hourly rate to the UAW. That's it. US manufacturers get to shed 90% of their personnel departments and HR functions along with the administration of health benefits in return for paying one flat rate per person. Only thing left to negotiate is hourly rate.

[balrog666]

I see the UAW's future as a transformation to a workforce agency. They will contract with manufacturers to provide auto line technicians. They will handle all of the personnel admin. - Pay, benefits, hiring etc. The companies will provide a per person hourly rate to the UAW. That's it. US manufacturers get to shed 90% of their personnel departments and HR functions along with the administration of health benefits in return for paying one flat rate per person. Only thing left to negotiate is hourly rate.


Employee outsourcing is a big trend - mainly as a reaction to the ridiculous rates of Unemployment Compensation "Insurance" that get levied on smaller businesses. Not having to file the tax forms or conduct the admin functions is just gravy.

GM is effectively paying $85/hour now for UAW workers, how much will the union want to provide the same functions while becoming the members' new punching bag?

I don't see it working.

[JoeEllison]

This is just another case of a corporation transferring wealth from the workers to the millionaires, and transferring the risk in the opposite direction.

[madurobob]

With respect to defined benefits or pension plans, those are withering away in favor of 401K's and the like, i.e., known costs without future liability look so much better on one's balance sheet.

Kind of my point. The corporation shifts the risk of providing for retirement to the worker and the market in general (via 401k). From a personal standpoint I think its great - I get to manage the money and it is entirely portable. But, from a societal viewpoint it really is a dumping of risk onto society by the corporations.

With regard to unions, my point was that they've not been raiding the pension funds (I don't think) or changing the rules mid game. So, unionized companies may be providing for their union employees retirement far better than their non-union counter parts. Thats the one big benefit I see to unions.

[DaChew]

GM is effectively paying $85/hour now for UAW workers, how much will the union want to provide the same functions while becoming the members' new punching bag?

I don't see it working.

That is how the construction trade unions have worked for some time. They've learned to live within their budget. Your point is correct though. There will be a lot of turbulence in the union over what benefits workers will have because they will be paying for it themselves in lieu of higher wages (they do anyway but there's always been that disconnect). And right now, UAW leadership knows they don't want any part of it because they will be the punching bags especially since, as you pointed out, they are fairly highly paid. I believe that's at least part of why they've tabled taking over the health care from GM.

But I don't see any alternative for the UAW. Other than disolving. Which I just don't see happening.

[balrog666]

Kind of my point. The corporation shifts the risk of providing for retirement to the worker and the market in general (via 401k). From a personal standpoint I think its great - I get to manage the money and it is entirely portable. But, from a societal viewpoint it really is a dumping of risk onto society by the corporations.

With regard to unions, my point was that they've not been raiding the pension funds (I don't think) or changing the rules mid game. So, unionized companies may be providing for their union employees retirement far better than their non-union counter parts. Thats the one big benefit I see to unions.

The US Government has already voluntarily assumed that risk by forming the Pension Benefit Guaranty Corporation, the idiots.

As for union pension funds, ask the mob where they get all those cheap loans that they almost never pay back but that still show up as assets in the pension funds. Mob control of unions and pension funds exists for one simple purpose and it works really, really well - just ask the people who really run the Teamsters.

[balrog666]

This is just another case of a corporation transferring wealth from the workers to the millionaires, and transferring the risk in the opposite direction.

BWAAAAAAAAAAAAAAHAHAHAHA!

Oh, yes, we all know how wealthy those workers are. :rolleyes:

And the risk has already left the barn.




Tell me, are you an actual True-Believer-Communist?

[balrog666]

That is how the construction trade unions have worked for some time. They've learned to live within their budget. Your point is correct though. There will be a lot of turbulence in the union over what benefits workers will have because they will be paying for it themselves in lieu of higher wages (they do anyway but there's always been that disconnect). And right now, UAW leadership knows they don't want any part of it because they will be the punching bags especially since, as you pointed out, they are fairly highly paid. I believe that's at least part of why they've tabled taking over the health care from GM.


Yep. But GM is going to shed that liability one way or the other or they will go out of business. The UAW needs belly up to the bar or they will be dealing with a bankruptcy judge instead and the spinning of the strike as a way of softening up the union members seems to indicate that "everybody" knows that.

But I don't see any alternative for the UAW. Other than disolving. Which I just don't see happening.


Or they could branch out as other unions have. Guess what percentage of the members of the United Steelworkers Union are actually steelworkers now?

[JoeEllison]

BWAAAAAAAAAAAAAAHAHAHAHA!

Oh, yes, we all know how wealthy those workers are. :rolleyes:

And the risk has already left the barn.




Tell me, are you an actual True-Believer-Communist?

Clearly, you don't understand economics. :cool:

[DaChew]

BWAAAAAAAAAAAAAAHAHAHAHA!

Oh, yes, we all know how wealthy those workers are. :rolleyes:



What makes the comment especially amusing to me, is that I do know a number of UAW guys who are millionaires. By this time of the year, any UAW tech support worker with some seniority has already cleared well over $120K. It doesn't take a very diligent savings and investment plan over a 35 year career to end up with a nest egg worth a couple mil.

[DaChew]

Yep. But GM is going to shed that liability one way or the other or they will go out of business. The UAW needs belly up to the bar or they will be dealing with a bankruptcy judge instead and the spinning of the strike as a way of softening up the union members seems to indicate that "everybody" knows that.

Yes. They do not want another, larger Delphi on their hands.

Or they could branch out as other unions have. Guess what percentage of the members of the United Steelworkers Union are actually steelworkers now?

The exact correct answer to your question is - a lot. Remember though that UAW actually stands for: United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) so there are already a number of UAW members not building cars right now.

[Fnord]

I see the UAW's future as a transformation to a workforce agency. They will contract with manufacturers to provide auto line technicians. They will handle all of the personnel admin. - Pay, benefits, hiring etc. The companies will provide a per person hourly rate to the UAW. That's it. US manufacturers get to shed 90% of their personnel departments and HR functions along with the administration of health benefits in return for paying one flat rate per person. Only thing left to negotiate is hourly rate.


The UAW tried this, and continues to try. They've spent the last 20 years or so approaching clerical workers to bring them in under their auspices.

The UAW tried in 1988 to take over the Clerical Technical Union of Michigan State University (http://www.msu.edu/user/ctumsu/ctu1.htm). When the CTU members figured out that the UAW would also take over their pension fund, and determined that it was "an attempted raid from the United Auto Workers," the CTU members almost unanimously voted 'No' on their proposed takeover.

Right after that vote, the UAW quietly withdrew its support of the CTU in its two-week strike against the University (MSU would not implement the results of a classification study that raised the pay levels of over 2/3 of the bargaining unit). The UAW's withdrawal was seen as de facto evidence of their interest in only the millions of dollars in the CTU pension fund.

While the UAW might like to present itself as a "Workforce Agency," they are more interested in the money that such an arrangement might generate, rather than the well-being of its members.

[DaChew]

The UAW tried this, and continues to try. They've spent the last 20 years or so approaching clerical workers to bring them in under their auspices.

The UAW tried in 1988 to take over the Clerical Technical Union of Michigan State University (http://www.msu.edu/user/ctumsu/ctu1.htm). When the CTU members figured out that the UAW would also take over their pension fund, and determined that it was "an attempted raid from the United Auto Workers," the CTU members almost unanimously voted 'No' on their proposed takeover.

Right after that vote, the UAW quietly withdrew its support of the CTU in its two-week strike against the University (MSU would not implement the results of a classification study that raised the pay levels of over 2/3 of the bargaining unit). The UAW's withdrawal was seen as de facto evidence of their interest in only the millions of dollars in the CTU pension fund.

While the UAW might like to present itself as a "Workforce Agency," they are more interested in the money that such an arrangement might generate, rather than the well-being of its members.

Well, if you want UAW support, voting against their representation is probably not the way to go about getting it.
Let me make clear - The UAW and the big three have brought this mess upon themselves and if they are very lucky and a little wise, they'll work something out that allows them both to exist. I really do hope the UAW survives somehow but I won't weep for their demise either. They will have brought it upon themselves.

ETA: I will feel very bad for my current and retired UAW friends if they lose their jobs and/or healthcare as a result.

[Segnosaur]

Hell, I'm a CPA and I cannot say who is to blame. But, I can say that regardless of where blame lies, the result is an offloading of retirement risk to society in general. If a company scales back its pension plan employees have to look elsewhere for retirement. That "elsewhere" is going to include, in the US, taxpayer funded Social Security (they hope).


But if the company was already struggling, and needed to scale back its pension plan in order to remain in business, the alternative would have been for the employees to look elsewhere for retirement benefits anyways when their company goes bankrupt.

[Fnord]

Well, if you want UAW support, voting against their representation is probably not the way to go about getting it.
Let me make clear - The UAW and the big three have brought this mess upon themselves and if they are very lucky and a little wise, they'll work something out that allows them both to exist. I really do hope the UAW survives somehow but I won't weep for their demise either. They will have brought it upon themselves.

ETA: I will feel very bad for my current and retired UAW friends if they lose their jobs and/or healthcare as a result.

I won't weep for the demise of GM or the UAW at all. As you said, they brought it on themselves, let them fix it or not -- it's all the same to me.

[Segnosaur]

This is just another case of a corporation transferring wealth from the workers to the millionaires, and transferring the risk in the opposite direction.

I am solidly middle-class, and not 'rich' by any stretch of the imagination.

I hold (as part of my retirement plan) mutual funds that carry stock in auto manufacturers. So, when the UAW manages to raise wages for their workers, I suffer in several ways... it will cut the amount of profits that are returned to my mutual funds (and thus I will be financially poorer on retirement), and it will increase the cost of any vehicles I choose to buy in the future.

[Fnord]

I am solidly middle-class, and not 'rich' by any stretch of the imagination.

I hold (as part of my retirement plan) mutual funds that carry stock in auto manufacturers. So, when the UAW manages to raise wages for their workers, I suffer in several ways... it will cut the amount of profits that are returned to my mutual funds (and thus I will be financially poorer on retirement), and it will increase the cost of any vehicles I choose to buy in the future.


Not if it's a Toyota... ;)

[balrog666]

The UAW tried this, and continues to try. They've spent the last 20 years or so approaching clerical workers to bring them in under their auspices.

The UAW tried in 1988 to take over the Clerical Technical Union of Michigan State University (http://www.msu.edu/user/ctumsu/ctu1.htm). When the CTU members figured out that the UAW would also take over their pension fund, and determined that it was "an attempted raid from the United Auto Workers," the CTU members almost unanimously voted 'No' on their proposed takeover.

Right after that vote, the UAW quietly withdrew its support of the CTU in its two-week strike against the University (MSU would not implement the results of a classification study that raised the pay levels of over 2/3 of the bargaining unit). The UAW's withdrawal was seen as de facto evidence of their interest in only the millions of dollars in the CTU pension fund.

While the UAW might like to present itself as a "Workforce Agency," they are more interested in the money that such an arrangement might generate, rather than the well-being of its members.


"Follow the money!" ;)

[Segnosaur]

Not if it's a Toyota... ;)

Actually, it might...

Even if Toyota does not use union labor, some of its suppliers might.

In addition, Toyota is in competition with GM and the other unionized automakers. If the cost of GM products is higher than it needs to be (due to unionization), then Toyota may decide it can safely increase the price of its vehicles without loosing market share.

[JoeEllison]

I am solidly middle-class, and not 'rich' by any stretch of the imagination.

I hold (as part of my retirement plan) mutual funds that carry stock in auto manufacturers. So, when the UAW manages to raise wages for their workers, I suffer in several ways... it will cut the amount of profits that are returned to my mutual funds (and thus I will be financially poorer on retirement), and it will increase the cost of any vehicles I choose to buy in the future.

There's no absolute requirement that it do either.

[balrog666]

There's no absolute requirement that it do either.


You sure love those "absolutes", don't ya?




Back to you, are you a Communist? A Socialist? A union member?

[grayman]

The rail workers union is a bit different. Their product has no competition - or the competition is different enough (car, bicycle, etc..) that it almost doesn't count. Also, customers absolutely rely on the "product" being produced on a daily basis. So, a strike gets everyone's attention immediately and there is pressure for a quick resolution...

Maybe the light-rail workers can strike, but not the freight haulers.

[bpesta22]

But if the company was already struggling, and needed to scale back its pension plan in order to remain in business, the alternative would have been for the employees to look elsewhere for retirement benefits anyways when their company goes bankrupt.

the federal government's PBGC has these pensions insured and will have to pay them if GM can't. It won't be 100%, but still that's a lotta money.

I think we'll see the government save GM before it goes under.

[bpesta22]

I think people give unions too little credit. I teach lr in sections of various management courses. The best data show that being in a union results in about 10% better wages and 20-30% better benefits relative to control group / non union firms.

Plus, unions indeed give people job security. Even stupid policies like "we're going to fire you if you even smoke at home" are legal in employment at will settings but would have to be negotiated in a union shop.

Plus, labor law has been fairly well anti union lately-- most people here probably know that the striking UAW workers can be permanently replaced as soon as they decide to strike.

Also, unions seem to insulate corporations from liability as many complaints are handled cheaply through the grievance procedure rather than in a court (so much so that many non-union firms are adopting union-like gp's to resolve their disputes in house / fast and cheaply).

Also, who's to say the auto worker is making too much money. Ask them if they are? Granted in the long run a ripple effect of foreign competition might ruin GM, but would the average worker (here or in the UAW) be more concerned about the long term effects of the union on the company's ability to be competitive or how much money's gonna be in my pay check this week?

It seems to me like worker's engaged in concerted activity to bargain over better wages, hours and working conditions is not inherently evil.

[Francesca R]

It seems to me like worker's engaged in concerted activity to bargain over better wages, hours and working conditions is not inherently evil.It isn't inherently evil. It is anti-competitive, but most economic agents would seek to remove the element of competition from their own endeavours as much as possible.

It is not correct to assume that (for example) a unionised worker seeks to maximise compensation and minimise their own effort, any more than it is correct to assume that a corporation seeks to extract maximum worker-output and minimise wage costs. The value of the ratio (compensation/input) and (output/wage cost) is not as important to either side as is maximising the numerator. Thus, a company wants--above all--the "best" workforce and may be happy to compensate above its competitors, and an employee wants--above all--a high income and may be happy to work harder than her peers.

Mediocre workers gaming the union system are in the same category as mediocre companies attemtping to save money by paying peanuts and withdrawing benefits. A stong bargaining position for either of these groups can be regarded as "not a good thing" from the perspective of their above-mediocre equivalents

[Segnosaur]

when the UAW manages to raise wages for their workers... it will cut the amount of profits that are returned to my mutual funds (and thus I will be financially poorer on retirement), and it will increase the cost of any vehicles I choose to buy in the future.
There's no absolute requirement that it do either.

Do you think the extra money that union workers earn (over and above what they'd earn if they weren't unionized) gets created from thin air? Does the extra money magically appear?

If you increase the costs of making a product, then something has to change... either reduced profit (and lower dividends, including for future retirees like myself) in order to maintain a constant price, or higher prices in order to keep the profits constant. The only other option is to try to reduce costs elsewhere which has likely already been done, since companies have a desire to maximize profits anyways, or for the jobs to be sent to another location where labor is cheaper.

[Segnosaur]

I think people give unions too little credit. I teach lr in sections of various management courses. The best data show that being in a union results in about 10% better wages and 20-30% better benefits relative to control group / non union firms.

Nobody is claiming that people in Unionized jobs don't earn better wages/benefits, or have better job security. The question is whether having those unionized workers earing those wages/benefits is A) morally fair, and B) better for society as a whole.

Heck, people in the Mafia probably earn better wages than non-mafia people; that does not mean that the existence of the mafia is somehow better for society.


Plus, unions indeed give people job security. Even stupid policies like "we're going to fire you if you even smoke at home" are legal in employment at will settings but would have to be negotiated in a union shop.

And if an employee's skills and/or productivity are so great that it is worth employing them (despite the fact that they smoke at home) then the company that does fire them will suffer, and the employee should be able to find employment at a smarter company elsewhere.

Also, who's to say the auto worker is making too much money.

The laws against collusion.

A company may want to offer $10/hour to work on an assembly line. If nobody wants to work for those wages (perhaps because the job is dangerous, or boring) then the company will increase its offering (to lets say $20/hour) until it can get enough people to fill its necessary positions. That's the law of supply and demand.... that's how much money that should be considered a 'fair' wage.

If unions get involved, they may demand $30/hour. That's more than what the market wanted to pay, and its more than the work is worth (from the perspective of the free market.) Unfortunately, because of labor laws, the company may be forced to hire people at that rate because they do not have the option of hiring outside the company.

Put it this way... look at how many people accuse the gas companies of price fixing. Seems like everyone wants that investigated because they don't think people providing something should work together to artificially inflate their prices. So why are we accepting such price fixing from labor unions who are artificially inflating the prices of their labor?

It seems to me like worker's engaged in concerted activity to bargain over better wages, hours and working conditions is not inherently evil.
Hey, I have no problem with workers banding together to bargain over better wages. What I do have a problem with is companies being forced (through labor laws) to hire unionized labor.

If a group of workers felt that they had skills valuable to the company and decided to band together during their negotiations, I'd find that acceptable. However, the company should also have the option to decide whether those workers (as a group) had skills valuable enough to hire them all, or whether they think they can get better productivity (work accomplished per dollar spent) by hiring individuals outside of the union.

[JoeEllison]

Do you think the extra money that union workers earn (over and above what they'd earn if they weren't unionized) gets created from thin air? Does the extra money magically appear?

If you increase the costs of making a product, then something has to change... either reduced profit (and lower dividends, including for future retirees like myself) in order to maintain a constant price, or higher prices in order to keep the profits constant. The only other option is to try to reduce costs elsewhere which has likely already been done, since companies have a desire to maximize profits anyways, or for the jobs to be sent to another location where labor is cheaper.
Somehow, you managed to avoid one glaringly obvious place to save money... you, and everyone else who buys into the whole "free market" nonsense.

[Segnosaur]

Somehow, you managed to avoid one glaringly obvious place to save money... you, and everyone else who buys into the whole "free market" nonsense.

Once again... please explain where you think this magical money will come from.

[JoeEllison]

Once again... please explain where you think this magical money will come from.

There's no magical money. I'm talking about slashing paychecks and bonuses and stock options and retirement packages... for the executives. The executives are to blame for the company's losses, and yet they have benefited while losing money and slashing jobs and benefits.

[Segnosaur]

There's no magical money. I'm talking about slashing paychecks and bonuses and stock options and retirement packages... for the executives. The executives are to blame for the company's losses, and yet they have benefited while losing money and slashing jobs and benefits.

Ah, that old myth... that somehow slashing executive pay will somehow make everything better...

Lets see... according to the American Federation of Labor, the CEO of general motors earned approximately $11million. Sounds like a lot (and hey, I'd have no problem if his compensation were greatly reduced.)

But lets put that into perspective: There are 73,000 UAW employees at GM. Even if the CEO earned nothing, that would only give UAW employees an extra $150 per year. The average wage of a GM employee is $26/hour. That works out to a pay raise of only about 0.4% per year.

Or here's another way to look at it... 73,000 employees earning $26/hour, 7.5 hours per day, 200 days/year comes out to $2.8 billion. (And that doesn't include health care or retirement benefits.) The CEOs compensation is $11million. That works out to 0.4% of the total salary cost.

So, before you go assuming that somehow slashing executive salaries will allow companies like GM to give high union labor while keeping prices low, think again... the numbers aren't in your favor.

http://www.aflcio.org/corporatewatch/paywatch/ceou/database.cfm?tkr=GM&pg=1
http://www.lsj.com/apps/pbcs.dll/article?AID=/20070918/NEWS03/709180311/1001/news

[bpesta22]

The closed shop-- you must be a union member to get hired-- has been illegal since the taft hartley act of 1947.

The only rule today, and this applies only in non-right to work states, is that anyone can be hired, and you don't have to join the union, but to keep your job, you must pay dues.

So, I don't think it's true that any company in america has to hire only unionized workers.

[ZirconBlue]

The closed shop-- you must be a union member to get hired-- has been illegal since the taft hartley act of 1947.

The only rule today, and this applies only in non-right to work states, is that anyone can be hired, and you don't have to join the union, but to keep your job, you must pay dues.

So, I don't think it's true that any company in america has to hire only unionized workers.

So, you have to pay dues, but you don't have to "join"? Ooookay. Why would anyone do that?

[bpesta22]

So, you have to pay dues, but you don't have to "join"? Ooookay. Why would anyone do that?

To keep their job. There's only one way a union can ever get you fired (which if you think about it, is most odd since the U represents the workers, not management). That reason is for not tendering dues.

My employment is covered by a union. I have no right to bargain over wages personally (it technically would be an unfair labor practice for me to ask my boss for a raise!). I don't represent myself, the union does. That said, I'm not a member of the union.

To keep my job, I must pay dues. I don't get to vote on the contract, or be an officer, but I will not be fined by the union if I ever speak out against it, or try to decertify it down the road. Unions have been pretty good lately at suing members who don't pay fines, and securing judgments against them.

Another potential benefit to not joining-- though I don't do it-- is to request to pay only "fair share fees". This would be some amount less than regular union dues (as unions can only charge non-members dues related to $ the union spends on negotiating and organizing, but not political activities).

This arrangement also lets people who are philosophically opposed to unions opt out. The right to refrain is as important as the right to form unions. But, that creates a free-rider problem-- a few non dues paying members would get all the benefits of collective bargaining, paid for by other employee's dues. To avoid the problem, SCOTUS has ruled that in a union shop, if you want to keep your job, you don't have to join the union, but you do have to pay at least fair-share dues.

The Taft-Hartley, though, gives any state the right to be more strict here, and so about half the states have passed right to work laws which remove union security. In a RTW state, the union can't force you to pay dues as a condition of employment. Unions aren't very strong in right to work states...

I think you might be slightly confusing the terms: In a closed shop, you can't even apply for a job unless you are already a member of the union. This is illegal (except in construction).

In a Union/Agency shop, anyone can apply for the job. Once you get hired, you have 30 days to join the union (or at least pay dues) or the union can get you fired. This applies only in non-right to work states though.

[JoeEllison]

Ah, that old myth... that somehow slashing executive pay will somehow make everything better...

Lets see... according to the American Federation of Labor, the CEO of general motors earned approximately $11million. Sounds like a lot (and hey, I'd have no problem if his compensation were greatly reduced.)

Sounds like $11 million too much, considering the fact that the company is struggling. Why is he making double what he made a few years ago? How many years of sort of compensation across the board, that could have been invested into benefits and improvements that would have kept the company competitive?

[Segnosaur]

Sounds like $11 million too much, considering the fact that the company is struggling.

Hey, if you want to argue that some executive salaries are way too high, I'd probably agree with you. (Although the GM executive is far from the worst case I've heard of.)

But your argument was that unions don't necessarily increase costs/decrease profits since they could recoup those losses through executive salary cuts. What I've done is demonstrated that that is not the case since executive salaries (as large as they are) are simply not significant when compared to the wages/benefits paid to the workers of a large company.

So, lets face it... you made a claim (without facts), I provided the facts that showed you were wrong... time for you to either admit your mistake or actually provide facts supporting your claims.

[Segnosaur]

The closed shop-- you must be a union member to get hired-- has been illegal since the taft hartley act of 1947.

The only rule today, and this applies only in non-right to work states, is that anyone can be hired, and you don't have to join the union, but to keep your job, you must pay dues.


I did recognize that you don't have to actually join the union in a lot of places but would still have to pay dues. (I'm in Canada, so the labor laws are a little different.) In fact, in a previous post I pointed out how I was in just such a position; a government job I worked for was covered by a union (and I had to pay dues), but I did not join the union because of my philosophical disagreement.

However, to many people, the fact that they still have to pay union dues does provide more union power than they should have.

Secondly, even though union membership is optional, in practical terms the unions do have the ability to shut down production. So while the company may not be a "closed shop", many places still virtually function like one.

Lastly, are you sure that paying union dues is the only restriction? Any place I've worked that has been a union shop, the employer could not offer alternative wages/benefits to non-union members. (In other words, they had to follow the contract layed out by the union even though some people were not union members.) You yourself said that you have no right to bargain over wages... that seems like a pretty significant restriction. (After all, part of my criticism over unions is that it limits the ability of employers to base pay and benefits on the basis of merit.)

[bpesta22]

Good points Seg-- I dunno anything about labor law outside the US.

The union, when certified, is the exclusive bargaining agent for all employees in the unit (which would include both union and non-union members). So, the union speaks for you, even if you don't join.

But, the union has a duty of fair representation (or risks a potentially costly lawsuit)-- for example, they have to fairly process grievances filed by non-union members.

I agree too that some unions may be strong to enough to influence the whole industry in terms of who gets hired. The UAW might be the best example. I'm pretty sure their contracts with the big 3 now contain clauses like: Ford agrees to buy parts for production only from other union firms.

So, if you're a small company making rear view mirrors for ford, you likely can't risk losing ford as a customer, and you are welcoming union organizers in with open arms.

Since Union membership has declined big time over the last 50 years (from a high of about 35% in the private sector in the 1950s til about 9% today!) union leaders are starting to come around. Many unions now will negotiate pay for performance type deals (whereas in the past, all employees were considered equal and seniority ruled the day). Unions prefer gainsharing type plans where the bonus-- if reached-- is awarded to all the members equally versus, individual level incentive plans that id who is a good worker and who is not. Also, seniority now alone typically might get a worker only to the midpoint of his/her pay grade. If you want to make more than the market wage, you gotta perform.

I didn't join my union because I'm in the department of management, and it makes no sense to me for Management to be in a Union, in any context. Plus, I think our specific union is weak.

I probably would classify myself as pro-union though, because I think most people vastly underestimate the good that unions have done in terms of wages, hours, working conditions, benefits and job security. Employment at will scares the hell outta me!

[DaChew]

Hey, if you want to argue that some executive salaries are way too high, I'd probably agree with you. (Although the GM executive is far from the worst case I've heard of.)

But your argument was that unions don't necessarily increase costs/decrease profits since they could recoup those losses through executive salary cuts. What I've done is demonstrated that that is not the case since executive salaries (as large as they are) are simply not significant when compared to the wages/benefits paid to the workers of a large company.


And it's also important to remember that much of executive pay, this certainly applies to Rick Wagoner, is through the stock option vehicle. There is no outflow of money from the company to the executive unless the stock performs. The base salary for execs is typically far lower than anything their performance bonus plans return.

That really doesn't mean a lot anyway. Back in the 80s when Chrysler melted down, Iaccoca took no salary at all and still made millions.

[Francesca R]

And it's also important to remember that much of executive pay, this certainly applies to Rick Wagoner, is through the stock option vehicle. There is no outflow of money from the company to the executive unless the stock performs. The base salary for execs is typically far lower than anything their performance bonus plans return.Really? I thought it was in the shares themselves (restricted for varying periods so they can't be sold straight away), with a relatively small part coming from options.

If executives are paid in shares, there is a "flow" (a real expense) to the company regardless of whether the share performs.

[Segnosaur]

The union, when certified, is the exclusive bargaining agent for all employees in the unit (which would include both union and non-union members). So, the union speaks for you, even if you don't join.

Don't you think this is a rather significant rule? You claimed earlier that under the Taft-Hartley act the only requirement is that non-union members must continue to pay union dues. But if the employers must legally treat non-union members exactly the same as union members (when it comes to wages/benefits), then the advantage to both the employer and non-unionized employee are greatly reduced.


But, the union has a duty of fair representation (or risks a potentially costly lawsuit)-- for example, they have to fairly process grievances filed by non-union members.

Seems like a rather 'artificial' benefit of unions to me. Is there any guarantee that complaints from non-union members will be treated fairly compared to union members? Or that the involvement of the union won't cause additional overhead when trying to solve problems?


...Many unions now will negotiate pay for performance type deals (whereas in the past, all employees were considered equal and seniority ruled the day). Unions prefer gainsharing type plans where the bonus-- if reached-- is awarded to all the members equally versus, individual level incentive plans that id who is a good worker and who is not. Also, seniority now alone typically might get a worker only to the midpoint of his/her pay grade. If you want to make more than the market wage, you gotta perform.

These ARE beneficial developments, but the questions are:

A) do unions actually support them or are they just putting up with them? (If they don't support those developments, even though they're beneficial, that doesn't exactly give credibility to the union)
B) do the changes go far enough? Granted, tying bonuses/wages to performance is a good start, but does management still have enough flexibility to hire/fire people? Is the lower end of the salary scale low enough?

I probably would classify myself as pro-union though, because I think most people vastly underestimate the good that unions have done in terms of wages, hours, working conditions, benefits and job security.

Again, the idea of 'good the unions have done' has to be questioned... good for who? I'm sure there are plenty of stories of unions successfully fighting for wages/benefits from employers. However, the silent stories you won't here are:

- People who could have purchased product X, but could not because union-negotiated wages put the cost of the product outside their reach, or who could afford the product but end up with less money in their pockets because of it
- People who might have been hired by a company, but were not because the union-negotiated demands were too high for what the company felt they were worth
- People who have the desire to make additional efforts at their job (in the hopes of getting higher wages) but cannot because contracts negotiated with the unions will not reward their efforts (This is something that affected me personally...)

Put it this way... how exactly is having unionized auto workers/government workers/etc. a benefit to me, when I'm not a member of any union (and not even working in a union shop)?

[jimbob]

Firstly, I work at a site where there is a union membership, but I am not a member of that union. In Britain in the 1970's I would say that unions were too strong.

Fnord, Balrog666, et al. would you say that Unions have ever been forces for good?

I would.

I would say that the Tolpuddle Martyrs were right, and were fighting economic oppression.

Even in the US in within the last 100 years, I would say that unions have been beneficial to society.

The operation of counterveilling power is to be seen wih the best clarity in the labour market where it is most fully developed. Because of his comparitive immobility, the individual worker has been highly vulnerable to private economic power. The customer of any particular steel mill, at the turn of the century, could always take himself elsewhere if he felt he was being overcharged. Or he could exercise his soverign privilege of not buying steel at all. The worke had no comp[aritive freedom if he felt he was being underpaid. Normally he could not move and he had to have work. Not often has the power of one man over another been used more callously than in the American labour market after the rise of the large corporation. As late as the early twenties, the steel industry worked a twelve-hour day and seventy-two-hour week with an incredible twenty-four-hour stint every fortnight when the shift changed.


From "American Capitalism The concept of Counterveilling Power" by JK Galbreith (revised edition 1956, pelican imprint 1970 pg 128)

"As late as the early twenties, the steel industry worked a twelve-hour day and seventy-two-hour week with an incredible twenty-four-hour stint every fortnight when the shift changed."

That has to have been pretty unjust, and a social wrong. (And I'd guess that implies that any accidents must have mainly "damaged" workers, but not equipment or downtime).

I'm sorry if I am attacking a strawman, but my reading of some of the posts suggested an attitude that "Unions are wrong", so please correct me if that is not the case.


BTW: the key point of "American Capitalism" is that it was successfull because there was not untrammeled competition, but "oligolpolies" where strong market positions allowed investment, but these were kept from monopolistic power abuses by (more or less effective) counterveilling systems (legislation, competitors, large buyers, etc).

He also mentioned (footnote pg 144) that "the concept of a 'buyers' and a 'seller's' market 'has' [had?] no place in classical formal economics."

I imagine that this has changed since then.

[balrog666]

Yes, I agree that unions had a purpose and accomplished important things in the last 100 years. Furthermore, those achievements have spilled over into the entire economy, resulting in better and safer working conditions for all workers, reduced abuses of workers, and standards that companies must adhere to by custom and law.

But, in the last fifty years, they are nothing but bad for everyone involved, most particularly their membership. With the help of asinine labor laws, they eliminate competition, raise costs, bribe congressmen, abet the mafia, and abuse employers to the point of bankruptcy.

Without their labor-relations monopoly and the paycheck deduction, none of them would survive and, even with those immoral advantages, most of them are barely hanging on.

[jimbob]

I think I agree in part with what you are saying, especially as I don't have knowledge of the US unions (except that the teamsters doesn't have too savoury a reputation).

What prevents companies in the west from abusing their economic power, as in the 1920's? Is it now an appropriate* level of labour laws?


*to be defined and argued over, but in principle...

[balrog666]

I think I agree in part with what you are saying, especially as I don't have knowledge of the US unions (except that the teamsters doesn't have too savoury a reputation).

What prevents companies in the west from abusing their economic power, as in the 1920's? Is it now an appropriate* level of labour laws?


*to be defined and argued over, but in principle...


Seeing the Teamsters on a picket line carrying baseball bats should tell you everything you need to know about them.

I had family and friends in the steelworkers union and have many known more in the UAW.
Some of the more stupid steelworkers really believed they could own the steel industry if they just stayed out on strike a few more years.
But, in general, the only thing most union members hate worse than the union is the toady true believers and crooks who get appointed as the shop stewards.

Other than public employees, unions these days tend to go after unskilled positions including grocery clerks, cashiers, bag boys, dish washers, and maids to control entire workforces in otherwise immune industries. That can't be a good thing for anyone.