Monday, July 25, 2005

At Least They're Not on Strike

Following up on his report last week about strife within the AFL-CIO surrounding its annual convention, New York Times reporter Steven Greenhouse writes today that, in addition to following through on the boycott:

Officials from the Service Employees International Union and the International Brotherhood of Teamsters who insisted on anonymity because a formal announcement had not been made said their unions would announce on Monday, the day the convention begins, that they were quitting the federation. The service employees, with 1.8 million members, and the Teamsters, with 1.4 million, are two of the biggest unions in the A.F.L.-C.I.O. They contribute $20 million each year, or about one-sixth of its budget.

In addition, Joe Hansen, the president of the United Food and Commercial Workers, indicated that his union would probably also leave, despite Mr. Sweeney's efforts to persuade them to stay.

"We are certainly willing to listen to anything they want to say," Mr. Hansen said. "Our differences are so fundamental and so principled that I don't think there will be any change in course."

Watching the language in the article, there is one case of calling the defectors "insurgents," but no mention of "hubris" by anyone. The approved talking point by the union leaders seems to be to accuse the defectors of taking a "My way or the highway" approach.

It's hard to predict what will come of this. It seems to be a case of the largest voices in the coalition wanting a voice that is commensurate with their size and financial contributions. That voice seems to be for more activism in union activities. A press release a couple of months ago provides details about what the group specifically requested of the AFL-CIO. These two paragraphs seem to get to the heart of the matter:
Terence M. O’Sullivan, General President of the Laborers’ Union, said: “Our unions believe that there are no easy fixes, but we will not be content with failure. The only solution to the crisis facing working people is to bring millions more workers into our movement, and that requires a single-minded focus on organizing.”

According to John Wilhelm, President of the Hospitality Division of UNITE HERE: “We have shown in our unions that we can win and grow in this climate – and even win big. Now is the time, maybe our last opportunity, to move the entire labor movement into a determined growth program. The current leadership of the AFL-CIO is calling for more of the same, and that won’t cut it. We need a complete change of course.”

As a matter of principle, I am not in favor of coercive monopolies in any aspect of the economy, whether by firms or by workers. So I have no problem with collective bargaining or the right to strike (peacefully), but nor do I think it should be illegal for employers to replace striking workers permanently if they so desire.

The most interesting specific item called for in the press release is this one:

• Actively support mergers that unite workers by industry.
The AFL-CIO should play an active and direct role in working with affiliated unions to facilitate mergers – subject to approval by the affected members — that lead to increased power for workers in the same or complimentary industries. A proactive, industry-based merger policy – whose goal is to build worker bargaining power — will give workers the chance to unite their strength before overwhelming economic and political forces have weakened their unions to the point that it may be too late for mergers to make much difference.

So it is here, if not sooner, that I part company with the defectors. Hard-wired into an economist with libertarian tendencies is the view that the best protection for workers is the presence of a competing firm to whom they could sell their services. Instead, this group feels that the position of "workers" can be enhanced by actively limiting that number, with a presumption that the relative bargaining position of the workers in the single entity is greater than with two separate entities.

That's a shame. There is a real role for unions to play in promoting the well-being of workers that has nothing to do with this sort of rent-seeking behavior. My ideal union is one that helps the workers communicate their grievances and suggestions to management and shareholders and, more importantly, helps the workers invest in more skills to boost their productivity, whether at their current jobs or their next ones.

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Chef said...

I'm all in favor of competition, but it isn't clear to me how competing unions benefit workers. This would be true if unions were like temporary help companies, supplying workers to firms: but that isn't what unions do.

Similarly, it's easy to see why a health care worker would want multiple hospitals competing for her services. But I don't see the benefit for one hospital to be covered by the SEIU, and a hospital across town to be covered by the UAW. Maybe this would provide some check on union corruption or poor representation of workers, but whether unions compete or not, you have to change jobs to change unions, so this doesn't seem like a very powerful check.

On the other hand, it's easy to see lots of benefits of single-union industries. First, they have more bargaining power. You may disdain rent seeking, but if there are rents to be sought, why should firms get them, instead of the workers? Second, industry-wide unions can bargain for industry-wide benefits, such as portable pension and health plans. Indeed unions have done so in industries like trucking and mining. This actually increases competition, since it makes it easier for workers to change jobs.

Robert Schwartz said...

My question is, why do unions have to spend time and money organizing workers. If unions were such a great deal for workers, wouldn't the workers be seeking the unions out?

JG said...

"Hard-wired into an economist with libertarian tendencies is the view that the best protection for workers is the presence of a competing firm to whom they could sell their services."

Why would an economist need libertarian tendencies to have the benefits of competition, and the dangers of the lack thereof, hardwired in? I'd think an economist who didn't wouldn't deserve the name.

The breakaway unions bolting the AFL-CIO say it is pursuing its view of its interest, not their view of their interest -- there's the problem with monopoly right there, but they then want to set up their own. Nobody wants to be under the control of a monopoly, everybody wants to be a monopolist.

Mr. Schwartz is on point. In the 1950s the average industrial worker has a sub-12th grade education and there were no mutual funds, IRAs, self-directed 401(k)s, online brokerages and all the rest to serve them. There was a need for a union to provide services to those workers, and industrial wages are high enough to cover the union's cost of providing them, plus its not-for-profit profit for doing so.

But today an auto assembly line worker must know serious math and statistics to manage quality control, and can dial up Schwab to manage his own investments. So why should workers at a new Toyota or Honda plant in the US join the union, what's in it for them? That's why they don't.

That's the unions' fundamental problem, there is just nowhere near as much need for them among industrial workers as 50 years ago.

The SEIU and Co. want to shift to organizing retail workers, hotel workers, etc. Well, good for them, those workers might benefit from organizing. But those are inherently low-wage, high-turnover jobs. So even if they have success at organizing them comparable to that the UAW had in Detroit (and they won't) they will never have comparable power and influence as a result.