Minor Thoughts from me to you

Archives for Unions (page 2 / 2)

I Support Governor Walker

A little over 2 weeks ago, Governor Walker introduced his Budget Repair Bill for the 2009-2011 biennium. This bill includes several changes related to collective bargaining for public sector employees.

Here is the Wisconsin State Journal's summary of the changes:

Makes various changes to limit collective bargaining for most public employees to wages. Total wage increases could not exceed a cap based on inflation unless approved by referendum. Contracts would be limited to one year and wages would be frozen until a new contract is settled. Collective bargaining units are required to take annual votes to maintain certification as a union. Employers would be prohibited from collecting union dues, and members of collective bargaining units would not be required to pay dues. Changes would be effective upon expiration of existing contracts. Law enforcement, fire employees and state troopers and inspectors would be exempt from the changes.

These changes have been heavily protested ever since the bill was introduced. Protesters have been occupying the state capitol building for over a week. They have constantly protested that the governor is attempting to take away workers' rights and virtually enslave the people who make Wisconsin great. They have even compared Governor Walker to Hitler, saying that Hitler's first step on the path to genocidal dictatorship was breaking the unions.

I find all of the emotion and rhetoric to be over the top and ridiculous. First of all, unions are a great answer to a problem that doesn't really exist any more. Secondly, this is about the rights of the workers but it's different than you might think. Collective bargaining laws do protect the rights of some workers but they also deprive workers of other rights too. It's not a simple matter of rights versus no rights. Rather, it's a competition between rights and I think the governor is tipping the balance back towards the right kind of rights. Finally, public unions are different from private unions and protesters seem to be completely unaware of the difference.

I keep coming back to one fundamental fact. The government of the State of Wisconsin exists to fulfill certain indispensable roles (law and order, for instance) and to provide certain basic services (education, safety nets, etc) for the citizens of Wisconsin. It is fully funded by those same citizens. They are entitled to the best possible services at the lowest possible costs. The State does not exist to provide a jobs program or a model for employment. I agree with Megan McArdle's view of state employment:

I don't think of state employment as a way to create, in miniature, my ideal labor utopia. I think of it as a way to procure services. I define people as being "overpaid" not if they are paid more than someone with a similar level of education, but if they are paid more than I need to pay to attract adequate workers.

If the State can save money by outsourcing functions or automating functions, it should do so. If they State can save by hiring fewer, higher quality, workers at higher pay, it should do so. The State should do whatever is necessary to provide its citizens with the best services at the lowest cost.

I believe these changes would make the State closer to being able to do that. Limiting wage increases to the rate of inflation would set a baseline expectation that the cost of government services shouldn't increase any faster than general costs in the rest of the economy. At the same time, local governments would be able to pay more for needed work, if the voters directly approved. That seems imminently fair to me.

Limiting contracts to 1 year instead of 2 years, would give local governments the ability to react quicker to changing economic conditions. They wouldn't necessarily be stuck with a contract that no longer reflects reality on the ground, in the event of a sudden economic swing (good or bad).

I very much like the fact that unions would be required to recertify annually. This will absolutely not be a problem for any union that enjoys the full support of its membership. For unions that are accurately and fairly representing their covered workers, this should be a routine humdrum sort of affair. A union would only fail to be certified if a majority of workers either fail to vote at all (indicating that they don't really care about the union and don't need it) or if a majority actively vote against it. In the latter case, that could only mean that they're unhappy with their representation and desire better representation. That's the ultimate in workplace democracy and can only lead to continued, high quality union representation.

Finally, the State would be out of the business of collecting union dues and employees would no longer be forced to pay union dues. This will have several positive effects. First, it will restore employees' free speech rights. They will no longer be forced to fund political positions that they disagree with. They will also no longer be forced to fund positions that they do agree with, if they find that they have better uses for their money. Union dues sometimes amount to nothing more than a political tax on employees. This provision will remove that tax and will ensure that employees only pay it if they feel that they're receiving something of value in return. This change will only cripple the unions if workers find that they don't agree with how their money is being spent and don't receive something of value in return. That will be another factor forcing unions to be more responsive and accountable to their members.

I strongly support the collective bargaining provisions of the Walker Budget Repair Bill.

Finally, a closing word about the political rhetoric that's been deployed against Governor Walker. I'll let David Harsanyi speak for me.

According to Nobel laureate and raconteur Paul Krugman, Gov. Scott Walker and "his backers" are attempting to "make Wisconsin — and eventually, America — less of a functioning democracy and more of a Third World-style oligarchy."

Now, it's common knowledge that throwing around loaded words like "socialism" is both uncivil and obtuse, so it's comforting to know we can still refer to people as "Third World-style oligarchs." And boy, that kind of Banana Republic doesn't seem very appealing.

Democracy, naturally, can only be saved by public sector unions, which attain their political power and taxpayer-funded benefits by "negotiating" with politicians elected with the help of unions who use, well, taxpayer dollars. And you know, that doesn't sound like an oligarchy at all.

While Walker, who won office using obnoxious Third World oligarchic tactics like "getting more votes than the other candidate," is a cancer in the heart of democracy, union-funded Democrats evading their constitutional obligation to cast votes are only protecting the integrity of representative government by completely avoiding democracy.

This entry was tagged. Unions Wisconsin

Unions: Public Sector Unions Are Different

Not all unions are created equal. Public sector unions are fundamentally different from private sector unions. While private sector unions can serve a valuable function, public sector unions exist in a different world, with different constraints and a different history.

Private and public sector unions are different historically. While there's a long of history of private sector unions (based on both negative rights and positive rights), public sector unions have only been around since the late 1950's. The shape of that history has also been dramatically different. Take it away, Jonah Goldberg:

Traditional, private-sector unions were born out of an often-bloody adversarial relationship between labor and management. It's been said that during World War I, U.S. soldiers had better odds of surviving on the front lines than miners did in West Virginia coal mines. Mine disasters were frequent; hazardous conditions were the norm. In 1907, the Monongah mine explosion claimed the lives of 362 West Virginia miners. Day-to-day life often resembled serfdom, with management controlling vast swaths of the miners’ lives. Before unionization and many New Deal–era reforms, Washington had little power to reform conditions by legislation.

Government unions have no such narrative on their side. Do you recall the Great DMV Cave-in of 1959? How about the travails of second-grade teachers recounted in Upton Sinclair's famous schoolhouse sequel to The Jungle? No? Don't feel bad, because no such horror stories exist.

Government workers were making good salaries in 1962 when President Kennedy lifted, by executive order (so much for democracy), the federal ban on government unions. Civil-service regulations and similar laws had guaranteed good working conditions for generations.

The argument for public unionization wasn't moral, economic, or intellectual. It was rankly political.

Traditional organized labor, the backbone of the Democratic party, was beginning to lose ground. As Daniel DiSalvo wrote in “The Trouble with Public Sector Unions,” in the fall issue of National Affairs, JFK saw how in states such as New York and Wisconsin, where public unions were already in place, local liberal pols benefited politically and financially. He took the idea national.

The plan worked perfectly — too perfectly. Public-union membership skyrocketed, and government-union support for the party of government skyrocketed with it. From 1989 to 2004, AFSCME — the American Federation of State, County, and Municipal Employees — gave nearly $40 million to candidates in federal elections, with 98.5 percent going to Democrats, according to the Center for Responsive Politics.

Private and public sector unions also face different bargaining conditions. Private sector unions bargain with employers who face competition of their own. The employer must find ways to satisfy the union demands for pay and benefits without paying so much that it goes out of business. The union (mostly) recognizes this and limits its demands accordingly. Private sector unions are also paid with money earned from selling products or services to consumers who bought them voluntarily.

Public sector unions bargain with a single employer who faces no competition whatsoever. The employer satisfies the union demands for pay and benefits not with its own money but with money taken from the public purse. This limits the incentive of the employer to drive a hard bargain. Unions recognize this and increase their demands accordingly. Because public sector unions are paid with money taken from taxpayers who have no choice in the matter, taxes can always be raised to compensate for increased demands.

Private and public sector unions have different effects on the rest of the population. Private sector unions work for employers who provide goods and services as part of a free wheeling market place. If a private sector union strikes, it risks having consumers permanently move to a competing supplier. If a public sector union strikes, it deprives the citizens of an urgently needed service -- generally one that isn't provided by anyone else. A striking public union holds citizens hostage to its demands.

(Peter Kirsanow, a former member of the National Labor Relations Board, lists other constraints that apply to private sector negotiating but not to public sector negotiating.)

Public sector unions also deprive the voters and their representatives of the final say over government spending. A huge percentage of the government's budget -- of any organization's budget -- is spending on salary and benefits. But in areas with public sector unions, the government doesn't directly set salary and benefits. Instead, it can only set the amounts that the unions will agree too. This ultimately gives the union final authority over the government's budget. This was recognized by a 1943 New York Supreme Court decision.

To tolerate or recognize any combination of civil service employees of the government as a labor organization or union is not only incompatible with the spirit of democracy, but inconsistent with every principle upon which our government is founded. Nothing is more dangerous to public welfare than to admit that hired servants of the State can dictate to the government the hours, the wages and conditions under which they will carry on essential services vital to the welfare, safety, and security of the citizen. To admit as true that government employees have power to halt or check the functions of government unless their demands are satisfied, is to transfer to them all legislative, executive and judicial power. Nothing would be more ridiculous.

Even Franklin Delano Roosevelt recognized that public sector unions were a bad idea.

All government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into public service. It has its distinct and insurmountable limitations when applied to public-personnel management. The very nature and purposes of government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with government employee organizations. The employer is the whole people.

There is one, final, crucial difference between private and public sector unions. Public sector unions get to pick their own bosses, their own negotiators. This turns them from just an organization that protects their members to an organization that acts as a giant special interest. They are able to take the union dues that their members are forced to pay and spend a large portion of those dues on political lobbying.

As they sit across the negotiating table, they are able to implicitly threaten the negotiator with a loss of his own job or to implicitly support him with future campaign contributions. Nothing is said openly. Nothing needs to be said openly. Everyone at the table knows how the game works. The representatives and negotiators who play nice will be handsomely reward during the next election campaign. Those who do not can expect to be attacked endlessly.

This is not just a theoretical concern. Professor Bainbridge reviewed the evidence against public sector unions and found it persuasive.

Research by Terry Moe (22 J.L. Econ. & Org. 1) into the electoral power of teachers' unions finds just such an outcome:

The first study ... provides evidence that teachers, acting through their unions, are quite successful at getting their favored candidates elected to local school boards. When a candidate is supported by the unions, her probability of winning increases dramatically, so much so that the impact of union support appears to be roughly the same as the impact of incumbency. In terms of total impact, union influence may be even greater than this suggests, because union victories literally produce incumbents—and the power of incumbency then works for union candidates to boost their probability of victory still further in future elections.

The second study ... shows that public bureaucrats' turnout advantage over other citizens is much greater than the existing literature would lead us to expect. It also offers persuasive new grounds for believing that their high turnout is indeed motivated by occupational self-interest—and more generally, that they are actively and purposely engaged in an electoral effort to control their own superiors.

Moe concludes:

The prevailing theories treat bureaucrats as mere subordinates, controlled from above by political authorities. But the control relationship can run both ways, and not just because bureaucrats have expertise and other sources of private information. In a democratic system the authorities are elected, and this gives bureaucrats an opportunity to exercise electoral power in determining who will occupy positions of authority and what choices they will make in office. It would be odd indeed if public bureaucrats and their unions did not invest in this kind of reverse control—and there is ample evidence that they do.

In effect, public sector unionism thus means that representatives of the union will often be on both sides of the collective bargaining table. On the one side, the de jure union leaders. On the other side, the bought and paid for politicians. No wonder public sector union wages and benefits are breaking the back of state budgets. They are bargaining with themselves rather than with an arms'-length opponent

Nor are these the paranoid delusions of far-right anti-union agitators. Union leaders recognize their power over their employers.

the Michigan Education Association has distributed a 40-page instructional manual for local leaders that's entitled "Electing Your Own Employer, It's as Easy as 1, 2, 3." And as one high-ranking state union official told me when I wrote Revolution at the Margins, "We knew the school system wasn't moving to Mexico," so there was no reason to work with the state negotiator on establishing a prudent salary structure.

Even when unions don't directly control the officials they're negotiating with, they can strongly influence the negotiations through political means.

Professor Bainbridge quotes from the 1971 book, The Unions and the Cities.

No such market restraint exists in the public sector except in theory since discharging teachers, sanitation workers, or police- men as a result of granting higher benefits raises very real political pressures from within the affected government department and from an inconvenienced public. Government employers too frequently yield to constituents by a grant of increased benefits to employees and then either bury the increases in the "bowels of an incomprehensible municipal budget," seek new funds, or reduce other services by reallocating the city's treasury. Thus, normal market restraints are often supplanted by political restraints regardless of economic or social impact.

Increases can be buried if the public doesn't realize exactly how well employees are paid. A teacher's listed salary may only be $35,000 or $40,000 a year. The rest of the teacher's salary is hidden inside the benefits. The Wall Street Journal did an analysis of the fringe benefits for Milwaukee public school teachers. The top of the line number may be surprising: for every $1.00 in salary that they receive, they receive another $0.72 in benefits. These benefits include a total of $0.22 put into pension plans and $0.38 put into healthcare benefits.

Benefits are also hidden from casual view by specifying that they're for life. For instance, Milwaukee school teachers receive district funded healthcare for life. The district pays 100% of the cost of healthcare at the teacher's retirement and the teacher is only responsible for the annual increase in the cost of healthcare. Historically, these promises have not been pre-funded and the future costs do not show up on the district's budget.

Here's another way that benefits can be hidden. You know that public school teachers get healthcare as part of the compensation. But do you know how they get that healthcare? Did you know that WEA Trust, an insurance company affiliated with WEAC, provides health insurance to nearly every public school employee? And that that healthcare is significantly more expensive than comparable insurance from companies not affiliated with WEAC?

BigGovernment.com provides an overview.

WEA Trust has grown very fat on public school dollars, with a net worth of $316 million and a team of 12 administrators all receiving compensation packages worth six figures per year.

Sadly, this insurance swindle is endorsed by state law.

The pressure derives from state law, which makes the identity of a school’s health insurance carrier a topic of collective bargaining between local unions and school boards. That allows union representatives to come to the table demanding expensive WEA Trust coverage, and frequently school boards give in.


Once school districts sign up for WEA Trust coverage, and write the carrier into collective bargaining agreements, the shackles are on. And they aren't easily removed.

Local unions often refuse to have the provision stricken from school labor contracts in subsequent negotiations. If a school board presses the issue in an effort to save money, WEAC will frequently take the case to arbitration.

The Trust's business practices also complicate the problem.

Districts need employee claim histories to provide to potential bidders, but WEA Trust sometimes refuses to surrender the information, making it more difficult, if not impossible, for competitors to draft an accurate insurance estimate.

WEA Trust also reportedly threatens districts with higher premiums – by removing them from regional insurance pools with lower rates – if they consider a cheaper carrier.

Some districts have managed to break WEA Trust's shackles and the savings tell the story. Officials from 15 districts recently told EAG that they saved six figures the first year under new coverage, while still providing quality health benefits for employees. They also say the cost of their new coverage has remained steady in subsequent years.

But there is a catch. Officials at all of the breakaway districts said they had to surrender, or at least share, the insurance savings with their local unions, generally in the form of salary increases. That left them with little or no extra revenue to cover other costs.

Last year, Milton's school district was able to switch from WEA Trust to Dean Health and save $382 per month, per employee. That's not exactly chump change. This is something that other school districts around the state would also like to be able to do.

Yes, public sector unions are almost completely different from private sector unions. They are not at all the same thing and shouldn't be treated the same either by the general public or by the government. They should be treated like what they are: a special interest that looks out for its own interests at the expensive of everyone else's, like any other special interest does.

But they're not just any other special interest. They use their position as public "servants", providing crucially needed public services, to make demands of the general public. If they're rebuffed they don't just respond by campaigning politically as other special interests do. They also do whatever is necessary to inflict pain upon the general public, in an effort to further pressure government representatives. This pain can take the form of protests, slow downs, or stoppages thus depriving citizens of the services on which they depend.

Because of all of this, I do not find public sector unions to be admirable. I despise them as much as I despise every other special interest.

Unions: A Right to a Union?

Do workers have a right to unionize? If a legislature changes the law to remove collective bargaining, does that deprive workers of their rights?

It depends. It depends on which rights you're talking about and on which rights the law covers.

There are two kinds of rights. The first kind is negative rights. Negative rights either permit you to be inactive or require someone else to be inactive towards you. For example, free speech is a negative right. It allows you to speak, or not, as you choose. It requires the government to be inactive whether or not you speak: the government may not force you to speak and the government may not prevent you from speaking. The right to a free press is another negative right. The government may neither force something to be printed in the press nor may it prohibit the press from printing something.

The second kind of rights is positive rights. Positive rights either require you to be active or require someone else to be active towards you. For example, universal education is a positive right. The government requires you to attend a school of some sort and the government requires someone to provide a school for you. Generally, the government directly provides schooling by forcibly requiring citizens to pay taxes and then using those tax dollars to pay for a school. The "right to health care" is another example of a positive right. If you are unable to purchase your own health care services, the government requires someone else to purchase them for you.

The positive right is distinguished from the negative right in that it requires you -- or someone else -- to be active. It places a burden on you or on someone else. Very broadly speaking, negative rights force others to stay out of your way, as you live your life and make decisions. Positive rights force others to provide for you (as needed), as you live your life and make decisions.

How does this apply to labor and labor law? Well, unions can either benefit from negative rights or positive rights. Under negative rights, individual workers are free to negotiate directly with employers for their pay and benefits. They are also free to associate with other individual workers and form a bargaining group. They are then free to attempt to negotiate as a group, for pay and benefits. They can invite others to join the group at any time and workers are free to leave the group at any time. The guiding rights principle is inaction: no worker can force another to join nor prohibit another from leaving.

Likewise, employers are free to negotiate with the group or to choose to negotiate with workers individually. Once again, the principle is inaction. No employee can force the employer to negotiate with the larger group. Likewise, no single employee can force the employer to stop negotiating with the larger group.

The negative right to labor allows both the worker and the employer to negotiate individually or through a group, whatever they both prefer. It prevents either side from coercing the other side.

Under positive rights, individual workers are not free to negotiate directly with employers for their pay and benefits. They must only negotiate as part of a larger group. All new workers must accept what the group has negotiated and must only negotiate through the group. No worker may negotiate individually as long as he stays in that job.

Likewise, employers are not free to bargain with individual workers. They must negotiate (active principle) with the group. They may not negotiate with any other group of employees -- only with the original group. If the group of workers stops working (goes on strike), the employer may not seek out other groups of employees, to see if they would be willing to work for the original conditions, pay, and benefits. This gives the group a monopoly control over the employer's supply of labor.

The positive right to labor forces both the worker and the employer to negotiate only through a group. It actively forces both sides into a specific association.

In Wisconsin, public employee unions are an example of labor law under positive rights. Employers are required to negotiate with the appropriate union and forbidden to negotiate individual contracts with workers. Employees are not required to join the union but they are required to pay all union dues that union members have to pay and are required to abide by the terms of the current collective bargaining agreement.

Take, as an example, an individual with a PhD in history who would like to work as a high school teacher in Madison's public schools. Under the terms of the collective bargaining agreement with Madison Teachers Inc, the school district must pay that teacher a minimum annual salary of $41,036. (I think. The exact details of the salary portions of that agreement are not entirely clear to me.)

For most employees, this is probably a good thing. Most employees are eager to get the maximum possible salary. Most employees probably feel that even this salary is too low and that they deserve more. But that's most employees in most scenarios.

Consider an alternate scenario. What if the district can't afford another teacher at that level? The teacher may wish to work for less, in the interests of having a job. (Or, he may have other income to live on and may wish to take the job for less in the interests of melding the bright, young minds of tomorrow.) But he's not free to work for a different salary and the school district isn't free to pay him a different salary if he requests it.

Consider another alternate scenario. Consider a worker who does not agree with the political stance of her union, preferring different political goals and outcomes. Under current law, she is forced to contribute union dues to that organization anyway. (For a Wisconsin teacher, this can be $700-1000 a year.) Each year, she is forced to watch as the union gives that money to politicians that she disagrees with and uses that money to oppose politicians that she does agree with. Her co-workers' positive rights to her union dues limit her negative rights to support candidates that she agrees with.

The positive rights to a union limit an employee's negative rights to decide what terms to work under and what to support. I value negative rights far more highly than I value positive rights. For that reason, I believe unions do not increase the rights of the workers, they decrease them. I favor modifying labor law to restore workers' negative rights.

Unions: A Good Solution for a Vanishing Problem

I think that unions are a good solution for a problem that no longer exists. One hundred years ago, many jobs were for factory work or mine work. The skill and quality of the individual employee didn't matter. A person would spend an entire day tending a loom, welding rivets, or doing some other mindless, repetitive job.

If one person quit (or died), someone else could easily step in and take over the job without noticeably slowing production. Workers were largely powerless because management could easily replace individual employees. This left each, individual, employee with almost no leverage. The only way that a threat to stop working meant anything is if every employee made the threat simultaneously. Even that threat was largely meaningless unless an employer could be prevented from just bringing in replacement workers en-masse.

In this kind of environment, a union made a lot of sense. It gave largely indistinguishable workers a way to band together and make management take notice of them. It gave them bargaining power, to fight for safer working conditions and better treatment. It gave them the leverage to end abusive practices like the company store.

During this period, workers were like cogs in a vast, industrial machine. Individually, they were interchangeable, easily replaceable, and mostly ignored. Ultimately, the factory machines (or the mine itself) were far more important or valuable than the individual worker was. But together, they had a voice and could force management to pay attention to them. In this environment, unions were a useful tool.

In a union company, it was important that the job get done. It wasn't really important who did that job. But we no longer live in that environment.

We live in a dynamic economy where factories provide fewer and fewer jobs even as factory output increases. The factory "worker" is changing from interchangeable employees to interchangeable robots. The true factory workers need to have unique, valuable skills. They need to be able to watch the factory floor, constantly looking for problems and creating solutions. The worker is more valuable than the machines he watches over. They can be replaced with a purchase order to the manufacturer. His knowledge and skills can't be replaced so easily.

We live in a dynamic economy where knowledge matters. A lot. A good teacher isn't just a replaceable cog in a machine. He or she knows how to construct a lesson plan, knows how to grade papers fairly, knows the subject matter backwards and forwards, knows how to motivate students, knows how to communicate with parents, and more. A good teacher is valuable and hard to find.

We live in a dynamic economy where the best worker is the one who can learn the most and do more than one task well. We live in a dynamic economy where what you can do today isn't nearly as important as what you'll be able to do tomorrow. We live in a dynamic economy where individual creativity and initiative far outweigh the ability to follow rote orders or do the exact same thing day after day, year after year.

In a modern company, it's still important that the job get done. But it's far more important who does the job. The employee's unique knowledge, skills, and input are crucial to the success of the company. The employee is hired to make decisions, to look at a problem, see a solution, and then implement the solution. The employee is hired to work independently and confidently, using his brain as the ultimate tool. This is the environment we live in now.

Unions are ill suited to this environment. Union collective bargaining agreements are written for last century's economy. Union contracts treat employees as replaceable cogs in a machine.

Take, for example, the contract for Madison Teachers Incorporated. Pages 10-15 of the 2009-2011 contract lay out the pay scale for teachers. The entire section assumes that one teacher with a given set of qualifications and credentials is just as good as another teacher with the same set of qualifications and credentials.

No allowance is made for differences in the amount of time that teachers put into the job each day. No allowance is made for the enthusiasm or creative thinking that each teacher brings to the job. No allowance is made for, well, anything that makes a good teacher a good teacher. As far as the contract is concerned, you could take away Mr. Smith and replace him with Ms. Jones and absolutely nothing would have changed.

Instead of valuing flexibility, creativity, and employee knowledge, a union values employee longevity. The employee that has been around the longest, that has the most invested in the union, that has the most clout in the union is favored over the younger employee. That holds true even when the older employee is contributing little to the organization and the younger employee is contributing much to the organization. It doesn't matter. When the time comes for layoffs, the younger employee goes and the tenured, long-time employee stays. This, of course, does wonders for the work effort and morale of the younger employees.

Unions also restrict the ability of the employer to reward and retain the most valuable employees. Union contracts reward every employee the same, based on classification. When it comes time for raises, everyone in the unit gets the same raise regardless of their individual value to the organization. In any organization there are a few great employees who provide much of the creativity and drive. There are a lot of good employees who do their jobs well. And there are always a few bad employees who either don't do their job well or who can't be relied upon to make good decisions and execute tasks properly.

An organization should have the freedom to reward the top performers appropriately, giving them little reason to leave for greener pastures. And the organization should have the freedom to fire the low performers and seek out new hires who might be able to contribute more. Union contracts forbid this kind of personnel management and leave departments unable to retain their top performers while they're also unable to shed their dead weight.

Worse still, the union contract locks in a specific set of work conditions and job responsibilities. It gives employers very little flexibility to deal with changing conditions and changing needs. Before any change can occur, the employer must first convince the employees that the change is necessary and desirable.

For workers who are used to working a specific way (and have grown comfortable in that), that's a very tough sell. If large changes are needed, it can be practically impossible to convince the employees to change. The employer is stuck with a workforce that won't adapt to new needs and that it can't replace. That's a recipe for stagnation and, eventually, death.

Unions are, quite understandably, opposed to any changes that might lead to the elimination of any jobs. Unions exist to protect workers and to ensure that no jobs are ever destroyed. Unions can (and do!) prevent employers from switching to more efficient processes and more efficient technology.

The union mindset would ensure that every car still came with a buggy whip holder and a buggy whip. Sure, they're useless. But the alternative would mean that buggy whip makers would be unemployed and a union wouldn't be able to allow that. Don't believe me? Then why did railroads pay "firemen" to ride in the cab of diesel locomotives, 50 years after diesel engines replaced coal engines?

No, unions are ill suited to the modern work environment. Where the economy requires flexibility, unions offer rigidity. Where the economy requires creativity, unions offer only cog-like employees. Where the economy values unique skills and contributions, the union values longevity.

An organization full of union employees is an organization that is quickly headed for the trash heap of history.

This entry was tagged. History Unions

The alternative to unions

The alternative to unions →

You want negotiating power? Get educated. Get a skill. What keeps wages up in a world of 7% unionization in the private sector is that I have alternatives. So stay in school and study something serious that has value alongside whatever else you’re interested in. Or study something interesting that has little market value. But if you do that, don’t complain about your low salary and lack of a union.


This entry was tagged. Unions

A Race To The Bottom?

A Race To The Bottom? →

Walter Russell Mead argues that if we want to really avoid a race to the bottom, we need to aggressively raise productivity across the economy. That will require changes that unions will resist to the death. He argues that we may have to take away the unions' power to save the economy.

This entry was tagged. Unions

Of Course It’s about the Money

Of Course It’s about the Money →

Christian Schneider provides a run-down of the way that the teachers' union goes after the money, in ways large and small. Remember, unions always help their members by limiting competition for jobs and by fighting anything that might hurt the worst teachers.

This entry was tagged. Unions

Did the Madison Union Strike Illegally?

This morning, on Facebook, I said that I was glad that the teachers would be ending their illegal strike tomorrow. But have Madison's teachers been illegally striking? After further research and reflection, I don't think they have been but I do think their actions came very close to a strike. A strict reading of the law kept their actions from being a de jure strike. I do believe that their actions constituted a de facto strike, however and violated the spirit of the law that allows public sector employees to unionize.

Wisconsin law governs public sector unions. Specifically, Chapter 111 governs Employment Relations. Subchapter I deals with keeping the peace, Subchapter IV deals with municipal employment relations, and Subchapter V deals with State employment relations.

Chapter 111.01 deals with the general goals of the law. One of the primary goals is to keep the peace between workers and employers, to the benefit of everyone else.


Industrial peace, regular and adequate income for the employee, and uninterrupted production of goods and services are promotive of all of these interests. They are largely dependent upon the maintenance of fair, friendly, and mutually satisfactory employment relations and the availability of suitable machinery for the peaceful adjustment of whatever controversies may arise. ... It is also recognized that whatever may be the rights of disputants with respect to each other in any controversy regarding employment relations, they should not be permitted, in the conduct of their controversy, to intrude directly into the primary rights of 3rd parties to earn a livelihood, transact business, and engage in the ordinary affairs of life by any lawful means and free from molestation, interference, restraint, or coercion.

It's pretty clear that one of the goals of allowing public employees to unionize was to ensure that disputes could be handled in an orderly way, without inconveniencing everyone who depends on the work that the state and municipal employees do.

As the law continues, Chapter 111.06 starts to lay out what "unfair labor practices" are, both for the employer (1) and for the employee (2). I'll quote some of the unfair labor practices, for employees.

(c) To violate the terms of a collective bargaining agreement, including an agreement to accept an arbitration award.

I'd argue that, per the terms of the CBA for Madison's teachers, calling in sick to attend a protest meet this definition of an unfair labor practice.

(e) To cooperate in engaging in, promoting or inducing picketing that does not constitute an exercise of constitutionally guaranteed free speech, boycotting or any other overt concomitant of a strike unless a majority in a collective bargaining unit of the employees of an employer against whom such acts are are primarily directed have voted by secret ballot to call a strike.

Given that no strike has been called, I think the teachers who -- by their absence -- forced schools to close have engaged in unfair labor practices towards their fellow teachers. The teachers are arguing that their actions are merely an exercise of constitutionally guaranteed free spech. I don't know that I agree. Not when a large minority of teachers are acting collectively, with the approval and encouragement of the union, to shut down the schools.

Now, let's move specifically to Subchapter IV, Municipal Employees. Section (1)(i) and (1)(j) make it clear that teachers are muncipal employees since they are employed by school districts. Section (1)(nm) defines a strike, for municipal employees.

"Strike" includes any strike or other concerted stoppage of work by municipal employees, and any concerted slowdown or other concerted interruption of operations or services by municipal employees, or any concerted refusal to work or perform their usual duties as municipal employees, for the purpose of enforcing demands upon a municipal employer. Such conduct by municipal employees which is not authorized or condoned by a labor organization constitutes a "strike", but does not subject such labor organization to the penalties under this subchapter.

What we had in Madison last week was a concerted stoppage of work by municipal employees for the purpose of enforcing their demands that the Governor alter the Budget Repair Bill. Because the unions didn't call a strike, the union itself isn't subject to penalties but individual teachers could be. Because the teachers were demonstrating against the State, not the municipal employer, their actions do not directly meet the definition of a strike.

Section (3)(b)(4) repeats the general prohibition against violating the current CBA. Section (4)(L) bans strikes by municipal employees.

Except as authorized under par. (cm) 5. and 6. c., nothing contained in this subchapter constitutes a grant of the right to strike by any municipal employee or labor organization, and such strikes are hereby expressly prohibited. Paragraph (cm) does not authorize any strike after an injunction has been issued against such strike under sub. (7m).

Section 7m lays out the process for ending a strike.

Section (7m)(a)

At any time after the commencement of a strike which is prohibited under sub. (4) (L), the municipal employer or any citizen directly affected by such strike may petition the circuit court for an injunction to immediately terminate the strike. If the court determines that the strike is prohibited under sub. (4) (L), it shall issue an order immediately enjoining the strike, and in addition shall impose the penalties provided in par. (c).

Section (7m)(c)(2)

‘Individuals.’ Any individual who violates sub. (4) (L) after an injunction against a strike has been issued shall be fined $10. Each day of continued violation constitutes a separate offense. After the injunction has been issued, any municipal employee who is absent from work because of purported illness is presumed to be on strike unless the illness is verified by a written report from a physician to the municipal employer. The court shall order that any fine imposed under this subdivision be paid by means of a salary deduction at a rate to be determined by the court.

The Madison School District thought that these sections of law applied. They filed suit on Friday, in Dane County Circuit Court, to have the work stoppage declared a strike and to get an injunction against the strike. MTI, the local union, did argue that the stoppage wasn't a strike.

In court, MTI lawyer Lester Pines argued it was not a strike because the union made no demands against the district, a requirement for a strike under state law.

Instead, he said, teachers were exercising their First Amendment right to express their feelings about Gov. Scott Walker's plan to limit collective bargaining.

"To do so they may be subjecting themselves to discipline, to having their pay docked, but they are making that choice individually," Pines argued.

A hearing was scheduled for Monday morning but it was canceled / postponed when the teachers indicated that they would return to work on Tuesday.

I'm forced to agree that the teachers weren't technically striking, since they were protesting the actions of the State not the actions of the Madison School District. Morally, I believe the unions did engage in a strike. It didn't, quite, meet the legal definition of a strike but it came right up to the boundary. The State doesn't directly employ teachers but it does set the overall policy and rules for how school districts employ teachers. Thus, I think of the State as a related employer (a grandparent employer?). The arguments presented during the last 6 days of protest certainly sound like the arguments that striking employees would make against an employer. These demonstrations were done for the purpose of demonstrating the unions' power and attempting to force the government -- at all levels -- to agree to their demands.

I do believe the individual teachers are guilty of violating 111.70(3)(b)4. They're only innocent of violations to 111.06(2)(e) because their demonstrations were against the State instead of the municipal government.

So, I was wrong. Legally, the unions are clear. The individual teachers are guilty only of violating their own collective bargaining agreement.

Union Productivity: The Downfall of the Detroit Three?

Rand Simberg argues that UAW work rules have killed the productivity of the Detroit Three. He thinks it's possible that the companies could survive paying the high salaries if they had a free hand to simultaneously increase worker productivity. But they don't and for that reason the union deserves to die.

Some have claimed that the only goal of the Republicans was to break the union. Well, if that -- or at least breaking the work rules -- wasn't one of the goals, it should be, because there is no saving this industry without doing so in some form. After all, the union played a major role in breaking it. If we could do so, the Wagner Act, a relic of the Depression and New Deal, should be repealed or at least revised as well. Unfortunately, with the party and mindset that passed it over seventy years ago once again in power in Washington, they seem much more likely to dramatically worsen it and spread the infection to the rest of American industry.

I'm a sympathetic to his arguments, but I have to admit that they're entirely based on anecdotal evidence. I'd be interested in seeing actual statistics about the productivity differences between the Detroit Three and everybody else.

This entry was tagged. Unions

The Fallacy of Unionization

SEUI chief Andy Stern:

When you have higher wages, people aren't poor, they get to eat, they get to live a better life and have a social safety net.

That's the fallacy of unionization right there. People who have a job are better off. But what about people who don't have a job? They're not better off. They don't have higher wages -- they have no wages.

It's precisely those higher wages that keep them out of a job. An employer that can employee someone at $7.25 an hour might not be to employee them at $8.25 an hour. For a full-time employee, a difference of $1 an hour is a difference of $2,040 dollars a year. For small businesses that can be the difference between profitability and non-profitability.

Andy Stern says that Western Europe is a good model for America to follow. I wonder if he's thinking of Germany's 7.1% unemployment, Spain and Belgium's 8.1% unemployment, or France's 8.7% unemployment. While life is great for employed, unionized workers in those countries, it's terrible for the workers without a job.

Who are you most concerned about?

This entry was tagged. Unions

Morning Links

Paul Copan busts some "First Christmas" myths over at Reclaiming the Mind.

  1. There would have been no inns in a backwater town like Bethlehem. They would be found along main roads or in cities.
  2. The word for inn (katalyma) is the same one as the "guest room (of a private home)" mentioned in Mk. 14:14 and Lk. 22:11 --the room where the last supper was eaten.

Shikha Dalmia and Reason Magazine unload on Detroit's bailout request in It's 65 Million B.C. for the Detroit Three.

General Motors alone burned about $5 billion a month for the last quarter and is expected to completely exhaust its kitty by the end of this year. (The other two will follow suit shortly after.) At that rate of cash burn, the bailout money translates into five more months of life.

A comeback in that time would be hard to pull off even if these were the best run companies on the planet, rather than ones debilitated by decades of labor intransigence and management incompetence, two characteristics that show few signs of abating.

Indeed, United Auto Workers (UAW) Chief Ron Gettelfinger, who has been accompanying the auto CEOs on their taxpayer shakedown missions to D.C., had until this morning ruled out any new concessions to the Detroit Three.

... Gettelfinger is also unwilling to overhaul the rigid workplace rules that have long crimped labor productivity. For instance, these rules prevent workers from doing multiple jobs, which means that they can't be quickly redeployed in response to shifting market conditions. Nor will Gettelfinger allow the immediate shuttering of the notorious job banks program that pays laid off workers nearly their full salary for years on end.

Maybe Gettelfinger is just posturing. Happily, he has convened a UAW meeting tomorrow to "mull" some concessions. But if the threat of imminent death won't persuade him to pull out all the stops to restore the auto companies to profitability, why would he do so after receiving a $25 billion life-line from Uncle Sam? In effect, this means that the bailout will force non-auto workers--who should be saving in the event they get a pink slip themselves--to subsidize unemployed auto workers so that they can continue to draw fat checks for a few more months.

Finally, Dave Barry gives some gift recommendations in his Holiday Guide 2008: Gifts - For the Naughty (washingtonpost.com).

A man buys a gift only when he sees a clear and present need, such as he remembers that his wedding anniversary was last week. Otherwise, when a man is in a store, he is looking for practical items.

If he happens to pass by, say, a little ceramic statuette of two little smiley-face turtles with "BEST" painted on one shell and "FRIENDS" painted on the other, he is not going to give it a second glance, because he can't imagine anybody having any use for such a thing except as an emergency substitute for a clay pigeon.

The gift guide includes such jewels as the Uroclub (#2), the wearable sleeping bag (#5), the gun-shaped egg fryer, and the Zombie Yard Sculpture (#11).

Could You Be Forced into a Union?

Do you want to join a union? In Barack Obama's America, you may be forced to. Obama has promised to sign the Employee Free Choice Act, if elected President. What would the Employee Free Choice Act do? Well, take this example.

The Union targets Joe's employer for unionization. There are 100 employees in the proposed bargaining unit, so under EFCA the union only needs to convince 51 of them to sign authorization cards for the union to be certified as the collective bargaining representative for all 100.

The Union leaders are pretty sophisticated at organizing. After all, it's what they do. Pretty quickly they identify both the employees most receptive to unionization as well as those most opposed. Joe falls into the latter group so the Union never even attempts to get him to sign a card. In fact, since most of the pro-union employees work a different shift, Joe's not even aware a union drive is going on.

The Union gets 51 employees to sign cards and gets certified by the NLRB as the collective bargaining representative for all employees -- including Joe, who had absolutely no say in whether he wanted a union.

The Union and Joe's employer begin negotiations but can't get an agreement within 120 days. Under EFCA, a government-appointed arbitrator then writes the "contract". The arbitrator puts a union security and dues check-off clause in the "contract", thereby requiring Joe's employer to deduct $45 a month from Joe's paycheck and remit the amount to the union. The arbitrator also orders Joe's employer to pay a 5% wage increase -- an amount that squeezes the employer's margin. The employer considers lay offs to avoid losses. Joe is near the bottom of the seniority list.

Under EFCA, the arbitrator's order is binding for two years. Joe and his co-workers can't reject it. Joe's company can't reject it.

Let's review: Joe had no choice in being represented by the union. He had no choice in paying union dues. He had no choice in accepting the arbitrator's order that might lead to his lay-off.

Joe concludes that the correct title is the Employee No Choice Act.

How do you like that? I sure don't.

GM Plant Closes: Who's to Blame?

This morning, General Motors announced that it would be closing four plants -- including the Janesville, Wisconsin plant. Everyone was talking about the news today. Most of the talk centered around who to blame. The most popular candidates were President Bush; the evil, greedy managers of GM; and even President Reagan (!).

Governor Doyle's opinion:

"Bad corporate decision kept these lines turning out gas guzzlers as fuel prices went from 2 dollars to 3 dollars and now to 4 dollars per gallon.

"Now we stand here, carrying the burden of those bad corporate decisions -- failed leadership that culminated in a calculation that left out the very heart of this company, the workers who built"

Senator Obama's opinion:

"Unlike John McCain, I'm not in this race to extend the failed Bush economic policies; I'm in this race to end them," Obama said. "I've proposed investing $150 billion over ten years in green energy and creating up to five million new green jobs. We'll finally provide domestic automakers with the funding they need to retool their factories and make fuel-efficient and alternative fuel cars. And we'll invest in efforts to make sure that the cars of the future are made where they always have been -- in the United States. Because the fight for American manufacturing is the fight for America's future -- and I believe that's a fight this country will win."

As I read through the various articles, I noticed a few hints about why American automakers might need funding to produce fuel-efficient cars.

High Labor Costs:

In the past, costs generally were too high for Detroit automakers to turn a profit on small U.S.-built cars. But [Chief Executive Rick] Wagoner said GM has lowered costs enough with new labor contracts and other measures to turn a profit.

"The direct answer is we need to," Wagoner told reporters. "We believe we can build a car there profitably."

Generous Benefits:

Fisher said some of the hardest hit residents will be those employed by suppliers and other businesses dependent on GM, noting that GM often has been called "generous motors" for its pay and benefits.

That corporate generosity -- often granted at the barrel of a UAW gun -- destroyed GM's ability to make a profit on small cars. Because of high labor costs, GM only earned a decent profit on the more expensive trucks and SUVs. With gas costing $4 gallon GM can no longer afford to keep producing gas hogs -- or keep employing a pricey workforce.

Finally, it's interesting to note that Senator Kohl believes only the government is capable of retraining GM's employees.

"With the announcement that General Motors plans to close this plant, thousands of skilled and dedicated workers face a stark future of employment and financial uncertainty," Kohl said. "Secretary Chao seems to understand the severity of the situation and assured me that the Labor Department would take immediate steps to retrain workers at the plant. Only then can these employees learn new skills necessary to finding new jobs."

Silly me. This plant has been on life support for quite a while. I thought that the employees might have taken that as a warning sign to improve their own skills and start learning a new trade.

And, yes, I do feel for these workers. I can sympathize with the fear that comes from losing a steady income and facing an uncertain future. In some measure, the future is always uncertain. I prefer to always plan for that uncertainty, as best as I possibly can. I never want to just assume that if I ignore the uncertainty -- or appeal to Washington -- that it will just go away.

Special-Ed Kids Everywhere You Look

From What special-ed cut means:

Several speech and language clinicians predicted some of the projected savings won't materialize.

Testing of children diagnosed with only speech and language disabilities will intensify, they said, in search of additional diagnoses -- such as learning disabilities, or emotional behavioral disabilities -- that would cement the need for a special education teacher's involvement.

"I have no doubt that additional labels will appear if you look hard enough," said Johnson [a speech and language clinician], who acknowledged that the current system made it more expedient to simply call upon the special education teacher without going through the process of amending a student's individual education plan.

If you subject children to enough tests and examinations, I'm sure you can manage to find something wrong with every one of them. That allows you to easily justify spending millions of dollars on special education teachers, thus preserving valuable teacher jobs and leaving no teacher behind.

It's no surprise that the head of the local teachers' union said the move appears to shortchange vulnerable students and subject the pared-down special education staff to burnout. It will also result in immense hardship for the 45 teachers and assistants that may have to find other work. But never, ever mention that. Keep all of the focus on the children and you may yet preserve your jobs.

Manufacturing in Decline?

United States Steel, Alcoa, Goodyear and the United Steelworkers want to convince you that American manufacturing is in serious decline and that if serious action isn't taken soon our manufacturing sector will disappear entirely.

"The hemorrhaging of manufacturing jobs is hurting America down to the local level," said Terrence D. Straub, United States Steel's senior vice president for public policy and government affairs. "Until and unless there is a political understanding of that -- and political attention paid to that -- our fear is much won't change and in 10 years the American manufacturing base could be gone."

"The image of manufacturing has taken a beating "” quite unfairly "” especially with the younger generation that views information technology and services as being hip and cool," said Scott Paul, the alliance's executive director, who used to work in the A.F.L.-C.I.O.'s industrial department. He said the group wants to "reconnect the American people with the importance of manufacturing and what it means in their lives and what it has meant in terms of creating good, middle-class jobs."

"The fundamental reason we've formed this is we've lost three million manufacturing jobs, and there doesn't appear to be a strong pro-American manufacturing voice out there," said Mr. Gerard, whose union represents 800,000 steel, aluminum, rubber, paper and chemical workers. "The so-called manufacturers' organizations that exist are part of the problem. The National Association of Manufacturers promotes the loss of manufacturing. The N.A.M. has become the voice of multinationals giving away our jobs, of setting up operations overseas."

Oh, baloney. The American manufacturing sector has never been stronger. This is just another example of the shoddy facts and logic that Warren Myer attacked in his analysis of Manufacturing Jobs Myths. For one thing, we manufacture far more today than we ever did before:

Considering total goods production (including things like mining and agriculture in addition to manufacturing), real goods production as a share of real (inflation-adjusted) Gross Domestic Product (GDP) is close to its all-time high.

  • In the second quarter of 2003, real goods production was 39.2 percent of real GDP; the highest annual figure ever recorded was 40 percent in 2000.
  • By contrast, in the "good old days" of the 1940s, 1950s and 1960s, the United States actually produced far fewer goods as a share of total output, reaching 35.5 percent in the midst of World War II.

For another thing, not all "manufacturing jobs" are created equal:

Let's take an automobile assembly plant circa 1955. Typically, a large manufacturing plant would have a staff to do everything the factory needed. They had people on staff to clean the bathrooms, to paint the walls, and to perform equipment maintenance. The people who did these jobs were all classified as manufacturing workers, because they worked in a manufacturing plant. Since 1955, this plant has likely changed the way it staffs these type jobs. It still cleans the bathrooms, but it has a contract with an outside janitorial firm who comes in each night to do so. It still paints the walls, but has a contract with a painting contractor to do so. And it still needs the equipment to be maintained, but probably has contracts with many of the equipment suppliers to do the maintenance.

Keep in mind that the United Steelworkers exists to further the aims of steelworkers who like cushy jobs. The union doesn't exist to further the interests of all Americans. Keep that in mind as you view this graph, depicting the amount of goods manufactured, as a share of GDP.

This entry was tagged. Manufacturing Unions

Unions and Success

The United Automobile Workers Union recently held its annual convention. While in Las Vegas, they discussed what steps were necessary to grow union membership.

Mr. Bailey [president of Local 2865] told fellow members that organizing could often take a long time, saying that it took nearly two decades to change California law to allow academic student workers to organize.

"We all know that the industrial sector is flying away to right-to-work states, where it's going to take time and big-time financial resources to win campaigns," he said, referring to states with laws that do not favor unions.

This is why the unions need to spend big money on recruitment:

The union is about to lose thousands more members in manufacturing. Ford Motor and General Motors want to reduce their hourly work forces by 60,000, and suppliers represented by the U.A.W. also are cutting jobs. Delphi, G.M.'s largest supplier, plans to close 21 of its 29 United States plants by 2008 and cut its hourly work force by thousands

So. High costs of labor is forcing many employers to lay off union workers and move to non-union states. The solution: follow them to non-union states and force them to keep paying ever higher wages. Sounds like a winner to me.

This entry was tagged. Government Unions