Employee Free Choice Act and the Recession

[Tsukasa Buddha]

Briefly, the law:

The Employee Free Choice Act (H.R. 800, S. 1041), supported by a bipartisan coalition in Congress, would enable working people to bargain for better wages, benefits and working conditions by restoring workers’ freedom to choose for themselves whether to join a union. It would:

• Establish stronger penalties for violation of employee rights when workers seek to form a union and during first-contract negotiations.
• Provide mediation and arbitration for first-contract disputes (PDF).
• Allow employees to form unions by signing cards authorizing union representation.

Linky.

So this law will give unions more power and will create more unions. Now, before I would be debating the merits of using the non-secret card selection thingy. But I don't care about that at the moment (And the card thing doesn't make them union members, that only happens after they vote in a secret ballot on the union contract, but whatever). I care about this happening during a recession in which we all recognize the growing unemployment, shipping of jobs overseas, failing businesses. The US Chamber of Commerce President Tom Donohue warned Obama about the risk the passage of the bill early in his term would pose to the economy Linky. Trade unions accomplish providing job security and increased benefits for its members, which may sound like a good thing during the recession, but at what cost?

From the Journal of Labor Research:

Using a variety of statistical techniques, we conclude that labor unions have reduced U.S. output by significant amounts -- trillions of dollars over time. Additionally, the employment-population ratio and the unemployment rate have been adversely affected by the presence of unions. From the very beginning, unionization materially lowered employment in the auto and steel industries, and union militancy in coal mining has contributed importantly to largely eliminating employment in this once large industry. While some individual workers have profited from unions, the aggregate economic impact is strongly negative.

Linky.

According to What do Unions Do?, unions decrease efficiency, increase the rate of firm death, lower development, and (most importantly) increase the cyclical instability and increase the length of downturns. Linky.

Professor of Economics Barry E. Hirsch finds in his research paper in the Institute for the Study of Labor (IZA), Research Paper Series:

Subsequent literature continues to find unions associated with lower profitability, as noted by Freeman and Medoff. Unions are found to tax returns stemming from market power, but industry concentration is not the source of such returns. Rather, unions capture firm quasi-rents arising from long-lived tangible and intangible capital and from firm-specific advantages. Lower profits and the union tax on asset returns leads to reduced investment and, subsequently, lower employment and productivity growth.

Linky.

Hey, unions may have been great in getting humane working hours and labor protections in the past. But they have outlived that usefulness. Giving strength to labor unions is a poor decision in general, and a terrible one in the midst of the recession. Of course, Obama has had all the labor support in getting elected, and supports this bill that goes against all of his stated goals of getting the economy running and creating jobs.

 

[Texas]

Just look to the auto-makers and steel industry to see the impact of unions in a globalised economy. . Obama is going to have a very hard time not giving in to the very Unions that were so important to his election but he is in so deep I don't think he has any choice.

 

[fuelair]

Briefly, the law:

Linky.

So this law will give unions more power and will create more unions. Now, before I would be debating the merits of using the non-secret card selection thingy. But I don't care about that at the moment (And the card thing doesn't make them union members, that only happens after they vote in a secret ballot on the union contract, but whatever). I care about this happening during a recession in which we all recognize the growing unemployment, shipping of jobs overseas, failing businesses. The US Chamber of Commerce President Tom Donohue warned Obama about the risk the passage of the bill early in his term would pose to the economy Linky. Trade unions accomplish providing job security and increased benefits for its members, which may sound like a good thing during the recession, but at what cost?

From the Journal of Labor Research:

Linky.

According to What do Unions Do?, unions decrease efficiency, increase the rate of firm death, lower development, and (most importantly) increase the cyclical instability and increase the length of downturns. Linky.

Professor of Economics Barry E. Hirsch finds in his research paper in the Institute for the Study of Labor (IZA), Research Paper Series:

Linky.

Hey, unions may have been great in getting humane working hours and labor protections in the past. But they have outlived that usefulness. Giving strength to labor unions is a poor decision in general, and a terrible one in the midst of the recession. Of course, Obama has had all the labor support in getting elected, and supports this bill that goes against all of his stated goals of getting the economy running and creating jobs.

Tried to explain that to my father for thirty plus years (I finally gave up on it and he died still believing the Teamsters were on his side - even though it was greatly their fault that his job (and a number of others) vanished).

 

[geni]

Would you like to keep those?

But they have outlived that usefulness. Giving strength to labor unions is a poor decision in general, and a terrible one in the midst of the recession.

In a free country people should be free to form and join unions.

Of course, Obama has had all the labor support in getting elected, and supports this bill that goes against all of his stated goals of getting the economy running and creating jobs.

Questionable. Unions tend to have the aim of moveing money towards the less well off and the less well off tend to spend it.

 

[Texas]

Tried to explain that to my father for thirty plus years (I finally gave up on it and he died still believing the Teamsters were on his side - even though it was greatly their fault that his job (and a number of others) vanished).

Every male member of my fathers family were teamsters. I had an uncle who was the Chief Organizer for all the Kansas City Teamster Locals. He went to jail in the 60's with Hoffa.

 

[kallsop]

Obama is going to have a very hard time not giving in to the very Unions that were so important to his election but he is in so deep I don't think he has any choice.

The teachers unions are about to get their $150B. The UAW ran out the clock on Bush, and you will be as shocked as I when they renegotiate for less strings on their handout

 

[gtc]

Just look to the auto-makers and steel industry to see the impact of unions in a globalised economy. . Obama is going to have a very hard time not giving in to the very Unions that were so important to his election but he is in so deep I don't think he has any choice.

The Australian Labor (sic) Party* has been in power for over a year now but they've managed not to concede too much to the unions so I think Obama should be able to do the same. Standing up to the loopier union demands will actually make him look good in the eyes of the voters.

*You have to be a union member to join the ALP and the unions get half the votes at the conferences to decide ALP policies.

 

[Thunder]

I honestly think that workers who are more secure in their jobs and feel that management respects them and appreciates their labor, tend to be more productive employees.

I know I enjoy my work more and tend to take more pride and do it better..when I know my boss notices what I do and has my back.

 

[Texas]

I honestly think that workers who are more secure in their jobs and feel that management respects them and appreciates their labor, tend to be more productive employees.

I know I enjoy my work more and tend to take more pride and do it better..when I know my boss notices what I do and has my back.

Unions set up an inevitable adversarial situation with management. It does not tend to be an incentive for management to "watch your back". Once a shop is unionized that becomes the union's job.

 

[leftysergeant]

Without the threat of a union action against them, most employers would feel themselves under no particular obligation to pay what a day's labor is worth.

Productivity is up and wages are down. That is not good for the ecconomy.

It was not the fault of the unions that our automakers decided to produce crap for cars.

 

[gdnp]

Without the threat of a union action against them, most employers would feel themselves under no particular obligation to pay what a day's labor is worth.

According to capitalism, "what a day's labor is worth" is the amount that you have to pay someone to get them to do it, not the value of what they produce.

Productivity is up and wages are down. That is not good for the ecconomy.

Agreed.

It was not the fault of the unions that our automakers decided to produce crap for cars.

US automakers have, for years, been producing pretty decent cars. I drive a 2000 ford Focus that cost me $14,000 that has lasted 90K miles with only routine maintenance and a couple of problems fixed under warranty. The mistake the US automakers made was producing the cars the US consumers wanted (SUVs) while conceding the much less profitable small car market to the Japanese, only to get stung when gas went to $4 a gallon and people changed their minds. Perhaps you think Toyota produces better cars, but their sales fell as much as GM in the last quarter despite making the now-popular hybrids.

If anything has screwed the US auto industry it is high health care costs. perhaps Obama will use the crisis to push a single payer system to relieve the auto industry of (directly) paying these costs and remove the shackle from the leg of the employee with a preexisting condition who can't risk switching jobs.

 

[Ziggurat]

Unions tend to have the aim of moveing money towards the less well off

No, they do not. They move money towards their members. The truly less well off (those with few marketable skills) get shut out of the labor market because of the increase in labor costs, and so get hurt by unions.

 

[Ziggurat]

US automakers have, for years, been producing pretty decent cars. I drive a 2000 ford Focus that cost me $14,000 that has lasted 90K miles with only routine maintenance and a couple of problems fixed under warranty. The mistake the US automakers made was producing the cars the US consumers wanted (SUVs) while conceding the much less profitable small car market to the Japanese

They did that because their labor costs meant they lost money on those cheaper cars, whereas the Japanese auto makers, even with plants in the US, were able to make a profit on those cars. Union contracts essentially left them with no choice but to focus on the high margin vehicles.

If anything has screwed the US auto industry it is high health care costs.

And yet, that didn't doom the US plants of those Japanese automakers.

 

[leftysergeant]

According to capitalism, "what a day's labor is worth" is the amount that you have to pay someone to get them to do it, not the value of what they produce.

Pretty sorry standard. A day's labor is worth a decent day's provisions.

US automakers have, for years, been producing pretty decent cars. I drive a 2000 ford Focus that cost me $14,000 that has lasted 90K miles with only routine maintenance and a couple of problems fixed under warranty. The mistake the US automakers made was producing the cars the US consumers wanted (SUVs) while conceding the much less profitable small car market to the Japanese, only to get stung when gas went to $4 a gallon and people changed their minds.

They have also concentrated a great deal of their advertising money on selling the idea that people NEEDED their main battle tanks to be safe on the highway.

If anything has screwed the US auto industry it is high health care costs. perhaps Obama will use the crisis to push a single payer system to relieve the auto industry of (directly) paying these costs and remove the shackle from the leg of the employee with a preexisting condition who can't risk switching jobs.

There are also the subsidies that some of the Southern states with Right to Starve laws have handed the non-unionized foreign manufactures to encourage them to locate there. The japanese automakers are getting a handout from those states and a subsidy from their own government in the form of single-payer health care.

It is NOT the free market that has made the Japanese more successful here.

 

[Ziggurat]

Without the threat of a union action against them, most employers would feel themselves under no particular obligation to pay what a day's labor is worth.

And how do you define "what a day's labor is worth"? Even without unions, employers learn quickly that higher wages attract higher skilled workers, reduce worker turnover, and increase productivity. Which is why so many non-union jobs pay well above minimum wage (including many professional jobs like lawyers and engineers). If employers don't learn that, they get eaten by their competition.

Productivity is up and wages are down. That is not good for the ecconomy.

Better than the reverse.

 

[leftysergeant]

And how do you define "what a day's labor is worth"?

A day's labor is worth a day's decent proivisions. It's that freaking simnple.

The snivelling little baby capitalists would not operate at a loss. Why then, do they shriek so patheticly about a minimum wage that still leaves working people struggling to make ends meet?

Even without unions, employers learn quickly that higher wages attract higher skilled workers, reduce worker turnover, and increase productivity. Which is why so many non-union jobs pay well above minimum wage (including many professional jobs like lawyers and engineers). If employers don't learn that, they get eaten by their competition.

Historicly, this has not been the case. There was no such thing as a middle class workjing man before there were unions. Before unions, middle-class was small and limited to large landowners and merchants.

The Japanese auto makers are surviving and competing successfully only because they are allowed to pay sub-standard wages and are subsidized by the states who elected the same Senators who are pitching a hissy fit over any loan to our domestic manufacturers.

 

[Ziggurat]

A day's labor is worth a day's decent proivisions. It's that freaking simnple.

No, actually, it isn't. You've only substituted one undefined term with another undefined term. What do you mean by "decent"? Can you fit a dollar amount to that?

The snivelling little baby capitalists would not operate at a loss.

Assuming they adjust appropriately. Which may require laying people off.

Why then, do they shriek so patheticly about a minimum wage that still leaves working people struggling to make ends meet?

Are you aware that Walmart favors minimum wage? That's right: the poster child for the evils of unrestrained markets likes minimum wage. Why shouldn't they? They pay above minimum wage already, so it doesn't affect them. But it does affect their local competitors.

Historicly, this has not been the case.

Yes, actually, it has been. Hemry Ford famously raised wages, not so that his workers could afford the cars (an illogical business model if there ever was one), but to reduce turnover and increase productivity.

There was no such thing as a middle class workjing man before there were unions.

You're confusing sequence with causation. A working middle class became possible once labor productivity reaches levels sufficient to produce the necessary wealth to support such a class. Technology and education increase productivity. Union are responsible for neither one.

The Japanese auto makers are surviving and competing successfully only because they are allowed to pay sub-standard wages

Actually, their wages are only a little below the big 3's wages (somewhere in the low 20's per hour). Why is that "substandard"? It isn't, unless you define "standard" as whatever the unions get, but that would be rather arbitrary.

 

[gtc]

Pretty sorry standard. A day's labor is worth a decent day's provisions.

Rubbish.

You could spend a month digging holes and filling them in again and it wouldn't be worth a cent. Paris Hilton could spend an hour at a fashion parade and it could be worth $100,000 in extra sales.

 

[gtc]

Historicly, this has not been the case. There was no such thing as a middle class workjing man before there were unions. Before unions, middle-class was small and limited to large landowners and merchants.

Oh brother.

 

[gdnp]

A day's labor is worth a day's decent proivisions. It's that freaking simnple.

Then clearly the foreign auto companies are paid a fair wage, since their workers receive a day's decent provisions.

The Japanese auto makers are surviving and competing successfully only because they are allowed to pay sub-standard wages and are subsidized by the states who elected the same Senators who are pitching a hissy fit over any loan to our domestic manufacturers.

These factors surely contribute, as does the overall superior quality of their cars (although as I said above US cars are not bad). You have left out another major factor, however: they are not shackled by union work rules (the classic and perhaps apocryphal example being the plug which comes out, stopping the assembly line, and everyone standing around for an hour because only an electrician is allowed to plug it back in). This allows greater flexibility and overall better worker productivity in the Japanese plants.