Monday, December 22, 2008

On Unions

Some Republicans see the bailout of the car industry as a way to strike that last nail in the coffin lid of American unions. They see unionized labor as the reason why American cars are not competitive. Other countries can pay less to their workers and the U.S. should, too!

This is having the cart before the horse, of course (or it would be if we were not talking about horseless carriages), because the only way American workers could compete in wages with the workers of many developing countries is by accepting near-starvation money. Is that the goal of the Bush administration? I thought the goal wasn't to make sure that the owning classes are comfortable but that the American industry becomes competitive and continues to offer living-wage jobs to its workers.

Now, I'm the last person on earth to argue that unions are all good. They can be quite nasty as can any coalition of people, and they have done some not-so-pretty things in the past, including excluding black workers or women from their membership and meddling in crime and so on. But not having unions is even worse.

To see why, think about the actual negotiation most workers engage when applying for a job or a promotion at a very large firm. Think of the asymmetry of resources: The firm has enormous amounts of money, lawyers and options; the worker may have no money at all and very few other jobs to apply in the area. To pretend that the two sides are engaging in some absolutely equal contracting is preposterous. But that's exactly what some conservatives argue.

More generally, workers are handicapped in these contract games. Firms can take their business and move it to another country fairly easily. Individual workers are hard-pressed to do that, what with the need to learn a new language and a new culture. Even within one country, moving for workers means uprooting the whole family, pulling the children out of school and away from their friends, leaving behind all emotional ties. Firms don't have children or emotional ties which means that they are always ready to leave.

Finally, firms do tend to stick together, whether it's legal or not. What they do is not that different from being unionized. They work together for shared industry goals (such as going to Washington to get bailout money). Why should the workers not do the same? After all, the firms are already often bigger and more powerful than individual workers. If the firms also cooperate in deciding how to set wages and salaries the tiny atomic workers have even less power.

John Kenneth Galbraith wrote about the unions as a counterveiling power to the oligopolistic industries. If that counterveiling power (already waning) is removed what do you think will happen to wages, salaries and pensions in this country?