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Posted at 1:53 PM ET, 01/19/2011

What does it mean to be pro-labor when labor is in decline?

By Ezra Klein

gdplaborproblem.png

Here's the puzzle: As you can see in the graph above, America has done a better job keeping GDP up than almost any other developed nation affected by the Great Recession. But it's done a far worse job keeping unemployment down. Why?

Various economics blogs have proffered various answers in recent days, but I think David Leonhardt has a good take on it today: America has a very weak labor union movement. That isn't responsible for the high unemployment directly, but it indirectly led to fewer policies that would've saved jobs and more policies that focused on boosting demand through tax cuts and spending incentives. In Germany, by contrast, there was an immediate effort to pay employers not to fire workers, and it seems that was extremely successful.

This ties into something I've been thinking about ever since reading this post on the absence of a pro-labor left in political commentary. I have my issues with the labor movement -- and, more specifically, with the detailed, rules-oriented contracts it favored for much of the 20th century -- but I consider myself extremely pro-organized labor, for three primary reasons:

1. Workers need representation inside the workplace. People often think about this in terms of bargaining for wages and benefits, but it also gives workers leverage when they have safety concerns or other grievances, and helps them get listened to when they have ideas and opinions about how the business should be run. In part because of this, and in part because they're paid higher wages, there's a lot of evidence that unionized workers are more productive than non-unionized workers, and there's even evidence that the sort of security that unions offer workers can make workers more innovative, as they have less to fear from a new idea failing to pan out.

2. Corporations should not rule the economy on their lonesome. John Kenneth Galbraith thought that the tendency of capitalism was toward bigness. Sectors might start out with lots of small competitors, but they eventually come to be dominated by a few large firms. The type of competition that then emerged, he said, was between great powers: big producers vs. big retailers vs. big government vs. big unions. This isn't some crank theory: Even Robert Rubin has come to endorse it. "If you believe in a market-based system," he said, "the system is a negotiation between two people who can really negotiate with each other. If one side has no negotiating power, that isn't really a market-based system. Its an imposition of one on the other."

It's all well and good for corporations to check one another, but there should also be a force looking out for the interests of workers. Unions have traditionally played an important role in everything from shaming corporations for awful safety and environmental practices to shareholder governance. Labor isn't right in every fight it picks, but it's important that there's someone around to pick these fights.

3. The political system needs unions. Without unions, there's really no well-funded, highly sophisticated, extremely organized actor speaking on behalf of workers, either union or non-union. But there are plenty of such actors speaking on behalf of different industries and corporations, and there are plenty of actors speaking on behalf of businesses writ large (the Chamber of Commerce, for instance, or the Business Roundtable), and if they're on their own, the political system becomes overly responsive to their voices. I'm not against government hearing from the business community, of course, but I don't want American politics to primarily be a conversation between politicians and business interests. We're already closer to that than I'd like, however, and I worry that the post-Citizens United world where corporations can anonymously dump unlimited amounts of money into any election they please is one in which we're going to move further in that direction still.

All that said, I can't tell a plausible story in which labor reverses its decline. Card check can't pass (at least right now), and I'm not convinced it would change density that much even if it did. The bigger problems facing unions -- a shift away from industrial production, low-wage competition from developing nations, a much more global economy, etc. -- are not going to go away, and I've not seen any reason to think labor will come up with a way to overcome them. Groups like Working America, which are trying to form an interest group on behalf of workers that looks more like AARP than like a traditional union, are growing fast, but I don't see where they'll ever get the money to really throw their weight around.

If anything, the reverse seems to be happening: As labor loses ground, it becomes more reviled. People stop thinking about what a union could do for them and begin resenting what it's doing for others. You're seeing some of this with the anger at public-employee unions right now. How much of that anger is authentic and how much of it is because there are a lot of politicians and organizations that spend a lot of money and capital attacking labor is a difficult question, but it's not clear that the answer even matters.

I've written this before, and have not heard any replies that made me much more optimistic. I've also asked this question of labor leaders, and come away as depressed as when I went in. I don't write about the issue more because I have nothing new to say about it. "Labor: Still important, still in bad shape, and still with no obvious savior in sight" isn't a very interesting blog post. But as I look around at the economy and the political system, I certainly don't think the working class needs fewer powerful advocates.

Graph credit: New York Times.

By Ezra Klein  | January 19, 2011; 1:53 PM ET
Categories:  Unions  
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Comments

Couldn't agree more.

Posted by: bmoodie | January 19, 2011 2:18 PM | Report abuse

Unions are blasphemy, and in the case of public-sector unions, doubly so, as Holy Writ teacheth. Draw near, attend ye, and hear the Gospel according to St. Ronald:

1. Everything private is better than anything public. 2. So long as one of our brothers or sisters, somewhere, is covered by a collective bargaining agreement, none of us, anywhere, is truly free.

Here endeth the lesson. And the people say "Amen".

Posted by: davis_x_machina | January 19, 2011 2:25 PM | Report abuse

If unions have not done an effective job advocating for the working class, why would its continued decline have any effect on the working class?

Posted by: brownm1 | January 19, 2011 2:26 PM | Report abuse

Historically, unions played a pivotal role in the growth of the middle class. They improved safety and protected workers from arbitrary decisions by management. They made companies more profitable and efficient. But those days are gone. Today, unions are a drag on the economy. Companies have learned that a safe work environment saves the company money in the long run. They have also learned to reward the most productive workers and to get rid of the least. Unions just get in the way of that. Card check will not help the unions because enough people are aware of the negative consequences of being represented by people who have an adversarial relationship with a companies management.

The only hope for unions is if their primary mission transitions from protecting the weakest workers to educating and streamlining the work force to make American companies more competitive in a global marketplace.

Posted by: cummije5 | January 19, 2011 2:37 PM | Report abuse

cummije5,

they're not only a drag on the economy they're a drag on the individual productivity of people. Just a brief example during my day today. My daughter had been struggling in Honors Algebra. We got a note home from the teacher on December 17th stating that. We called December 17th, December 28th and January 4th to the guidance counselor that we wanted to have a meeting with the teacher to go over what we could do to help my daughter better understand the subject matter. NO RESPONSE from the teacher. The guidance counselor AND the Head of the Math Dept apologized to us today. The teacher gave no such apology and brought her union rep with her to boot. Why was that necessary? Was the school going to fire her on the spot? She couldn't even have the decency to introduce herself to us when she walked in the door (basically after she was there for 5 minutes we had to ask, "Who are you" and they did nothing but make excuses as to why she didn't call us back eventually stating that she didn't call us by the middle of January because we had moved our daughter out of her class on January 14th. Well DUH. Yes unions are really helpful!

Here's hoping that when Governor Christie institutes merit pay that she's one of the first to go.

Posted by: visionbrkr | January 19, 2011 2:52 PM | Report abuse

You forgot also that unions are the most effective way to make sure company profits are distributed to all employees, not just those at the top.

The business world has really become a culture of excess, and as CEO pay has gone to more and more unjustifiable extremes, we've seen them become more contemptuous of the shareholders, the bondholders, the employees, and the long-term success of the company itself.

Unions were a bulwark against that, and it's not coincidence that corporate malfeasance has gotten to economy-crashing levels without the pressure from unions powerfully and publicly demanding a fair share of profits be distributed to ALL those who made success possible.

Posted by: theorajones1 | January 19, 2011 2:56 PM | Report abuse

Do you support forcing someone to join a union who doesn't want to?

Posted by: cdosquared5 | January 19, 2011 2:59 PM | Report abuse

btw the "they" making excuses was the teacher and her union rep. The head of the Math dept and the guidance counselor were silent during that entire episode.

If we got rid of tenure teachers like her would actually have to be good at what they do as opposed to being able to just stick around for a while.

I wonder how much education in this country would improve then?

Btw before i get accused of hating teachers her new teacher is fantastic and my daughter is now understanding the subject matter after only a few days being taught by him. She goes for extra help and we're getting a tutor to help her more.

Exactly what do the poor do when they have failing teachers that don't care about their students?

Another sad lesson to be learned for sure.

Posted by: visionbrkr | January 19, 2011 3:01 PM | Report abuse

"there's a lot of evidence that unionized workers are more productive than non-unionized workers, "

I've never seen any evidence of this in my own dealings with union versus non-union workers, and I'd be interested in how you would explain the differences between the performance of the American car makers with unionized workforces in North America versus the foreign car makers with non-union work forces. My understanding of the economics is that the primary cause of the American car makers financial problems is their cost of labor.

Lastly, you will have a hard time making the case for public sector unions as long as things like the "rubber room" in the New York City Public Schools exist.

http://www.newyorker.com/reporting/2009/08/31/090831fa_fact_brill

Posted by: jnc4p | January 19, 2011 3:08 PM | Report abuse

Ezra,

Unions are a difficult point for people on the left.

A key issue here is next best solutions – or very next best – or worse than holding out and trying for better solutions.

For every benefit you point to from strong unions, I think I could come up with just as much benefit or more, and at lower cost, via non-union solutions (free universal pre-school and college, or high quality skill training, to bachelors degree, including night and weekend programs, and with coverage for living expenses, more progressive taxation, schoolfare, as opposed to welfare or workfare, free universal single payer health insurance, prohibiting corporate bribes, I mean donations, better workplace safety regulation, incentives and protections for whistle blowers, automatic registration to vote when filling out any government form like taxes, and automatically sent mail ballot for every election no matter how small, subsidies for the ginormous positive externalities of objective, quality, investigative and research journalism, etc., etc.) In other words, better solutions, that have far lower LONG RUN NET costs, or harmful side effects, solutions that in the long run not only greatly improve the standards of living of the poor and middle class, they also greatly improve productivity and the size of the pie.

Unions are a monopoly, a monopoly of labor, so immediately you have all of the inefficiencies and problems that come with a monopoly (or a high degree of monopoly power). Now, sometimes the benefits of a monopoly far outweigh those costs, like if the economies of scale are so enormous that the product can be produced vastly cheaper with one giant company, or facility, than with many much smaller ones. But even then, if you allow the monopoly you do so very carefully, with strong regulation, or if it's just too hard and costly to regulate and monitor well you have the government provide it.

So, you have to be careful with unions. If you have a situation where someone who didn't even make the effort to earn a high school diploma makes well into six figures counting benefits, as was not that rare at one time (adjusting for inflation) when unions were very strong, then you have a severe disincentive for people to make the effort to become educated and skilled so that they can really produce far more wealth for the economy.

Over the long run, the actual size of the pie, as opposed to how you redistribute the pieces, as well as how fast science and medicine advance, is ultimately dependent more on the level of education and skill of society more than anything else. I'm just saying, you want to be very careful with anything that risks substantially lowering the incentive to make the effort to become educated and skilled.

Posted by: RichardHSerlin | January 19, 2011 3:34 PM | Report abuse

And also, these arguments that not everyone can get a college degree, I'm very confident from my experience as an educator, with unskilled jobs (KFC Veteran), and in life, that the vast majority of people can become much more skilled and educated with effort, and much more productive, and really set a positive example for their kids, who they can start early on that road.

Some people really do have serious handicaps, and they should be helped generously, but this is a relatively small minority.

And, yes, the economy will have no problem over the long run absorbing and utilizing many more skilled educated people. The day the world gets into serious short supply of unskilled workers is the a day when the world is extremely wealthy (and where there will be very strong ability, and incentive, to have robots do this unskilled work, so people don't have to).

Posted by: RichardHSerlin | January 19, 2011 3:46 PM | Report abuse

Two of the fastest growing sectors of the economy are education and health care which are more unionized than normal.

As corporations steadily outsource or offshore most jobs the percentage of union workers in health care and education may grow.

Posted by: foobar5 | January 19, 2011 3:50 PM | Report abuse

It is almost amusing to see someone advocate for labor unions. It seems as if folks in the media, politics and academia favor labor unions while the working people of America are rejecting them. Recent polling information indicates that a plurality of the public has an unfavorable view of labor unions. Back in 1999 Gallup asked whether survey respondents would like to be union members and about 21 percent said yes. Not too long ago a Zogby poll asked the same question with roughly the same result. In a system where union recognition depends on winning a majority of the vote in a secret ballot election these numbers aren't encouraging to those who long for a rebirth of unions. Every year the National Labor Relations Board conducts fewer and fewer union representation elections because the unions have come to realize that their chances of winning are very slim and they only want to invest in things that look like sure winners. In 2001, then AFL-CIO president John Sweeney was quoted as saying, "If we don't begin to turn this membership decline quickly and almost immediately the drift in the other direction is going to make it virtually impossible to exist as a viable institution and to have any impact on the issues we care about." One might have wished that instead of saying "issues" he had said "workers," but that is off point. In 2001, the union percent of the workforce was 13.5. On Friday, January 21, 2011 the Bureau of Labor Statistics will release its annual report on union membership. It is anticipated that the union percent of the workforce will fall below 12. How long will it be before the AFL-CIO issues a statement saying that it is no longer a viable institution and is incapable of having an impact on the issues it cares about?

Posted by: DavidDenholm | January 19, 2011 3:59 PM | Report abuse

"Companies have learned that a safe work environment saves the company money in the long run."

There's a sucker born every minute.

"My understanding of the economics is that the primary cause of the American car makers financial problems is their cost of labor."

Your understanding of the economics is incorrect:

http://www.cbsnews.com/stories/2008/12/19/business/main4677571.shtml

The primary cause of American car makers' financial problems was their reluctance to unify their global operations, and the costs of finally doing so hit them during the worst point of the financial crisis. The UAW didn't choose the vehicles that Ford/GM/Chrysler built.

(A secondary cause was the legacy cost of benefits that were accepted in lieu of wages by previous generations of workers, but as the linked piece notes, those legacy costs for foreign makers were largely covered by their respective governments, and those foreign makers have also benefitted from bribes -- or, if you prefer, incentives -- from state treasuries.)

Posted by: pseudonymousinnc | January 19, 2011 4:10 PM | Report abuse

"helps them get listened to when they have ideas and opinions about how the business should be run. In part because of this, and in part because they're paid higher wages, there's a lot of evidence that unionized workers are more productive than non-unionized workers, and there's even evidence that the sort of security that unions offer workers can make workers more innovative, as they have less to fear from a new idea failing to pan out."

If union membership increased worker innovation and productivity, relative to the extra costs in terms of higher comepensation, then businesses would already be union friendly.

Business owners - the people who stand to lose a lot of money if they are wrong on the union/non-union question - appear in general to disagree with you.

Posted by: justin84 | January 19, 2011 4:15 PM | Report abuse

"Recent polling information indicates that a plurality of the public has an unfavorable view of labor unions"

What does it mean to say a "plurality" has an "unfavorable view"? Surely this is a binary question, yes? Or is this a case where four different possibilities are possible (e.g. "favorable", "unfavorable", "neutral", or "no opinion") and "unfavorable" happened to get 26%?

Be suspicious of people who use the word "plurality". Unless all the choices and percentages are provided, the word is not terribly enlightening. But the word choice is a flag that the desired point-of-view has less than majority support, else the word 'majority' would be used.

Posted by: rick_desper | January 19, 2011 4:34 PM | Report abuse

"The primary cause of American car makers' financial problems was their reluctance to unify their global operations, and the costs of finally doing so hit them during the worst point of the financial crisis. The UAW didn't choose the vehicles that Ford/GM/Chrysler built."

While I agree with you that management of the Big 3 was uninspiring, I would disagree that the UAW didn't choose the vehicles Ford/GM/Chrysler built.

These quotes are strongly linked:

"GM and Ford depend more on light trucks and SUVs for profit than does the typical Asian automaker."

"GM spends $2,500 more than its Japanese rivals to build each car and truck in the U.S. ... It's a structural rigidity that GM and Ford face because of their union contracts"

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ar0Cm.CPxVWM&refer=top_world_news

What type of cars would you focus if your costs were typically $2,500 above your competitors? Low margin or high margin vehicles? Okay, what type of high margin vehicles were in high demand from 1990-2006? Trucks and SUVs.

If you believe Wagoner - certainly a biased source - stylists went for bland designs as they were less likely to be spectacular failures.

Another important pair of quotes:

"Toyota and Honda introduced fuel saving cars... models that proved popular in the U.S. as gasoline prices reached a record $2.28 a gallon"

"Such innovations were fueled by profits"

Who knows what would have happened without organized labor, but at a minimum the UAW reduced corporate flexibility and biased production in favor of high margin trucks and SUVs.

Posted by: justin84 | January 19, 2011 4:38 PM | Report abuse

"If union membership increased worker innovation and productivity, relative to the extra costs in terms of higher comepensation, then businesses would already be union friendly."

You presuppose a degree of wisdom on the part of management that we have no evidence of. In any case, you're not controlling for cost. It all depends on how you're measuring productivity. Our primary measure is output per person, but a business manager would probably prefer to consider output per dollar spent. It could certainly be the case that union membership increases the former quantity while busting unions would favor the latter.
At least that is the perception. Sometimes the perception is but an illusion, as we famously saw at Circuit City in 2007-2008.

Posted by: rick_desper | January 19, 2011 4:40 PM | Report abuse

> visionbrkr: Your anecdotal stories are are useless.

I am in a union and am deeply ambivalent about it. We unionized our workplace, and now I suspect the only reason the union took us in was to get more folks paying to dues to support their Ponz-like pension plan.

On the other hand, without the union our stupid bosses (Live Nation if you must know) would have continued to try to erode the quality of our jobs. The company, for example, cancelled our health insurance without informing us (one day it was, the doctor was all "sorry, you're no longer insured), started sending us home before our shift was up, etc. So we organized and won.

FU if you don't like it. At least we had the balls to take things into our own hands, unlike you whining p**&^ies out there that call yourselves conservatives.

Posted by: nickthap | January 19, 2011 4:49 PM | Report abuse

The problem is that corporations own the political system, despite what Faux news says. They can prevent any policy that would allow for a vibrant labor movement.

There is no reason we cannot have an industrial policy similar to Germany. No reason we have to accept competing (on cost) with (sometimes enslaved, sometimes children) foriegn workers who earn pennies an hour. No reason we have to accept all the other negative externalities of our cheap labor at any cost policies.

But, the political system has choosen -- for now. Labor could adapt, but it will not have the chance as long as organizing is impossible.

Posted by: rat-raceparent | January 19, 2011 4:59 PM | Report abuse

The other thing people who are not in unions don't get are the opportunities for growth and learning. My union sponsors tons of training sessions, and you can learn different skills that are used in different parts of the overall trade. Of course, people who don't understand "trades" and how they work will never understand unions. These are people who think that college is the only pathway to earning a living. In many trades, you'd much rather have a union person than a scab (think electrical, think machinists that work on weapons systems).

Did you anti-unionists realize that most of the intensely skilled machinists are union workers, and that Northrup Grumman, Boeing, etc, couldn't survive without them? Yeah, let's oursource that to the Chinese in the name of union-busting (which is really what oursourcing is really about).

These people are more skilled than most of you could ever dream of being.

Remember this: as an individual you are powerless against your organization (unless you find some incriminating evidence and turn whistleblower).

Posted by: nickthap | January 19, 2011 5:07 PM | Report abuse

Unions are monopolies on providing labor. Imagine if you started a grocery store, but you could only by oranges from one supplier. It's the same concept with how labor unions work against companies.

By increasing wages for a percentage of workers, Unions cause fewer workers to be hired, hurting growth and causing higher unemployment.

By negotiating deals that were good in the short term, union retirement benefits are destroying major corporations and local governments that have fallen under their poorly planned benefits arrangements.

The public employee unions are the sickest of all. Who are they protecting themselves from- the voters, in other words, themselves? They vote themselves raises. We have police officers making $350k in California.

This is not to say that management of companies that work with unions are particularly bright or kind or admirable in any way. Probably the best solution to this is employee ownership of the corporation. Giving the workers a share of the profits aligns incentives and cuts through the awful Us vs. Them atmosphere Unions tend to engender with their thick dividing line between worker and manager, a line which really shouldn't exist at all in the modern workplace.

Posted by: staticvars | January 19, 2011 5:52 PM | Report abuse

"You presuppose a degree of wisdom on the part of management that we have no evidence of."

rick_desper,

I don't presuppose any wisdom on any particular manager, though I would be comfortable asserting that most business managers know a bit more about labor relations than Ezra Klein.

If unionization made companies more competitive, unionized companies would largely competed non-unionized companies out of business by now.

Now, unions aren't necessarily a bad thing - and if an employer is comfortable dealing with them then that's his/her prerogative, as I certainly wouldn't outlaw unions - but in practice they seem to cause more harm than good, from a business perspective.

For that matter, I've even read about union workers voting themselves out of their own jobs - I can't imagine the impact the union was making on those companies was a net positive.

Posted by: justin84 | January 19, 2011 6:03 PM | Report abuse

"Who knows what would have happened without organized labor, but at a minimum the UAW reduced corporate flexibility and biased production in favor of high margin trucks and SUVs."

That's just baloney. The idea that the *UAW* dictated executive decisions to bet the farm in North America on trucks and SUVs is simply pulled from your tailpipe.

(At the same time, I'll note, the foreign divisions of Ford and GM -- with unionized workforces, including the extremely powerful German unions -- were winning awards for their fuel-efficient small cars.)

"What type of cars would you focus if your costs were typically $2,500 above your competitors?"

You're putting the car(t) before the horse: that cost estimate is based upon the type of cars that the Big Three were actually making, and -- believe it or not -- bigger vehicles cost more to build than smaller ones.

The meaningful number is legacy costs, and yes, it's a big number. But it's also a number that reflects the wages that workers were prepared to forego in exchange for a secure retirement. If you want to argue that those contracts are worthless, be explicit about it -- but you might want to extend it to cover the earnings of the executives who signed on to those deals, and the shareholders who profited during the good times, and you should also be explicit in your willingness to have your own retirement nest-egg swept from under you.

Posted by: pseudonymousinnc | January 19, 2011 6:07 PM | Report abuse

Organized labor needs to organize much more aggressively, particularly in service industries. Businesses in the hotel, restaurant, and retail sectors have long been pushing their costs on taxpayers by requiring taxpayers to subsidize their employees' income and benefits. Once organized labor forces these businesses to pay the true costs of their employees directly, the costs will be passsed on to consumers, who will then have to pay the true costs of the goods and services they are purchasing from these enterprises. Anti-labor laws and attitudes have badly distorted our economy, making beggars out of the majority of workers and spendthrifts and hoarders out of high-income comsumers.

Posted by: SoutheastMichigan | January 19, 2011 6:07 PM | Report abuse

"If unionization made companies more competitive, unionized companies would largely competed non-unionized companies out of business by now."

Does not compute. But that's to be expected.

Posted by: pseudonymousinnc | January 19, 2011 6:14 PM | Report abuse

I'm so old I remember when a Republican president put the prestige and power of the United States behind the union movement, insisting that membership in free and independent trades unions was virtually a human right, and that a nation without a vibrant trades union movement, or one where the unions were mere tools of the employers, was a disgrace.

Too bad that was Poland.

Posted by: davis_x_machina | January 19, 2011 6:58 PM | Report abuse

Maybe Ezra has a potential answer and does not realize it. Require a business that donates $1 to any political organization (by law, to support owners' economic interests) to also donate $1 to an organization chartered by law to support labor's economic interests. Level the playing field. I would hope we could figure out how to charter a small number of these "AARP-type" political organizations. (The approach won't directly address the first two of Ezra's three desires, but it will indirectly.)

Posted by: pjro | January 19, 2011 7:28 PM | Report abuse

Money follows the path of least resistance.When Unions do not exist then more money flows to the top and gets distributed there. Income inequality than becomes extreme as we are seeing today. Ownership c;ass than only has to worry about their own needs and not the needs of the country. So creating and arguing for open market place (a la NAFTA)is in their interest because their is no organization such as Unions to stop them. The ownership class has surrender the American marketplace. They reaped and have not shared the treasure of their rewards. All the American worker has gotten is cheap gee-haws at Walmart and lead paint in their kids happy meals.

Posted by: buonocore8 | January 19, 2011 7:40 PM | Report abuse

When people attack public Unions I think it is a clear case of Union Envy. Remember the Tea-party are the first generation who chose to abandon unions. Now as they approach their sunset years and look back at what they have sacrificed they may have buyers remorse. They gave no pensions,their 401ks have been looted and the social security has been spent on tax cuts for the wealthy.
When we look at public unions we need to look at like to like. We cannot honestly compare Union wages to non-union wages. People chose to abandon unions the public sector di nor.

Posted by: buonocore8 | January 19, 2011 7:52 PM | Report abuse

How can you say that unions represent only 12% of the workforce, and also say that unions are a "monopoly"?! Monopoly would mean union representation was 100%. In other countries, that is the case in certain industries (i.e. the unions represent everyone in the industry), but that's not true here. That's why other countries have a better balance between corporate and worker interests ...

Posted by: adugdale | January 19, 2011 8:01 PM | Report abuse

"How can you say that unions represent only 12% of the workforce, and also say that unions are a "monopoly"?"

He's a conservative. Words mean what he wants or needs them to mean, to win his argument.

Posted by: davis_x_machina | January 19, 2011 8:05 PM | Report abuse

Unions need to "globalize" more, Americans despise outsourcing, and anything they can do to fight unfair global trade practices will increase their standing with the public. For example, the WTO complaints brought against China by the United Steelworkers. American multinationals are not going to bring these complaints because they benefit from China's trade practices, too. Also, NAFTA has hurt labor in all three countries and labor unions need to increase their cross-border efforts in North America as well as work for its repeal.

Unions need to find a way to increase apprenticeships and other kinds of job-training. Low-income students are taking out loans for $30k+ to go to for-profit schools to get Associates degrees in the trades. There is a huge unfilled demand for low-cost vocational training in this country and if unions could provide more of it their memberships and public support would increase.

I'm not sure where the unions will get the money for all my suggestions, but they could stop donating so much money to the Democratic congressmen who keep letting them down.

Posted by: julie18 | January 19, 2011 9:53 PM | Report abuse

"How can you say that unions represent only 12% of the workforce, and also say that unions are a "monopoly"?"

Because people are forced to hire from Unions, they have a monopoly on that supply of labor. Just because police officers or teachers are a very small percentage of the work force doesn't mean I can hire non-Union ones.

Posted by: staticvars | January 19, 2011 11:54 PM | Report abuse

The U.S. population is growing, Japan and the economically significant states of Europe are shrinking. Graphing the change in GDP per capita rather than just GDP would present a more accurate, and less rosy, view of the U.S. economy.

Posted by: CarolLovechild | January 20, 2011 12:32 AM | Report abuse

"That's just baloney. The idea that the *UAW* dictated executive decisions to bet the farm in North America on trucks and SUVs is simply pulled from your tailpipe."

Logic compels that if you can't compete in low margin business due to high costs, you go for the high margin business. It's called "competitive advantage".

There are two high margin auto businesses in America - SUVs/Trucks and luxury vehicles. There wasn't sufficient volume in the luxury space, so the Big 3 went with SUVs/Trucks.

"At the same time, I'll note, the foreign divisions of Ford and GM -- with unionized workforces, including the extremely powerful German unions -- were winning awards for their fuel-efficient small cars."

Go to the European websites, build those cars and convert the prices to American dollars. I got a Focus up to nearly $40,000 at Ford.de. In Europe, there is a market for premium small cars. It doesn't exist in America. Again, it all goes back to margins.

Note that in America, cars built by the powerful German unions don't enjoy high sales. Car and Driver might love them, but they don't command the market.

"You're putting the car(t) before the horse: that cost estimate is based upon the type of cars that the Big Three were actually making, and -- believe it or not -- bigger vehicles cost more to build than smaller ones."

When people refer to a "cost disadvantage", they are pointing to the excess costs required to build the same type of product, relative to a competitor.

cite//When you add the jobs bank to the pensions and health care tab, GM has a total cost disadvantage, compared to non-U.S. rivals, of $2,500 or more per car -- before it even starts making one.//end cite

http://www.pbs.org/newshour/bb/business/jan-june06/gm_1-12.html

"The meaningful number is legacy costs, and yes, it's a big number. But it's also a number that reflects the wages that workers were prepared to forego in exchange for a secure retirement."

The workers clearly weren't worth it. The UAW increased the price of labor beyond the marginal product of labor, and we all saw the result.

"but you might want to extend it to cover the earnings of the executives who signed on to those deals"

My only sympathy for the executives is that there was little they could do when times were good. If they squeezed labor costs, and justified it by saying that one day times could be very tough, management would have faced endless strikes and you know it.

"and you should also be explicit in your willingness to have your own retirement nest-egg swept from under you."

I invest for my own retirement, thanks - and if it doesn't work out that is my problem, and only mine.

Posted by: justin84 | January 20, 2011 2:12 AM | Report abuse

nickthap,


one day your child could be the one that's hurt similar to my "useless anecdotal stories" and hopefully you'll have the ability as I do to do more for their child. If not then they'll be further behind and then your children will be continuing down their parents path to nowhere.

Some industries need unions (as I suspect yours does), IMO teachers and government workers don't. But again they feed at the pension and dues trough as you suggest.

Posted by: visionbrkr | January 20, 2011 8:32 AM | Report abuse

It's bad, but it should be remembered that labor movements around the world have faced even togueth situtaitons than we are dealing with now and managed to come back. I'm thinking of South Korea, where the most effective trade unions were literally wiped out under the Rhee dictatorship but came back with a vengenace in the '80s as the East Asian boom roared.

The fate of labor is tied with the health of the economy. If we start picking up, if the labor market gets little tighter, employees start building confidence and start asking why their wages and benefits are so bad when profits are so high.

As bad as it is for workers, I doubt our corporate establishment has found a way to kill off class struggle permanently.

Posted by: alexmhogan | January 20, 2011 9:27 AM | Report abuse

Well, you really hit this one out of the park, Ezra. I know we are constantly re-hashing a daunting set of trials, but I really think that this was a valuable contribution.

Posted by: polenta | January 20, 2011 12:10 PM | Report abuse

Visionbrkr: My wife is a Texas state government worker (works at the school for the deaf), isn't in a union, and "feeds at the...pension trough." Are you calling my wife a pig? You'd be surprised how ungenerous TX is with its government workers. Are you done with your generalizations yet?

Posted by: nickthap | January 20, 2011 12:59 PM | Report abuse

nickthap,


then your wife's situation would be the exception to the norm (IF SHE WAS IN A UNION). The NJ Teachers Union is renowned for owning politicians in this state. Heck the CCWA's former director was dating the former Governor for a while. Talk about your conflicts of interest.

That being said my reference was to "union's" that feed at the pension and dues trough so obviously your wife's occupation wasn't included in that because as you said she's not in the union.

Are you done marginalizing my daughter's story? Why did you even comment on it again? My point was because the teachers union is so strong here not only is the teacher not accountable for her actions but that there's not much anyone can do and the teacher was more worried about having her union rep there than anything relating to my daughter and that has a negative drag on education here and in the country as a whole. If accountability works for corporations accountability should work for teachers and government workers too.

Posted by: visionbrkr | January 20, 2011 1:54 PM | Report abuse

VEry excellent post. Also very depressing.

I have two comments. First unions directly affect employment in Europe -- they threaten strikes if there are layoffs. So they work directly not just through public policy. Oh also the policy isn't just new policy in response to the recession. European law restricts layoffs imposing months of notice and months of severance pay. This matters and mattered in 1974-5 when the US union movement wasn't so weak (employment still declined a lot more in the USA).

Second why "even Robert Rubin." Rubin is a Democrat. Democrats tend to be pro-union. Rubin is a very reliable traitor to his class. For some reason, Rubin has a reputation as being, for lack of a better word, Larry Summers. I don't get it.

Second

Posted by: rjw88 | January 20, 2011 3:09 PM | Report abuse

I thought this was a good, thoughtful response to the post in question.

This comment above by RichardHSerlin made me think: "For every benefit you point to from strong unions, I think I could come up with just as much benefit or more, and at lower cost, via non-union solutions". He proceeded to describe POLICY solutions to SPECIFIC problems. I think these are along the right line - but they DO NOT address the issue of representation of the people's voice in the political discussion.

That's the role that unions have historically played: they take enough people who don't have a lot of power, group them together, and give them a collective powerful voice. Besides the decline of labor, there's also the rise of corporate money and lobbyists to deal with, especially in a post-Citizens-United world.

So I'd like to see more shifts along that line - ways for "us common people" to be better-represented in the national dialogue collectively. And THAT, I think, is something that Ezra Klein has already addressed repeatedly as important.

Posted by: madjoy | January 20, 2011 3:14 PM | Report abuse

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