Wednesday, August 10, 2005

Andrew Stern Goes 1 for 2

In an earlier post, I wrote:

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.
That wasn't meant to exclude other good ideas. Writing at the Huffington Post, SEIU President Andrew Stern calls attention to efforts his union (one of those breaking away from the AFL-CIO in the earlier post) has been making to help improve the luxury condo market in South Florida.

Condo workers are finding out that they have a lot in common with condo residents who also get taken for a ride by property management companies like Continental. Fees keep going up, and Continental's parent company makes money by "cross-selling" additional services such as painting, landscaping, and pool cleaning.

Elected public officials, condo residents, and condo workers have been holding public forums and pushing for legislation requiring licensing, fiscal and ethical standards, and full disclosure of contracting relationships.

That’s the new union movement. Giving a voice to the voiceless. Uniting with community groups for everyone’s benefit. And making sure that working people have the tools and training they need to provide a service they can be proud of.
Serving as monitors on behalf of owners against allegedly corrupt practices by management companies is another economically valuable role for unions to play. It would allow the members to earn the above-market wages they would like to be paid. Good for them.

In other union news, Alan Murray writes in the Wall Street Journal that today:
[A]t 34 news conferences in 24 states across the U.S., a group called Wake-Up Wal-Mart will paint Sam Walton's company in black. The group -- started by the United Food and Commercial Workers International Union, and backed by teachers' unions -- will call for a Back-to-School boycott of Wal-Mart stores, charging the Bentonville, Ark., company with paying poverty-level wages, providing skimpy benefits and flouting labor and discrimination laws. (Never mind the fact that it sells a large box of crayons for 25 cents.)
Boycotts that don't involve coercion, libel, or slander are fine in my book. I don't think it will work, but there's nothing wrong with assembling for that purpose. Later in the article, we read:

To run the new effort, the UFCW hired a refugee from Howard Dean's political campaign, Paul Blank, who operates out of cramped offices on Washington's K Street, where the walls are covered with maps and hand-drawn anti-Wal-Mart signs. Meantime, the Service Employees International Union, another break-off union, has established a rival site, Wal-Martwatch, with support from liberal groups including the Sierra Club and Common Cause. "We have no intention of trying to organize Wal-Mart workers," says SEIU President Andrew Stern. "The purpose is to change Wal-Mart's business model -- a business model that rewards shareholders and executives and doesn't reward workers."
Economics ... professor ... meltdown. Wal-Mart's business model is to squeeze every last piece of inefficiency out of the retail supply and distribution chain. That includes not paying its workers (at all levels) any more than what is necessary to get them to perform their jobs at Wal-Mart rather than their next best opportunity. It is amazingly successful, and it does creates enormous value for Wal-Mart's customers and its shareholders, which the latter (presumably happily) share with the executives who oversee that process and all other workers who contribute to it. That's the workers' reward. As long as Wal-Mart operates within the law and without coercion, this is how the retailing business is supposed to work.

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4 comments:

Guambat Stew said...

I once had over to dinner a financial executive who was senior at ATT and had been at other large US companies has since moved thru other ones. It was his first Pacific trip. I tried to explain to him the Pacific Way: slowly, slowly, develop relationships, etc. He said they'd never do it that way; too much time and money. By God, if it was their money they'd bloody well tell those Asians how to get the job done and their way. I hope it was his last Pacific trip.

May I refer you to a post on my blog today: http://guambatstew.blogspot.com/2005/08/bulls-in-china-shop.html

Guambat Stew said...

Apologies: I'd meant that to your last post about GM's China experience.

Andrew Samwick said...

Either way, it's a thoughtful post and a cautionary tale worth reading.

Roland Patrick said...

I doubt that the union representing condo workers is due a, 'good for them'. Maintenance at housing developments and condos is notoriously unprofitable. Typically, it's a loss leader to promote the visibility of your other services, such as repairs and remodeling.

I do some bookkeeping for a landscaper.

http://paradisegardens.blogspot.com/

He probably loses money on his maintenance contracts, but because he does such a good job keeping up the common areas of several homeowners' communities, he's the first one called when someone wants to re-landscape or install a sprinkler system.

The problem with maintenance is a version of Parkinson's Law; the work expands to whatever time the owner thinks ought to be expended. If this Continental corp. is doing a lousy job, there's a need to be filled. Those unionized workers could start their own companies and take the work away from them.