Unions part 2

Map usa unions

Map usa unions (Photo credit: Wikipedia)

I grew up in a non-union family with Republican tendencies. I have never belonged to a union nor have I been employed at a company with a union. HOWEVER, I believe that having a unionized work force for a significant portion of that work force is beneficial to all workers, union members or not. The US developed a significant and growing middle class after WW2 when large numbers of workers were union members. As union membership has declined, so too has the middle class as good jobs that pay well disappear. Our democracy depends on a vibrant middle class.

Why do managements oppose unionization so strongly? Money and power. Management wants the flexibility to structure work as they see fit, without input or restraint from anyone else. They also want to keep as much of worker productivity as they can to please stockholders and to pad their own compensation. It is a shortsighted policy that reduces the ability of workers to purchase the goods and services that they themselves produce.

Workers need protection by government from employer actions. They also need to band together in unions with other workers for self protection. In this country, we lack free speech in the workplace and we can quit or be fired at will. If you have roots in a community, it is hard to relocate to find another job elsewhere in the country. When my wife and I left California to move to Utah, we did not have a lot of household goods. But the moving bill for less than 500 miles exceeded $5,000.

My first job as an adult involved customer service for an electronics company. I did well and received a generous salary, but not what I felt I was worth. After 21 years I left their employ. Part of my dissatisfaction was monetary, but the greater dissatisfaction came from the general manager’s actions. At first, he encouraged all employees to grow on the job and take responsibilities that required us to stretch. At some point his goals changed, but were not announced. At first I could not believe the change since it seemed so out of character. Eventually over time, I realized the change was permanent. The interests of those of us who worked there were being subordinated to his goal of becoming company president. The division where I worked earned impressive profits. The manger decided to squeeze more profits from us to impress the board of directors. He succeeded in becoming president and the rest of us paid a price. I decided to leave even though I knew that finding comparable employment would be difficult.

Eventually I decided to enter the healthcare industry at a much lower salary. I started at the bottom and worked my way up. I still earn much less than my first job but I am enjoying myself much more. While employed at a hospital in California, I was able to observe at first hand how management combats a unionization effort. The nurses wanted a union and were able to enlist the California Nurses Association‘s help in the effort. While working the night shift on weekends, I was surprised to find top management roaming the halls at 3, or 4 o’clock in the morning. I never discovered what they were doing, but I suspect that they were watching for pro-union speech and actions. The election was finally held and the union lost narrowly. There was joy in management and even among employees who were not nurses and would not have been affected. I was disappointed because I wanted to see a union in action close up.

There is a general correspondence between the rate of national unionization and how well the average person lives: the rate of unionization in the US has dropped from a high of 36% to today’s under 16% rate. Unionization in Denmark is about 95% and it exceeds 85% in Finland. The rate in Germany is 30% plus and I have been unable to find the rate in France, although it is less than in the US. The average person in those countries lives a better, less stressed life than the average worker in the US. If you try to point that out to the Party of No, they will immediately shout socialism. My question to you is this. Are you willing to live a less fulfilling, more stressed life because of someone else’s prejudices?

6 thoughts on “Unions part 2

  1. Unionization post WWII was far after the fact. You are excluding the rapid increase in standard of living in the roaring 20’s. In 1913-14 81% of workers were fired or quit their job within a year. Training new employees is very costly and time consuming. Because of this high employee turnover Ford increased pay to five dollars a day that keep workers loyal to him, which allowed his own workers to buy their own cars which until then was considered a rich mans toy. He also cut the work day to 8hrs a day because so many workers flocked to Detroit looking for work and he was able to run two shifts a day. With the costs for labor now low, as it was way cheaper to pay this high level of salary over training new people everyday, Ford was able to provide cheap vehicles to the masses that allowed for more worker mobility, forging a the middle class that swelled the suburbs outside of cities with the advent of modern transportation.

    http://corporate.ford.com/news-center/press-releases-detail/677-5-dollar-a-day

    The housing bubble was caused because of the government wanting the poor to live in houses they could not afford. Giving a loan to someone that cannot pay means that you lose money. A poor man may owe the bank a lot of money but that doesn’t necessarily mean he has the ability to repay it. Many Americans now have homes that are valued less than what their mortgage values it. They can sell their house but will still be in debt and won’t be able to repay the bank. Both the banks and the individual are losing in this scenario because of so much bad debt. While the individual who got a loan is now left in more debt than he was before and without a house, the government gets to pick winners and losers through bailouts exonerating them from the damage they helped to create.

    • Everyone know that Ford paid $5 per day at first so that his workers could buy the cars they made. Most people don’t know that he cut wages later. GM is doing well now, but how many of its new hires can afford to buy the cars they make? On a two-tier wage scale, not many.
      You are wrong on the housing bubble. The government discouraged red-lining, and the lenders were dragged into making loans kicking and screaming. But then, they discovered how to securiterize the mortgages and sell them as risk-free investments. Only they weren’t risk free and that is how the US and specifically Wall Street spread the Great Recession worldwide. It is a GOP myth that the borrowers or Freddie Mac and Fannie Mae were at fault. It was the repeal of Glass-Steagall and Alan Greenspan’s hands-off philosophy that allowed the housing boom to turn into a bubble.

  2. In a free market system their is a way of valuing labor. Workers very low on the chain receive less pay because their work is of less value. Now when you have a highly unionized market for labor it over values the price of labor, which is the single biggest expense any company pays, and makes it harder for a company to compete against other firms.

    Look at what is happening in Detroit, a city that used to be an auto manufacturing power house is crumbling under the weight of the unions. While pay is about average, the retirement and benefits workers receive working in a factory line at GM or Chrysler can amount to $70/hr for screwing a hub cap onto a car. Also with the advent of socialized medicine, government policy is making it increasingly more costly to hire workers and is sending our economy in the wrong direction.

    Stockholders are people who invested money into a company when it was starting so it can buy equipment ect. for it to operate. Without these stockholders their would be no start up capital for the company and the workers will not have a job in the first place. With new pro-union policy’s of entitlement and further socialization, no wonder why investors are holding back their money because they are scared of throwing their weight behind emerging companies that are doomed to fail.

    From an economic stand point, unions create dead weight loss, or unnecessary
    loss in wealth. In a true free market, as firms develop everyone wins from the CEO and factory floor worker.

    To learn more about advantages of right to work:
    http://mises.org/freemarket_detail.aspx?control=511

    • Empirical evidence supports the connection between unionization, a healthy middle class and a healthy democracy. If not unionization, what do you suggest to maintain a healthy middle class and a healthy democracy? I favor having the Federal Reserve lend directly to workers so that they can purchase stock in the companies where they work and become owners too.

      • What empirical evidence are you talking about?

        The advent of the middle class was a result of the industrial revolution when Henry Ford and others like him revolutionized how our products were made. With work productivity up workers no longer had to work long hours or in harsh conditions because technology and efficiency made it easier to make all the products we need with less inputs.

        If the Federal Reserve lent money directly to workers it would harm the economy because of the inflation involved from pumping so much cash into the money supply. If the workers choose to invest into a company it will cause a rapid increase in stock prices because so many will become investors overnight and it will cause another stock market crash as the market corrects itself later on.

        Look at the housing crash we just went too. The same premise was employed, we get all this money freshly printed from the mint and tell banks to give out loans to people who weren’t in a good state to take them and back them with government money(Fannie Mae and Freddie Mac). This caused a bubble in the housing industry where so many people were buying houses and having them built based off these loans. When so many did default on their loans, as the banks could have originally told you, the bubble popped and we are left with too many houses being built with no buyers.

        The original idea for our Republic, not a democracy, was that a man would live on his own means and be free of an oppressive government. As the only country to ever be founded on the principals of liberty and reason over force, we have done so much under our current free market system to create a vastly better life for each worker. Because of the free markets living standards for the average person rivals that of the kings in century’s past.

      • Freedom and free market capitalism are not related. One does not guarantee the other. It would require less lending to individuals to buy stock than it took to recapitalize the banks during the Great Recession. Central banks do lend directly to individuals in some European nations, and nothing in the law prevents the Federal Reserve from doing the same. The empirical evidence I refer to is the growth of unions and the middle class post WW2. It took union efforts to wrest shorter hours and better pay from employers like Henry Ford. Ford only paid higher wages until he had depleted the ranks of the employers in the Detroit area. Then with fewer employers in the area, he systemically lowered wages.
        The housing bubble was the result of predatory lending, not the result of the government telling the banks to lend to the unqualified. The banks discovered how profitable lending to the poor and elderly was, so they made loans that people could not repay. It was a systematic stripping of the equity that people had in their homes, built up over many years

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