That’s the Way You Debate: Unions

Why in the name of Hoffa are two white-collar thirtysomethings debating about unions?

Matt Rhodes (6′3″, Righty):

Unions distort pricing for labor and thereby violate the laws of supply and demand, compromising employment conditions and entire industries along the way. While union members themselves benefit greatly from their negotiating superiors (and the vast sums of money they lavish upon union-friendly politicians), the companies and communities they touch always lose. See Detroit, Gross Deterioration Thereof.

Unions force companies (and the government) to pay wages that are above market-clearing prices for the labor provided.  This is unsustainable for any company or country in our interconnected global economic system.

According to The Economist, 30% of employees of private firms belonged to unions in 1960, as opposed to 7% today (of course, 40% of government workers belong to unions, and that hasn’t changed much since 1960). This is the market at work, laboriously trudging uphill against the cudgel of dirty, established, wasteful politics. Unions served a purpose in the days of unsafe coal minin’ and robber-barons, but they are now simply outdated and inefficient.

Using Yahoo! Maps, I just discovered that I live exactly 33.4 miles from the Hoover Institute at Stanford. Don’t make me go down there and sign up the wonks to get my back.

Sir, your floor…

Sean Deveney (35 handicap, Lefty):

When I was a kid, my dad, a machinist for GE all his working life, went on strike. At the time, we were redoing our yard, pulling out the picket fence. One night, it was cold, and my dad piled my brother and me into the car, putting a bunch of the wood from the fence in the trunk. We pulled up to the picket line outside the plant, with workers holding signs and shivering around a barrel fire.  My dad flipped open the trunk, held some of the pieces of the fence over his head and shouted, “Look guys! Pickets!” A big cheer rose.

To me, that’s what a union always has meant—workers banded together to help each other get the best deal for their families. The idea is simple and goes back to the Middle Ages and beyond. Individuals have little power to negotiate. Banded together, though, workers can, and historically have, improved their lot.

This is not unlike what corporations do—band together relatively weak individuals to make them stronger and increase profits by pooling their resources. When unions do it on behalf of employees, it is portrayed as communism, and we have wailing about distortions of the labor market. When corporations do it on behalf of shareholders, it is sweet, glorious capitalism. The hypocrisy is astounding.

Detroit is a perfect example. No question, the UAW negotiated favorable contracts with the auto industry, especially when it came to pensions. But what that means is that the unions were good at doing what they were supposed to do—get the best deal for employees. Any good, profit-driven capitalist should appreciate that.

The folks running the auto companies agreed to the terms of those deals in collective bargaining. If the terms were unsustainable, it’s not the fault of the union. It’s the fault of the auto industry officials, who should have had the foresight to see that the terms were unsustainable. But foresight was never one of Detroit’s strengths, and its union dealings were just one reason. American automakers always placed cool over quality, to the dismay of many consumers who would have preferred to buy American. And forget about keeping up with technology. The first American-made hybrid hit the market late in 2004, seven years after Toyota was selling Priuses in Japan.

More generally, American industry has collapsed because we have found ways to foist the making of things—shirts, toys, electronics—onto other countries with much cheaper labor prices than U.S. workers would accept. That has nothing to do with unions. Take away unions, and U.S. workers still could not compete, price-wise, with workers in Haiti or Thailand or most of the countries that make our stuff. That’s a reality of the global economy. The real problem is that, as it was passing new global trade deals, this country did not invest in new technologies (solar and wind power, or ways to overhaul our infrastructure) that could have given our labor market something to do besides Wal-mart and temp jobs.

Anti-union scaremongers don’t like to mention this fact: There were 15.3 million union workers in America in 2009, and more of those (7.9 million) worked in the public sector than in the private sector (7.4 million). In a labor pool of about 123,000,000, a measly 6 percent is unionized and working in non-government jobs. Somehow, we are told, this 6 percent is at fault for all the U.S.’s industrial difficulties. This is like saying the Pittsburgh Pirates stink because the first-base coach is overpaid.

Unions in America are an endangered species. They’ll either have to adapt to reflect our current economy (as the SEIU, for example, is attempting to do) or simply fade away. The world has changed, global labor markets are intertwined, and companies can find dirt-cheap labor elsewhere, leaving industry here crippled. But it’s absurd to make unions the scapegoats for that fact. There was a time when unions were a bunch of employees standing on a cold night in front of a barrel of burning fence pickets, standing on the strike line night after chilly night in hopes of getting fair wages. I’d prefer to remember them that way.

Matt Rhodes (Righty):

Mitch Albom would be proud. Morrie would be appalled.

The union members should be working toward the corporate goal of maximizing profits for the greater good of the corporation and our capitalist society. Capitalism is all about profits because profits can be used to efficiently invest for growth in education, health care, and other beneficial things for humans. Capitalism isn’t perfect, but it’s the best we’ve got. When I think of a better economic system, I’ll let you know.

Sean Deveney (Lefty):

Pardon me for having some skepticism about the perfection of the market and profit motives. I think I read a little bit about where that can lead in the last couple of years. As far as I can tell, sometimes the invisible hand gets caught picking the invisible nose. There should be checks and balances against how far the market is allowed to go in pursuit of profits—and one of those checks and/or balances is some way to protect the rights of the people who do the actual work that lead to those profits. That’s where the union comes in.

Matt Rhodes (Righty):

I appreciate your point on the mix of private and public union members. The dwindling percentage of private unionized workers demonstrates that unions hinder profits, the corporate mandate. You demonstrate that the government is inherently bull-headed and inefficient, which is why taxes should be flat and beer shouldn’t have fruit in it. But that’s another post (or two).

Sadly, unionization of one public position in particular, teachers, fosters crippling degradation of workplace quality, sending ripple effects throughout the entire economy. We need to pay teachers for performance, not seniority as mandated by many collective bargaining agreements, especially when seniority in some states requires only a couple years’ work. If we pay for performance, we can compensate teachers better—give them the cash going to union dues, union leader salaries, and misdirected spending in the public school systems. But that’s also another post…

Sean Deveney (Lefty):

No arguments on the necessity of changes in the education department. Take a good look at Arne Duncan—potentially the most powerful secretary of education we’ve ever had and one who has proven tougher on teachers unions than almost any Sec-of-Ed before him—and see that it is happening now. Under our Socialist president.

Still, the dwindling percentage of private unionized workers does not somehow prove that it is right not to have unions or that corporations who employ union workers can’t make profits. What it proves is that industry in America has died, that we have not come up with high-end products that can be made here by a relatively educated and well-paid workforce. To blame that failure on what has always been a relatively small number of unionized workers is like blaming the saddle when your horse gets stolen. Pass me a Blue Moon, extra oranges.

Matt Rhodes (Righty):

Are not unions as you describe but the very essence of communism? Selfish profiteers stealing from their minions, masquerading behind the veil of the common good? I’m not sure where I’m going with that, but you have to admit, that’s some damn fine grandstanding!

A few years back, UFCW 588 president Jack Loveall made headlines with his $500,000 salary, private jet, and country club membership. I would celebrate him as the quintessential capitalist, if he hadn’t made his millions on the backs of his 1+ million members, all relatively low-paid grocery employees. While this is an outlier example, on average, in 2010, it’s the unions themselves that foster exploitation, not the would-be employers. Union-resistant Whole Foods has double the margins of its unionized competitors, and it plows its handsome profits back into its communities–and its workers’ pockets.

But don’t take my word for it. Trust your brain to the repository of “facts” on this amorphous and vaguely attributed site, http://UnionFacts.com. I’m sure whoever is behind this Internet curtain has absolutely no agenda besides surfacing the truth.

Bottom line, happy workers don’t need unions. The vast majority of workers in the private sector are “happy”. Employers who don’t treat workers well deserve what they get–the unionization of employers that has nearly always sowed the seeds of profit destruction.

The government is just fucked.

Sean Deveney (Lefty):

I don’t know where to begin on this one. Jack Loveall takes $500,000 and there is an uproar. It is far too much, and Loveall is a sleaze. But the double standard here is pretty shocking, and it’s pretty convenient to pick out a guy like Loveall and say he represents everything unions are about. A Contra Costa Times article in 2006 said, “Jack Loveall is not a corporate executive … [he] is just paid like one.” Now if that doesn’t make you spit out your Cheerios as you read the morning paper, I don’t know what will. Show me one corporate executive who would deign to accept a half-mil.

Goldman Sachs set aside $16.2 billion for bonuses, an average of $500,000 per employee, five months after the financial crisis and I’m sure that’s all right because that money was used for the greater good—the greater good being the pursuit of profit.

The whole notion of union bosses exploiting workers is the same kind of scare-mongering, boogeyman-ism that I complained about before. It’s a PR tactic. It’s not real, and, my dear compadre, we should be discussing real issues in this space, not PR tactics. Corporate America likes to use frightening images of union strong-arming to battle against what is a basic right of American workers, the right to unionize. So, go to UnionFacts.com, and what do you see? Ah! A phantasmagorical rendering of a scowling James Hoffa, next to a quote from him that reads, “Since when is the secret ballot a basic tenet of democracy?”

The site is, of course, designed to trash the Employee Free Choice Act, a simple bill that says workers should be allowed to unionize if they want. It is a bill being considered now, in 2010. So how does “UnionFacts.com” argue against the bill? By calling on the son of a ghost. Jimmy Hoffa hasn’t been seen in more than 30 years. If THAT is not a scare tactic, I don’t know what is.

Meet Me in the Middle:

So, with that vigorous and constructive debate we’ve found some commonalities that bridge Left and Right. We can wholeheartedly agree that:

  • Unions get people worked up.
  • People that directly generate revenue for companies and politicians, like investment bankers and union leaders, make good money. Those who sweep marble floors in banks and stock grocery shelves do not make good money.
  • Angry sons of ghosts are scary, and therefore an effective scare tactic. But a bad one.

We may all sleep well tonight, our dashing capitalist crusader on his plush astronomically-high-thread-count Frete sheets, our dowdy union sympathizer on his cot of straw and manure.

Dear readers, that’s the way you debate!

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5 thoughts on “That’s the Way You Debate: Unions

  1. Since our capitalistic society is essentially based on discerning the winners (heirs, kids with access to computers, anyone on Oprah’s Book Club) from the losers (layabouts, idealistic hippies, fat people who collect dolls), I think it only appropriate that this blog follow suit…

    Gotta give this one to the southpaw, Mr. Rhodes.

    (But please do not let my decision preclude employment in your burgeoning multimedia empire. I can be bought! For a can of tuna!)

  2. Only the union of life, Matt. LIFE damn you!

    Now please excuse me while I go kiss a random old person. A RANDOM OLD PERSON damn you!

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