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Tuesday, August 02, 2005

Union Pacific

Not so subtle as usual, I suppose.

It occurs to me that one area where I have an extreme minority viewpoint is in the field of organised labor. Why would anyone care to read my predictable chorus of the partisan platform on the various nominations and daily developements that make up the mess we call politics, when the meritorious Michelle Malkin may do such so much more vehemently and with superior personal hygene?

There are a few standard views on organised labor, as it is not a hot enough political issue to merit its own either/or false dualities along party lines. Here they are:

*Unions keep the rich white capitalists from working their employees to death in sweat shops.

* Unions were useful in their time, but are relics of the gilded age and have little relevance in their current form.

* Unions serve only to extort more money from corporations to benefit the union stewards, and incidentally to overpay underworked dropouts.

* Unions perpetuate the capitalist/proletariat system and will be unnecessay when the workers of the world unite. Which will be soon. Maybe.

* Union power balances out corporate power. It's not like the government is potent enough to do that.

We don't hear much violent debate because there are few political initiatives dealing with labor, other than minimum wage and right-to-work laws. There's no issue that really inflames the passions of the vast mudsill of labor, like Roe v. Hoffa or somesuch.

I don't think that I am competent to judge the capitalist system or the place unions hold, in some respects. That's the beauty of the market- it can judge accurately, whereas we sit around and conjecture idly. That said, the whole popular view of labor is sadly wrong.

A business exchanges goods or services for money. A Union exchanges services for money. That's not logically airtight, but nonetheless unions are equivalent to businesses. They must be analysed from two perspectives.

One, the union itself makes its money by negotiating with management, in exchange for union dues. This is essentially a monopoly, since employees do not have a choice of unions. In principle, the current system could be scrapped, and an individual employee or group of employees could retain a company to do their negotiating. This would end the monopoly and give labor better deals. It would be a sort of apocalypse for the current bosses.

The second perspective lies in viewing the labor bloc represented by the union. This bloc exchanges labor for money. This is standard business behavior, yet labor collectives are not regulated the same way other businesses are. They are allowed legal monopolies in some states, but are also reliant totally on one customer- the company the union is located at. This is a rather stifling state of affairs. The labor collectives could, if they wished, unshackle themselves from this bilateral relationship and supply labor to the highest bidder, much like a temp agency. This would mimic the market condition that non-union employees work in, but it would increase flexibility for the employer and increase stability for the employee. Health insurance and retirement packages would be handled by the collective.

The idea of labor collectives replacing permanent employees may have its benefits. However, the workers would be de facto working for a new company, one that supplied their labor to other companies. They would have to negotiate pay themselves, form a union, hire a union (see perspective one), or rely on talent agents. Currently, most workers are unequipped to do either of the last two. Commodotizing labor should in theory remove negotiating skill as a factor in pay, but in reality that seems unlikely.

In the immediate future, none of these drastic changes are plausible. However, there is no barrier to holding unions to the same standards as business. They should have to abide by anti-trust legislation, for example, as exemplified by right-to-work laws, which allow employees to abstain from unions.

A moment ago, I referred to "commodotizing labor." Hasn't that already happened? If not, how could it? I don't know. Upper management certainly seems to be a noncommodity product. Whatever. Unskilled labor is almost a commodity, and that's where American History 102 gets it wrong. There is a common perception that the good old days of low wages and worker exploitation were a result of nonregulation and nonunionization. Perhaps that is true to some degree. I doubt it is a large factor. Unions only get their bargaining power from the scarcity of labor. Government regulations tend to fade away when faced with profit margins.

The reality is that in the 1800s there was some movement from farms into cities, in areas where there was no available frontier. This population pressure is what caused the exodus westward, and the pressure bore equally on the cities. Moreover, hordes of immigrants came fleeing starvation and various genocides. This resulted in a glut in the labor market, driving prices down. The result was starvation wages. Now, we have a growing economy with a stable population base. We have to go to other countries to find workers. The result is high wages, even for non-union employees. The effect of unions can be measured by comparing the salaries of union workers and equivalent non-union workers. The difference is real, but I don't notice any workers falling into sauage grinders or losing their homes to company creditors.

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