Posts Tagged ‘Labor Unions’

Job security and speaking truth to power

July 13, 2017

During the 20 years I reported on business for the Rochester (NY) Democrat and Chronicle, I was surprised at how many people were afraid to speak freely because of the consequences to their careers or chances of getting a job.

About the only people I ever met who were willing to speak as if they were free Americans were:

  • Self-employed professionals such as physicians and lawyers.
  • Self-employed craftsmen such as plumbers and electricians.
  • Owners of small businesses that served the public (not sub-contractors)
  • Tenured college professors.
  • Civil servants (provided they were speaking about their area of responsibility and not political issues).
  • Labor leaders and members of strong labor unions.

Many years ago I read David Kearns’ memoir of his years as CEO of Xerox Corp.  (I no longer have the book and don’t remember the title).  In one chapter, he described a meeting he held with workers at Xerox’s Webster, N.Y., plant about problems with a new model of copier.

He told how the president of the union local replied, “Why didn’t you ask us, Dave?  We could have told you it was no good.”

My impression is that Kearns thought he deserved credit for not getting angry at the union representative.   But, actually, what he should have done was to arrange to meet with him once every six or twelve months.

If you are in a position of authority, someone who will tell you the truth is invaluable.  But few in a position of authority want to hear inconvenient truths.  Hence functional stupidity.

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How much equality do we want?

January 9, 2017

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Grant that extreme economic inequality is a bad thing.  Grant that ever-increasing economic inequality is a bad thing.

Grant that complete equality of incomes is not feasible and maybe not desirable.  How much equality is enough?

The economist Friedrich Hayek wrote in The Road to Serfdom (as I recall) that it is impossible that people could reach a consensus on what each and every person deserves.   Once you reject complete equality, he  wrote, the only acceptable distribution of income is what results from the impersonal working of the free market.

A democratic government could never determine a distribution of income that is satisfactory to everyone, or even a majority, Hayek thought; if it tries, the result can only be gridlock and a breakdown of democracy.

But there are ways to reduce inequality that neither set limits on any individual’s aspirations nor give some group of bureaucrats the power to decide who gets what.   Some that come to mind immediately are:

  1. Prosecute those who get rich by lawbreaking.
  2. Set limits on unearned income.
  3. Break up monopolies.
  4. Empower labor unions and cooperatives.
  5. Provide good public services to all, regardless of income.
  6. Provide decent jobs for all who are willing and able to work.

What are your ideas?

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Unions face hard struggle in the age of Trump

December 3, 2016

unions2-12-3-2016

Leaders of organized labor in the United States face in Donald Trump what may be the most anti-union administration since before Franklin Roosevelt’s New Deal.

The New Deal gave labor unions a legal right to bargain collectively and enter into binding contracts.   Subsequently so-called “right to work” laws imposed on unions the obligation to bargain collectively even for workers who choose not to join the union.

Many observers expect the Trump administration and Republican Congress to enact a national right to work law.  Under such a law, workers could join a company with a union contract, refuse to join the union or pay dues and enjoy all the benefits of the contract.   Why, union leaders ask, would anybody join a union if they could enjoy all the benefits of union membership without any of the obligations?

Trump’s likely choice for Secretary of Labor is said to be Andrew Puzder, head of the parent company of the Hardee’s and Carl Jr. restaurant chains.  He is an outspoken opponent of minimum wage increases and of Obamacare.

Other contenders who’ve been mentioned in the press are Victoria Lipnic, one of two Republican members of the Equal Employment Opportunity Commission; and  Scott Walker, the fiercely anti-union Governor of Wisconsin.

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Union worker support for Democrats is eroding

December 2, 2016

President-elect Donald Trump is an enemy of organized labor.

He favors “right to work” laws, by which employees can enjoy the benefits of a union contract without having to pay union dues.

He once said that the U.S. economy is un-competitive because wages are too high, although he later backtracked.

He promised to appoint a Supreme Court Justice with the same philosophy as the anti-union Antonin Scalia.

He promised to revoke every executive order issued by President Barack Obama, which presumably includes orders enforcing wage standards for federal contractors and new rules for overtime pay.

So it’s not surprising that American labor unions made an all-out effort to defeat him in the recent.  Labor unions donated $135 million to anti-Trump political action committees, and spent an additional $35 million to get out the vote and other political activities.  AFSCME, the NEA and other unions sent out nearly 4,000 canvassers, who knocked on an estimated 9.5 million doors.

Exit polls indicate that Hillary Clinton carried the vote of union families by an 8 percent margin.  But this is not as good as it seems.  Four years before, Barack Obama won the vote of union households by an 18 percent margin.  In other words, Clinton was down by 10 percentage points.

Donald Trump did better than Mitt Romney among union voters, but his gains were less than Clinton’s losses.  A large number of union families either didn’t vote or voted for small-party candidates.

What wasn’t Clinton able to hold more of the union vote?  First, Trump made a direct appeal to them for votes of union members, which Republicans haven’t done in recent elections.   Clinton tried to appeal to college-educated moderate Republicans, which she did with some success, but not enough to offset the erosion of majorities from traditional Democratic constituencies.

Second, Trump made an issue of the Trans Pacific Partnership agreement, North American Free Trade Agreement and other trade agreements.  Clinton promoted the TPP as Secretary of State, but opposed it as a candidate.  Many factory workers blame the TPP, NAFTA and other trade agreements for loss of jobs to foreign countries.

I did not vote for Trump, but I think he is right about the TPP.  If he hopes to be re-elected, he’d better not break his word about opposing the TPP as he has so many other campaign promises.

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How the GOP honored Labor Day 60 years ago

September 5, 2016

GOP Labor Day 1956

A good question

May 19, 2016

Oil and Gas Pipeline Construction vs. Massive Public Infrastructure Construction: Why do the building trades unions want the former rather than the latter? asks Beverly Mann for Angry Bear.

American labor unions and the middle class

November 16, 2015

UnionsMiddleClassMay2015Source: Center for American Progress.

Union membership as a civil right

October 7, 2015

A new bill—the Workplace Action for a Growing Economy Act, aka the WAGE Act—would make the right to join a labor union a civil right.

Workers who are fired or discriminated because they are union members would have the same rights as workers who suffer racial or sex discrimination.

This would be a big change.  It would give individual workers a much stronger legal position than under existing labor law—in some

2.unions&sharedprosperityLabor union membership has been steadily declining—not, in my opinion, because American workers are satisfied with their wages and working conditions, but because they fear retaliation from employers.

Without the union voice, wages (adjusted for inflation) are stagnant and inequality is increasing.  If everybody who wants to join a labor union could do so without fear, I think this could turn around.

The WAGE Act was introduced by Senator Patti Murray, D-WA, and Rep. Robert C.  “Bobby” Scott, D-VA.  It was co-sponsored by Bernie Sanders and has been endorsed by former Secretary of State Hillary Clinton.

The middle class is the middle 60% of income earners

The middle class is the middle 60% of income earners

The bill has virtually nil chance of getting through Congress this year.  A similar bill introduced last year by Rep. Keith Ellison, D-MN, and John Lewis, D-GA, failed.  But it’s only by keeping the issue on the public agenda that this right can be won.

Firing an employee for union membership is at present an unfair labor practice under the National Labor Relations Act.   The best that an employee can hope for from the NLRB is reinstatement in the job and partial back pay years later, and the odds are against even that.

Under the WAGE Act, employees would have the right to sue in court and ask to be put back to work with no loss of pay or benefits while the case is pending.   If they won the case, they would get triple back pay, while the employer could face a $50,000 fine—$100,000 if it was a second offense.

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Why Americans need labor unions

September 5, 2015

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During the past 40 years, the productivity of American workers has continued to increase but their wages (adjusted for inflation) have barely increased at all.

Labor lawyer Thomas Geoghegan, in his new book, Only One Thing Can Save Us, says this is because corporate America has decided that it doesn’t want highly-skilled, well-paid workers; it wants low-paid, replaceable workers.

1.UnionsCPS_fig11

The middle class is the middle 60% of income earners, between the top and bottom 20%

Many evils flow from this.  Working people and the middle class have take on more debt in order to buy homes, pay for higher education or maintain their material standard of living.

Bankers and financiers find it more profitable to invest in debt than in the production of goods and services.

This results in the financialization and hollowing-out of the U.S. economy.

Geoghegan thinks the one thing that can save us is a labor union movement strong enough to win wage increases sufficient to keep up with the increase in the production of wealth.

This will give working people and the middle class enough buying power to generate a real economic recovery.

It will enable them to pay down debt.  Shrinking the debt industry will free up money to be invested in producing real goods and services.

Labor union contracts will make it harder to lay people off at will.  This will give employers an incentive to invest in training to make their workers more productive, which union apprenticeship programs can help with.

With more Americans earning good incomes, tax revenues will increase and governmental budgets will be more in balance.  With fewer jobs being shipped overseas, the U.S. trade deficit may shrink.

A politically powerful union movement will bring American politics into balance.  The USA will have both a left wing and a right wing rather than, as at present, only a right wing.

He advocates reforms to strengthen labor unions, including:
1.  Making union membership a civil right.
2.  Allowing members-only unions without NLRB elections.

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Readings for Labor Day weekend 2015

September 4, 2015

LaborDayWeekend

I was a member of Local 17 of the Newspaper Guild in Rochester for 24 years, and I’m still a strong supporter of the labor union movement.

Labor unions have their faults, just as churches, political parties and other institutions do, because they’re merely structures in which people can operate, for good or ill.

But they’re the only structure created for the specific purpose of defending the rights and interests of working people.  Without a strong and independent labor movement, there’s little to stand between individual working people and the structures of corporate and governmental power.

Even a weak labor union, if truly independent, is better than none.  Local 17’s contracts with Gannett Newspapers were highly favorable to the company, but the fact that there was a contract meant that the company could not operate arbitrarily.  Even if the company wrote the rules, it had to follow these rules.

Another thing that helped us was the strength of the International Typographers Unions and other printing trades unions, until they were wiped out by new technologies that didn’t require their skills.  Their high wages and good benefits set a benchmark that benefited all other employees in the building.

A lot of people used to take the gains won by labor unions for granted.  They thought that the eight-hour day, overtime pay, paid vacations, sick pay and medical insurance were something that employers granted out of the goodness of their hearts.  Now that all these things are under attack, I think some of these people are reconsidering.

Most Americans in labor unions are better off than Americans not in labor unions.   I hear non-union workers ask why the union members should have benefits that they lack.  I think they should ask themselves why they themselves shouldn’t have these benefits.

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Here are some articles about American labor and labor unions that I read recently and recommend.   If you have the time and interest, they might make for good reading over our Labor Day weekend.

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The fruits of Reagan’s attacks on the poor

August 19, 2015

Ronald Reagan’s attacks on the minimum wage, families being helped by welfare, those receiving unemployment insurance when the economy failed, became racialized attacks, and not viewed as attacks on the foundation of worker survival.

So in the 1980s, the real value of minimum wage drifted to unprecedented lows, states rolled back eligibility to, and benefit levels for, unemployment insurance and the foundation was laid to attack women who needed help in raising their children to force them into low-wage work.

Without providing any gains to American workers, Reagan mastered the appearance of worker advancement by succeeding not by having wages rise with productivity, as had been the case, but by having wages rise relative to the poor who could not find jobs, or could only find minimum wage jobs.

The silence of the labor movement in the sinking fortunes of the poor meant there was political space, for the first time since the 1930s, to have the economy improve and expand while the poverty rate increased.

==From A Future for Workers: A Contribution From Black Labor(Hat tip to Bill Harvey)

The passing scene – August 17, 2015

August 17, 2015

Seven Myths about the Greek Debt Crisis by Stergios Skaperdas, a University of California economics professor.  (Hat tip to naked capitalism).

An economist argues that (1) default would not be the worst outcome for Greece, (2) the troika (European Central Bank, International Monetary Fund, European Commission) is not trying to rescue Greece, (3) Greece’s problems are not caused by corruption and bad policy, (4) no Greek government could have carried out the troika’s policies, (5) the troika’s policies would not have benefited Greece, (6) exiting the Eurozone would not be catastrophic for Greece and (7) the Greek government in fact does have bargaining power.

Hillary Clinton Doesn’t Care That Much About Abortion Rights by Ted Rall for Counterpunch.

Instead of trying to persuade judges that abortion is a constitutional right, why don’t Hillary Clinton and other liberal Democrats support legislation to guarantee abortion rights?  Ted Rall thinks Democrats hold back because they cynically want to keep abortion alive as a issue.  But maybe they’re just timid.

Clown Genius by Scott Adams.   (Hat tip to Rod Dreher)

The creator of the Dilbert cartoons thinks most people probably would buy a used car from Donald Trump because his campaign demonstrates mastery of the classic techniques of salesmanship.

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What could a new kind of labor movement be?

April 10, 2015

Sam Seder’s interview of Thomas Geoghegan is about 45 minutes long. 

The rest of the running time is a repeat.

∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞∞

Thomas Geoghegan says American labor needs a new strategy, which would include the following.

  • The right to join a labor union or engage in labor action should be a civil right.
  • Workers should have the right to form unions that represent only their members, instead of a government-determined bargaining unit.
  • On the other hand, unions should strive for works councils in big organizations, which would represent all the employees and not just the union members.

American labor unions have been unable to stop “right to work” laws from being enacted in state after state—even in Michigan.

only_one_thing_can_save_us_finalThese laws forbid labor-management contracts in which an employer hires only labor union members, or requires new employees to pay dues to a union.  Yet, by law, the union contract must cover all the employees in the bargaining unit, regardless of whether they join or pay dues.

Thomas Geoghegan wrote in Only One Thing Can Save Us that it may not be possible to stop right-to-work from becoming national law.  To the average person, it doesn’t seem right that they should be forced to join an organization or make payments to it against their will.  And as fewer and fewer people have any experience with unions, the counter-argument becomes harder to make.

But if unions lose that battle, as well they might, all is not lost.  It is much easier to make the case for the right to join a labor union if there never are any circumstances in which union membership is compulsory.

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College for all is an economic red herring

April 9, 2015

wages-productivity-educationSource: The Atlantic.

SDT-higher-education-02-11-2014-0-06Senator Rick Santorum was right, or at least partly right.  Only a snob would think that you have to be a college graduate to be a success in life.

Now President Obama didn’t exactly say that in the 2012 campaign, not in so many words, but the focus of his policy is that high schools should make their graduates “college-ready” and that a college diploma is a key to economic success.

This is a red herring.  It is a diversion from the real economic problems, especially the erosion of the wage-earning middle class.

Thomas Geoghegan pointed out in his new book, Only One Thing Can Save Us, that when the President says lack of higher education is the cause of economic inequality, he is writing off the 68 percent of Americans age 24 to 64 who don’t have college diplomas and never will.

Suppose, he asked, that Obama and the Democrats succeed in pushing the college graduation rate up to 35 percent or even 40 percent, which would be hard to do.   Obama is still writing off the majority of working-age Americans.

The President is in effect telling high school graduates that the reason it is so hard for them to find decent-paying jobs is that they didn’t go to college.  And as for the the one in five male college graduates and one in seven women graduates whose income is less than that of the average high school graduate, it is because they attended the wrong college or majored in the wrong subject.

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Germany as a good example for the USA

April 8, 2015

I grew up with a stereotype of the Germans as prisoners of hierarchy, bureaucracy and rules, who would never be a match for us democratic, freedom-loving practical Americans.

But if that ever was true, our two countries have since traded places.

Were-You-Born-on-the-Wrong-Continent1Thomas Geoghegan, a Chicago labor lawyer whose writings I admire, wrote a book in 2010 entitled WERE YOU BORN ON THE WRONG CONTINENT? How the European Model Can Help You Get a Life about how Germany is an economic role model for the United States.

He still says so in his newest book, ONLY ONE THING CAN SAVE US: Why America Needs a New Kind of Labor Movement.

In Germany, Geoghegan wrote, the laws, strong labor unions, worker representatives in management make it difficult to fire anybody.  So layoffs are a last resort, not a first resort.

German management is forced to concentrate on figuring out how to get the most out of the work force, not on making workers powerless and replaceable.   The result is that German corporations invest in lifelong learning for their workers, on the justified assumption that they’re going to remain with the same employer and become permanent assets to the firm.

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Replaceable workers or productive workers?

April 7, 2015

CEOs of American companies complain of a lack of skilled workers and the lack of job training.

But if you look at what most of them do, and not what they say, they don’t really want productive workers.  They want replaceable workers.

only_one_thing_can_save_us_finalSo argues Thomas Geoghegan, a Chicago labor lawyer, in his outstanding new book, ONLY ONE THING CAN SAVE US: Why America Needs a New Kind of Labor Movement.

One obvious example of this is Boeing’s decision to have its new Dreamliner made by inexperienced, low-paid workers in South Carolina rather than members of the International Association of Machinists in Seattle.   They had production and quality problems in South Carolina, but their priority evidently was to get away from the union.

Now the same management philosophy is being applied to public schools, universities and hospitals.   Well-trained, well-paid professionals are harassed, laid off and replaced with inexperienced newcomers.

If you define efficiency as that which is most convenient for managers, there is something to be said for this.  An ignorant subordinate is less likely to give you an argument than an experienced and skilled subordinate.  It is easier to treat people as replaceable parts if they lack knowledge and opinions.

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American labor unions and the future

January 26, 2015

The New Deal is regarded as the emancipator of the American labor union movement.  By giving Americans a legal right to bargain collectively through labor unions of their own choosing, the National Labor Relations Act gave unions a recognized place in society.

Under the NLRB umbrella, American labor unions in the 1930s and 1940s became greater in size and power than they ever were before or have been since.

But Stanley Aronowitz in his new book, THE DEATH AND LIFE OF AMERICAN LABOR: Toward a New Workers’ Movement (2014), said that the NLRB in the long run proved a trap.

aronowitz.death&lifeamericanlabor03,200_Aronowitz said that unions agreed to restrictions on their only weapon, the strike.  During the course of a contract, unions themselves were responsible for suppressing unauthorized strikes.

Employers became adept at using the NLRB to thwart union organizing.  In the interim between a petition for a union election and the election itself, they could weed out the union supporters (although this was technically illegal) and threaten and propagandize the employees.

Labor leaders gave up the goal of transforming society in return for place at the table where decisions about the U.S. economy were made.  But they didn’t even get a place at the table.

Over the years, new laws weakened union rights and imposed new restrictions.  Union leaders became less and less able or willing to use their basic weapon—the strike.  Union membership is below 11 percent of the American work force, the lowest level since before the New Deal.

Aronowitz, a professor at City University of New York and a former factory worker and union organizer himself, wrote that if the labor movement is to survive, workers and labor leaders must break out of old ways of thinking.

They need to engage in direct action, outside the NLRB framework, as has was done in the recent Walmart and fast-food walkouts.

Aronowitz noted that these actions were taken without union recognition or expectation of a contract, but were effective nonetheless in forcing management to respond to workers’ demands.

Unions should not agree to contracts with no-strike provisions, he wrote.  Or, if they do, only as a last resort and for a limited time.

I always thought that the Walmart and fast-food workers, who are continually at the brink of destitution, showed great courage by defying their employers like that.  I wouldn’t have thought it possible if it hadn’t happened.  Maybe in this case freedom really is just another word for nothing left to use.

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The passing scene: January 4, 2015

January 4, 2015

Scavengers by Adam Johnson for Granta.

Adam Johnson walked down the stairs of his North Korean tourist hotel because he did not trust the elevator, and discovered that most floors of were unoccupied and scavenged for furnishings in order to keep up appearances on the few floors on which the tourists stayed.  This is one of the glimpses his article provides of the reality of life in North Korea.

Remembering the Russian Orthodox Priest Who Fought the Orthodox Church by Cathy Young for the Daily Beast.

Father Gleb Yakunin, a Russian Orthodox priest who died on Christmas, fought for democracy, Christian values and freedom for all religions against Communist totalitarianism and Putinist corruption.  He was defrocked twice for protesting and exposing the ties of the Russian Orthodox church with the Soviet government.

Religion in Latin America by the Pew Research Center.

Pentecostalism is on the rise in a historically Roman Catholic region.  The worldwide spread of Pentecostalism may be the most significant religious development of our time.

Tayloring Christianity by Matthew Rose for First Things.

A Secular Age? by Patrick J. Dineen for The American Conservative.

Secularism in the USA does not war on religion, the way anti-clericalism has done in France, Mexico and other countries.  American secularists simply want religion to be an individual matter rather than the organizing principle of society.  In a way, American secular liberals are the ultimate Protestants.

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Which side are they on?

December 9, 2014

The Republican Party leadership is explicitly anti-union because they recognize that unions are a key support for the Democratic Party and a key opponent of the right-wing corporate agenda.

It would seem logical to think that President Obama and the Democratic leaders would defend organized labor, one of the pillars of their party, but they don’t.

RTW_protestAs Thomas Edsall pointed out in his New York Times column, the Democratic leadership has been not only indifferent to labor’s goals, but sometimes actively hostile.

Republicans such as Scott Walker and Chris Christie have persuaded the public that low wages, job insecurity and lack of benefits are normal, and that a policeman who gets a pension enjoys an unfair privilege at the public expense.

Democratic leaders do little or nothing to counteract this.

The problem is not that Obama, Harry Reid, Nancy Pelosi or the other Democratic leaders are naive or weak, or that the Republicans are obstructionist (they are, but that’s not the problem).

The problem is that the goals of the Democratic leaders are different from what they say and from what their core supporters want.

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The history and meaning of Labor Day

September 1, 2014

Labor Day, like Martin Luther King Day, arose out of a struggle for human rights—the right of workers to bargain collectively for better wages, hours and working conditions.

Thanks to the struggle of labor unions, we Americans (some of us) have an eight-hour day and 40-hour week, weekends off, paid vacations, workers compensation for injury on the job and contracts defining the obligations of employers and employees.   And if fewer and fewer of us enjoy these rights, it is because of the eroding power of organized labor.

Here are links to articles on the history of  Labor Day and North American labor struggles.

Labor Day History: 11 Facts You Need to Know by Nate Hindman and Craig Kanally for Huffington Post.

When Labor Day Meant Something by Chad Broughton for The Atlantic Monthly.

The Forgotten Meaning of Labor Day by Jack Marshall on his Ethics Alarms web log.

The First Labour Day in Canada on the Canada’s History web site.

Debunking the Myth: The True History of Labor Day by Eugene E. Ruyle for Popular Resistance.  Why the U.S. labor holiday is not on May Day.

Organizing “The Organized” Is Now the Key to Union Survival by Steve Early for Counterpunch.  (Hat tip to Bill Harvey)

 

The logic of being required to pay union dues

July 1, 2014

At first glance, it seems wrong to require people who don’t believe in labor unions to pay union dues just to be able to work for an employer with a union contract.   Here’s how I see the logic.

unionsShould workers have the right to bargain collectively and make contracts with employers?  Under U.S. law, workers have that right.  It would be absurd to say that investors have the right to join together to form corporations, but workers do not have the right to join together to form unions.

If there is a union contract, should the union have the power to say who is hired and who isn’t?  Under U.S. law, unions do not have that right.   If they did, they would, in effect, be the employer.

Should everyone who is hired by a union employer be covered by the union contract?  Under U.S. law, they are.  If not, the contract would be meaningless.

Should someone who gets the benefit of a union contract pay the same dues as fellow employees for union representation.  I would say, “yes,” but yesterday the U.S. Supreme Court said “no,” at least as regards home care workers and public employee unions.

LINKS

Supreme Court rules against home care workers unions by Laura Clawson for Daily Kos.

Supreme Court: It Could Have Been Worse by David Cole for the New York Review of Books.

Alito and the expected pretzel on Psychopolitik.

Six Groups That Are Reinventing Organized Labor by Josh Israel for Think Progress.   In the light of recent Supreme Court decisions restricting labor and empowering business, some worker groups are organizing without the protections and restrictions of U.S. labor law.

People vs. money: the playing field is tilted

June 9, 2014

A labor union is a group of working people working together for a common purpose.   A corporation is a pool of money which has been combined for a common purpose.

In American history, going back to when Thomas Jefferson was Secretary of State and Alexander Hamilton was Secretary of the Treasury in George Washington’s cabinet. there have been two sources of power—people and money.

People power is irresistible when it has been mobilized, but people are prone to be apathetic and short-sighted.   Money power is constant.   It never is bored and never is blind to its own interests.  It is able to tilt the playing field.

Public opinion polls show that a majority of Americans want policies that are the opposite of what millionaires want, yet Washington officials and pundits accept the corporate agenda and treat those who represent public opinion as a lunatic fringe.

minimum_wage_onpageGovernment strictly regulates the internal workings of labor unions to make sure that they are operated honestly and democratically.   No such regulation applies to corporations.

Attorney-General Eric Holder has admitted that the Obama administration has not investigated financial fraud in the biggest banks and Wall Street investment firms because they are too important to the economy.   Imagine someone in the Kennedy administration saying this of Jimmy Hoffa and the Teamsters!

Right now a battle is going on for the rights of low-wage workers who frequently are, among other things, victims of wage theft.  Owners of fast-food restaurants commonly withhold pay for hours worked.  This is illegal.  Progressives are trying to put a stop to it.   Corporate executives are trying to change the laws to make it more difficult to sue.

The big problem for organized workers is that their immediate employer is not always the source of the problem.  Fast-food franchisees operate on extremely narrow profit margins, because of the conditions set by the franchising companies, and (arguably – I don’t really know) may not be able to afford to pay more than they do.  But the battle of the unions is with the franchisees, not with the real decision-maker.

Contract manufacturers in Asia operate under the same conditions.  Their profit margins, as set by their customers in North America and Europe, are so small that (arguably – I don’t really know) they may not be able to pay more than they do.   This is another way that the playing field is tilted against workers and their unions.

Another corporate abuse is the use of private equity to loot corporations at the expense of workers.  The basic idea of private equity is that investors buy out a company’s stockholders and operate it themselves.  In principle, there is nothing wrong with this, if they think they can manage the company better than the previous owners.   Sometimes they succeed in doing this, which is fine.

In practice, private equity investors frequently are looters.  The investors have the company pay themselves or their other companies big fees for management services, consulting services and other fees.  Typically they buy the company with borrowed money, so their own cost is small.  They sell off assets for a quick profit, lay off employees and pocket quick profits while leaving the company a mere shell.   Jimmy Hoffa would never have been allowed to get away with stuff like this.

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What happened to the labor movement?

May 1, 2014

Hat tip to Bill Harvey.

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Why franchisees should organize

March 19, 2014

I’ve written about low wages and poor working conditions at fast-food restaurant chains, but the fact is that a humane business owner who is a franchisee may not be in a position to treat employees humanely.

Franchisers of fast-food restaurants impose strict controls on franchisees, including the prices that they charge.

So if McDonald’s (to take a hypothetical example) says the price of a double cheeseburger is a dollar, and it costs more than a dollar to make the double cheeseburger, the “owner” of the individual McDonald’s restaurant loses money.

I put “owner” in scare quotes because a franchisee does not have the self-determination of a true owner.  Under a truly independent business owner, the franchisee is not free to raise or lower prices in response to supply and demand.

The effect of unionization of fast-food workers or a higher minimum wage will be to squeeze franchisees while the effects on franchisers at the top of the economic food chain will be minor and indirect.

The answer, as Martin Longman wrote in the Washington Monthly, is for franchisees to unionize to protect their own interests.   As Longman pointed out, franchisees typically pay thousands of dollars just for the right to the franchise, basic business decisions such as prices are made for them, and they often have to buy basic supplies from suppliers designated by the franchiser.  They are in much the same situation as sharecroppers in the Old South in an earlier era, and have just as little ownership rights.

Everybody who is in a position to be squeezed by giant corporations — employee, franchisees, suppliers — has a right to organize collectively to equalize the bargaining power.   It is not in the interest of franchisees and suppliers to be shock absorbers between these giant corporations and the workers who make their profits possible.

If franchisees organize, their organization would of course not be called a “union” [1].  It would be called an “association” or “federation” or something like that.  But the purpose would be the same.

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The case against labor unions

February 16, 2014

caseagainstunions

I wonder which of these arguments convinced workers at a Volkswagen plant in Tennessee to vote against being represented by the United Auto Workers, even though management had no objection to the union.  Or maybe the workers accepted the argument that union representation would kill Tennessee’s low-wage strategy for industrial development.

Click on Anti-Union Voce Will Kill New Tennessee Production Line by Moon of Alabama and The Completely Baffling Tale of the Tennessee Auto Workers by Charles Pierce of Esquire for background.

Also, Auto union loses historic election at Volkswagen plant in Tennessee by Lydia Depillis of the Washington Post. [added 2/17/14]

Also, A Titanic Defeat by Eric Loomis for Lawyers, Guns and Money. [added 2/19/14]

Click on Leftycartoons for more Barry Deutsch cartoons.