Chamber Stimulus
It seems the US Chamber of Congress is getting ready to do its part to keep recession at bay, looking to stimulate the economy with $10 billion in spending to ensure that American labor law remains a bad joke in which companies can break all kinds of laws and stifle union organizing with impunity:
The chamber deployed a network of operatives in a number of key Senate races this year and campaigned aggressively — on the air and on the ground — against the card-check legislation. It will be maintaining those operations, hoping to win over some senators and peel back others, in addition to running TV ads. Last week it released the first in a series of reports refuting what it calls union rhetoric.
In theory, Chamber types hate unions because unionization is bad for business. It’s difficult, however, to see why it is that a union would want to wreck the business model of a firm whose workers it represents. By contrast, it’s easy to see why a union would want to shift the relative balance of compensation enjoyed by top managers versus lower-level employees. And it’s easy to see why Chamber types would be virulently hostile to such a shifting of the balance. Not at all clear why normal people would want to join them in their hostility or treat as credible the view that returning to a higher state of unionization would wreck the economy.
62 Responses to “Chamber Stimulus”
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December 2nd, 2008 at 11:26 am
$10 billion in spending
Million. With an “m.”
December 2nd, 2008 at 11:30 am
What James Gary said. I have high hopes for EFCA and I almost had a heart attack when I read “$10 billion.”
December 2nd, 2008 at 11:31 am
I know you’re being sarcastic here, but can you really not think of any companies who have been handicapped by short-sighted unions who act against their own long-term interests by securing overly generous pensions for workers?
Think really hard here…some of them may have been in the news recently.
December 2nd, 2008 at 11:36 am
“It’s difficult, however, to see why it is that a union would want to wreck the business model of a firm whose workers it represents.”
I thought the problem was unions may achieve medium term gains in wages/benefits that are not sustainable long term. The UAW has driven some auto industry jobs further south and maybe out of the US entirely. And then there is the US merchant marine, not a thriving industry but with good wages for those who are left. Unions are sometimes necessary, but can be shortsighted, like management. And they add cost and complexity.
December 2nd, 2008 at 11:37 am
“It’s difficult, however, to see why it is that a union would want to wreck the business model of a firm whose workers it represents.”
Unions aren’t primarily interested in business growth, unions are interested in maximizing the economic rents of their members (in the “good” case) or of their leadership (in the bad case). What you all too often get in practice is unions making common cause with top management to maximize salaries and perks for everyone at the expense of capital providers and customers.
December 2nd, 2008 at 11:41 am
What is “card-check legislation”? Why is it something I should support?
December 2nd, 2008 at 11:42 am
Re: can you really not think of any companies who have been handicapped by short-sighted unions who act against their own long-term interests by securing overly generous pensions for workers?
The UAW has driven some auto industry jobs further south and maybe out of the US entirely. And then there is the US merchant marine, not a thriving industry but with good wages for those who are left.
Please note (from nizkor.org):
“Begging the Questio” is a fallacy in which the premises include the claim that the conclusion is true or (directly or indirectly) assume that the conclusion is true.
This sort of “reasoning” is fallacious because simply assuming that the conclusion is true (directly or indirectly) in the premises does not constitute evidence for that conclusion. Obviously, simply assuming a claim is true does not serve as evidence for that claim. This is especially clear in particularly blatant cases: “X is true. The evidence for this claim is that X is true.”
December 2nd, 2008 at 11:49 am
It’s difficult, however, to see why it is that a union would want to wreck the business model of a firm whose workers it represents.
Seriously? Why don’t you ask the UAW why they wanted to wreck the business model of the Big 3? Oh right, they didn’t want to, yet somehow they did anyway!
December 2nd, 2008 at 11:53 am
“It’s difficult, however, to see why it is that a union would want to wreck the business model of a firm whose workers it represents.”
Matt, you wrote a post just yesterday talking about how companies opposed healthcare against their interest. Don’t you think unions might have similarly short time horizons?
December 2nd, 2008 at 11:55 am
Just to throw in:
“The UAW has driven some auto industry jobs further south and maybe out of the US entirely” – did the UAW choose to relocate? No, the corporations chose to move, because it would make them more profits. Now, what no one else has been able to explain is how unions should respond to globalization – working to make their plants “competitive” is often smokescreen for giving up huge concessions, and in the end the wage differential between the Global North and the Global South is probably too big to overcome without huge drops in standards of living if competition is to center on wages, protectionism is a losing battle even when it’s attempted, and raising the global minimum wage will take a long time.
As to the CoC, you have to understand that these organizations are not ideologically neutral; a lot of the people who run these institutions (including things like the National Association of Manufacturers, Small Business Alliance, etc.) tend to be laissez-faire zealots, anti-taxers, etc. Their opposition to unions is primarily ideological – regardless of the actual conditions of labor relations. They don’t like unions because unions are: pushy and disruptive (i.e, they are rights-conscious and fight back against discrimination and law-breaking), socialist (i.e, they promote group identity and non-economic ideas about work (solidarity, craft pride, dignity in the workplace, fairness, etc.)), and interfering with management prerogatives (i.e, they want to have a say in how people’s work lives are lived, which is ironic, because that say can lead to huge improvements in efficiency).
December 2nd, 2008 at 12:03 pm
What is “card-check legislation”? Why is it something I should support?
It makes it easier for workers to form unions, by doing away with the current process which gives employers a huge opportunity to pressure workers into not forming unions (often using illegal tactics which are later punished with wrist-slaps). Whether you should support card-check probably depends on what you think of unions in general; but if you even think workers should have a fair opportunity to decide whether to organize themselves, you should support card-check.
December 2nd, 2008 at 12:10 pm
It’s all useless folks. Matt will continue to put his fingers in his ears and say “lalalalalalal I can’t hear you”. In his fantasy world, unions are always great and beneficial, and managers always evil and duplicitous. But is there a single thriving industry that is heavily unionized?
December 2nd, 2008 at 12:14 pm
Well, the problem is companies may achieve medium term gains in profits that are not sustainable long term, but I don’t see anyone advocating that it be harder to start a business.
But of course, corporations are natural and good, having existed forever, and unions are artificial and bad.
December 2nd, 2008 at 12:28 pm
And in their inimitable way we see the whole host of idiot right-wing nutjobs whining about UAW. It’s almost as if these clown car conservatives didn’t realize that the pensions were a concession made by the unions to allow the car companies to pay less in the short term. Look you morons, this wasn’t some stupid thing the evil unions did in order to undermine their industry, it was something they did because the industry said “we can’t pay you now, but we’ll put money away and use our greater understanding of the markets to ensure there’s plenty when you retire.”
This line of “thought” from conservatives is as embarrassing as the “$72 an hour” lie. Lucky for conservatives embarrassment simply doesn’t register.
December 2nd, 2008 at 12:32 pm
Well the bottom rung of management are really just another group of workers. Go into any store and see what the assistant store manager is up to. Chances are, they are stocking or running a register. Hiring freezes and overtime caps leave them with fewer employees than they need to do all the work. So the assistant managers do it themselves. After a full day of backing up the hourly help and covering for no-shows, they still have all their management work to do after closing time. 12-14 hour days are not rare, for salaried positions that pay in the twenties.
So I guess I understand why lower management would be anti union. And middle management is probably anti union by selection; you wouldn’t get promoted to the next level without conspicuous loyalty to the upper management. Upper management is anti union because it comes out of their pocket.
This is why union bashing is the only kind of class warfare that remains socially acceptable.
December 2nd, 2008 at 12:35 pm
Seriously weird group of trolls here (Brad, Jaime, right, etc.) Combine that with economic royalist liberals and you get this thread.
Unions did not destroy the Big 3. The Big 3 management destroyed the Big 3 by making shitty decisions. Long term benefits to union members were just delayed compensation that management signed off on. If my boss offered me a $100 pay cut in exchange for some benefit down the road, of course that benefit is going to have to be more than $100 for me to want to take it (assuming equal bargaining power.)
Seriously, why does all common sense go out the window when we talk about wages for working people?
December 2nd, 2008 at 12:45 pm
When it comes to innovating and working to stay competitive by increasing overall productivity through rationalization and technological advancement, business people are usually reluctant to take on such challenges and prefer to squeeze their employees. You would think people with strength, character, and integrity would rather improve their companies than hurt their workers, but your normal businessperson sorely lacks these virtues and prefers to constantly, constantly whine about how high taxes are or how unions will bring about the end of the world. These cry babies are coddled by the Republican Party, of which most of them are members, and held up as ideal citizens. What perversion.
December 2nd, 2008 at 12:47 pm
Question for all the pro-union guys: can you name one US industry that:
Is heavily unionized.
Has been unionized for at least 25 years.
And
Has as many workers under 40 as the economy-wide average.
Or
Provides as large a proportion of global output in its field as it did 25 years ago.
December 2nd, 2008 at 12:56 pm
SamGoatCheese,
Your question is bullshit. You either know this or are too stupid to participate in this thread.
Love,
Francisco The Man.
December 2nd, 2008 at 1:06 pm
It’s all useless folks. Matt will continue to put his fingers in his ears and say “lalalalalalal I can’t hear you”. In his fantasy world, unions are always great and beneficial, and managers always evil and duplicitous. But is there a single thriving industry that is heavily unionized?
The financial services industry? Oh it’s not heavily unionized? I don’t know if the management in that industry was evil, but much of it was certainly duplicitous and greedy and self-centered and short-sighted. This is a generalization of course. Why should any other industry be different?
December 2nd, 2008 at 1:11 pm
The Chamber is against unionism for one reason: power is a zero-sum game. From that – the ability to act – all else flows.
December 2nd, 2008 at 1:13 pm
Francisco the man,
Nice, really mature.
Management is not a single entity like the unions. When they fuck up they get replaced. For them to make consistently bad mistakes for thirty years, as you suggest, would be statistically impossible. Think about it. There are three firms. Dozens of CEOs and different managers all wanting to make a profit and who are making thousands of different decisions. If a right decision where possible someone would have had made it. Instead they are constrained by the unions. Just look at Project Yellowstone. Unions, given the power, would definitely run businesses differently than their managers. And this goes beyond simply paying a union wage.
December 2nd, 2008 at 1:27 pm
Management is not a single entity like the unions. When they fuck up they get replaced.
To pick an example, like Raytheon, which held onto the same management for years, even as it consistently underperformed in its sectors.
We need to be clear that “replaced” doesn’t have the same economic consequences as “canned”, when someone takes a significant fraction of company value with them as a golden parachute.
Dozens of CEOs and different managers all wanting to make a profit and who are making thousands of different decisions.
“Profit”? Meaning a positive net on operations after expenses, or cranking up the value of stock options?
December 2nd, 2008 at 1:33 pm
Gordon Gekko,
Your circular logic is simply laughable. Translated: “It’s all the unions fault. After all, if a better decision could have been made, it would have. Hence, it must be the unions to blame.” Yeah dude, I guess there’s no other possible cause there. Just maybe, this parade of buffoons running the companies made one dumbass decision after another, knowing that they could kick the problems to their successors while grabbing their golden parachute and escaping.
And this is great: Management is not a single entity like the unions. When they fuck up they get replaced.
Really??? Man, it sure is grea all those financial execs got the boot before it was too la….oh.
Then again, what do you expect from somebody whose tag is “Gordo Gekko.”
December 2nd, 2008 at 1:41 pm
oh I don’t deny that the Big 3’s management was idiotic for signing off on that deal. No question. That’s one of a million reasons that don’t deserve a bailout.
But you have to admit Matt’s ‘the unions don’t want the company to die so they’d never do anything to hurt it’ logic is pretty weak too. Management’s survival is even more dependent on company success than the union’s is, but they make mistakes all the time. Like all human institutions, unions are perfectly capable of overreaching.
December 2nd, 2008 at 1:42 pm
Aaotos: that’s one of the reasons why there used to be foremen’s unions, and one of the reasons why a favorite anti-union technique in retail is to gather up all the assistant amanagers and threaten to fire them all unless they break the union by spying on their workers – which is perfectly legal, since they’re not covered under labor law.
SamChevre:
Public Sector
Health Care
Janitorial/Custodial Services
Transportation/Utilities
Communications
Construction
December 2nd, 2008 at 1:42 pm
“If a right decision where possible someone would have had made it.”
– Did they teach you this delightfully idiotic conceit in some high-priced ivy-covered business school, or did you harvest this nugget from your own blissful ignorance of humanity?
December 2nd, 2008 at 1:51 pm
I think the UAW knew that if they had asked for equivalent levels of cash compensation they would have had very little public support. There is also the tax factor: pension benefits are tax defered and healthcare benefits are tax exempt.
So, what do they make? Toyota pays $48/hr so what is the UAW getting? I assume it’s more – is it 52, 56, 65?
December 2nd, 2008 at 2:01 pm
Francisco the man,
The finance analogy doesn’t really hold. The management of financial firms all made the same mistake in one period. I am not saying the big three’s management are infallible, it is only that if a right decision were available the management had a huge financial incentive as well as many opportunities to make it. If it were as easy as hiring a bunch of Japanese or German CEO don’t you think a bunch of evil, greedy investors would have done that?
December 2nd, 2008 at 2:19 pm
Like all human institutions, unions are perfectly capable of overreaching.
I mean, of course they are, Jamie. And nobody is saying otherwise. But then to take that comment and draw a straight line to “Therefore we should make it as difficult as possible to form unions” is nonsense. As Matt correctly points out, labor law in this country is a joke. It is regularly flouted with impunity. So Matt and I and others supports things like EFCA to level the playing field a little.
Gekko,
You trust that management will always make the right decisions because of rational markets, etc. I don’t – but that’s not really the issue. The issue is relative bargaining power. EFCA is all about reducing the strong arm tactics of management (see the astute comment from Steven Attewell about turning “assistant managers” against regular employees.)
All I’m asking is that you take your same faith in CEOs to operate in their enlightened interest and apply it to workers as well. I mean, a statment like “if a right decision were available the management had a huge financial incentive as well as many opportunities to make it” should apply to unions as well, no?
December 2nd, 2008 at 2:28 pm
Francisco-
I’m glad that you and I agree that unions can seriously mess up a business. Matt, at least as quoted in this post, doesn’t seem to think that. But now that’s settled, there can be a serious debate about the balance of union v. business power and EFCA which recognizes that it’s possible to go too far in promoting unions.
Whether the EFCA goes too far is an entirely different matter.
December 2nd, 2008 at 2:31 pm
Theoretically, it is very possible for the Chamber of Commerce’s problems with easy unionization to be based on a desire for greater economic output as opposed to upward income distribution. If a certain group of non-unionized workers gets 50% of 1 million dollars, but unionizing gets them 60% of 900 thousand dollars, they will win while ruining (generously defined) their employer’s business plan. This logic can also be expanded to include union support for business growth, but growth that may be better for the business without the union.
I am not saying that unions necessarily are bad for employers. I am just saying that this is some poor logic. In any event that one bad statement in what is otherwise a useful and interesting post is the kind of thing that impatient bloggers would whine about endlessly as some form of bold media criticism if it were found in an article in a newspaper or statement by a TV talking-head. People could be understanding when media people try to get their talking-points through.
December 2nd, 2008 at 2:32 pm
So, what do they make? Toyota pays $48/hr so what is the UAW getting? I assume it’s more – is it 52, 56, 65?
About $38/hr. in combined wages and benefits.
December 2nd, 2008 at 2:40 pm
Trolly:
But doesn’t that assume that as income distribution increases, output decreases? This doesn’t seem like a self-evident assumption to me. Often, it’s the other way around – as wages rise, productivity increases, because workers are happier, feel that they are respected, maybe they don’t need to take a second job or do as much overtime so they’re less tired, maybe they can afford better food so their health is better, ertc.
December 2nd, 2008 at 2:42 pm
Francisco the man,
I have no large problem with unions being used in mostly uncompetitive industries (steel, education…). My criticism of the EFCA is it would make unions viable against perfectly competitive firms (Walmart) and result in a huge dead-weight loss. Remember there are better ways to help low-skilled workers (progressive taxes, education…) that don’t have the same severity of consequences as the EFCA.
Anyways my statement is wrong. Management doesn’t always work in the company’s best interests but investor do. And investor ability to tame management is what makes management work in the company’s best interest (usually!). Also, it is not hard to think of a situation where unions would maximize their own benefit (i.e. oppose new machines that replace workers, prevent layoffs) but make things worse for future potential employees and society. If it were as simple as just giving employees more of the profits then I guess I wouldn’t mind.
December 2nd, 2008 at 3:19 pm
Gekko/Jamie
Alright. I guess we’re at some sort of point where a debate would be theoretically possible. I will add that I don’t read Matthew’s comment to mean that union positions are always and evermore correct. Only that they should be allowed to be in a position to put forward those positions in the first place.
December 2nd, 2008 at 3:39 pm
My problem with unions isn’t wages and compensation (which are actually self-limiting, at least to the same extent that management greed is, in that the long-term survival of the firm is at least theoretically important to both unions and management), where unions tend to right the balance and ensure workers share in a firm’s prosperity, but work rules. Union work rules are designed to preserve jobs whether they are needed or not, prevent change that may eliminate positions, etc. Think of the designated hitter in baseball.
December 2nd, 2008 at 4:06 pm
Union work rules are designed to preserve jobs whether they are needed or not, prevent change that may eliminate positions, etc. Think of the designated hitter in baseball.
That’s a terrible example. While the rule did not actually come to fruition until the 1970’s, attempts to create a designated hitter position (ironically in the National League) predate the creation of the MLBPA (1953) by at least 20 years. Furthermore, the rule’s purpose is to eliminate a typically poor offensive performer (the pitcher) and replace him with a more competent player; this obviously creates more base hits and runs scored, and thus (according to some; not me) a more exciting product. Its creation and its continuing existence have little-to-nothing to do with the MLBPA.
December 2nd, 2008 at 5:57 pm
If a right decision where possible someone would have had made it.
Grow the fuck up, gekko.
And read Thomas Frank’s One Market Under God. The pursuit of quarterly numbers through whatever accounting tricks pass legal muster, painting the tape, and keeping Maria Bartilromo happy have become the Business of American Business.
December 2nd, 2008 at 6:15 pm
It is totally a misuse of Chamber funds for them to spend $10 trillion on this anti-card check campaign.
If the U.S. Chamber of Commerce can afford to spend $10 quadrillion on an ad campaign, I don’t see why they can’t spend that same $10 quintillion on a bridge to the moon.
December 2nd, 2008 at 6:30 pm
Anyway, the existence of the designated hitter doesn’t increase the number of players on a team’s roster, does it? I suppose it replaces a marginal bench/bullpen player with a good hitter, and thus probably drives up total salary, but it seems that by the same lights it drives up total productivity (though, since baseball is a zero-sum game, and each team in the AL has this productivity advantage, they all cancel out).
Oh, can I also say that I hate the idea, expressed way above, that “unions are interested in maximizing the economic rents of their members.” Why are these called “rents”? Unions are interested in maximizing the compensation of their members, just as any seller would rather sell a given amount of product for a higher price rather than for a lower price, and it’s only called a “rent” because vulgar libertarians don’t approve of workers getting paid. (Probably the reply is going to be that unions have an effective monopoly on the labor supply, which even if true is dumb, because employers that are large enough to have a unionized work force have an effective oligopsony on labor; the union just equalizes bargaining power.)
December 2nd, 2008 at 7:55 pm
Anyway, the existence of the designated hitter doesn’t increase the number of players on a team’s roster, does it? I suppose it replaces a marginal bench/bullpen player with a good hitter, and thus probably drives up total salary, but it seems that by the same lights it drives up total productivity (though, since baseball is a zero-sum game, and each team in the AL has this productivity advantage, they all cancel out).
Actually, creating a more “senior” position is precisely why the union insists that the DH rule is sacrosanct in each and every negotiation (despite many owners supporting its abolishment). The MLBPA is the entire reason we still have it.
And that’s one example. Of course, if you want examples of work rules in the ordinary industrial union’s context, you can use google and find out.
December 2nd, 2008 at 8:10 pm
“The MLBPA is the entire reason we still have it.”
Dilan, I’m sorry, you know nothing about either baseball or unions. That statement is beyond ludicrous; most fans, most owners, and the Commissioner are flatly against the elimination of the DH.
Also your reasoning about surrogacy, in the thread at Dana’s, is extremely feeble and annoying. So this hasn’t been a great 24 hours for you.
December 2nd, 2008 at 8:51 pm
Gordon: “My criticism of the EFCA is it would make unions viable against perfectly competitive firms (Walmart) and result in a huge dead-weight loss. Remember there are better ways to help low-skilled workers (progressive taxes, education…) that don’t have the same severity of consequences as the EFCA.”
Couple problems: 1. You’re assuming that unions will destroy Wal-Mart. This is begging the question – why?
2. It’s not just about helping low-waged workers; it’s also that all workers have the right to organize in an independent union, and that right is being routinely violated.
Dilan: while it’s true that SOME work rules are designed to save jobs (and it’s worth asking whether eliminating a job is genuinely improving efficiency or just on paper – such as the example of layoffs/buyouts in the newspaper industry and the result in terms of quality of product), most are designed to do other things – preserve human health and well-being (having a break a few times a day, ensuring a lunch break, being able to use the bathroom), ensure that labor is appropriately rewarded (no unpaid overtime, no working off the clock, no being asked to do labor you won’t be paid for), or to ensure consistency and fairness (protection against unjust-cause firings/discipline, standard rules for promotion and hiring to prevent discrimination or favoratism, and so forth).
December 3rd, 2008 at 1:36 pm
tomemos:
Here’s the MLBPA’s position on the designated hitter:
http://whereistand.com/MLBPA/35849
And no, the vast majority of fans and many of the team owners OPPOSE it. It’s insisted upon by union representatives.
You’re the one who is having the lousy 24 hours, not me.
December 3rd, 2008 at 1:40 pm
Dilan: while it’s true that SOME work rules are designed to save jobs (and it’s worth asking whether eliminating a job is genuinely improving efficiency or just on paper – such as the example of layoffs/buyouts in the newspaper industry and the result in terms of quality of product), most are designed to do other things – preserve human health and well-being (having a break a few times a day, ensuring a lunch break, being able to use the bathroom), ensure that labor is appropriately rewarded (no unpaid overtime, no working off the clock, no being asked to do labor you won’t be paid for), or to ensure consistency and fairness (protection against unjust-cause firings/discipline, standard rules for promotion and hiring to prevent discrimination or favoratism, and so forth).
That’s not true. We have labor regulations for those things. (And tenure / good cause is a different issue from work rules.) What union work rules do is ensure that jobs don’t get eliminated that need to be, that people continue to get paid when their services are no longer needed, and that people can scream “it’s not my job” rather than doing what is necessary to help the enterprise.
And as for your question, exactly how would you save all those jobs in the newspaper industry while making a profit? The fact is, in a dynamic economy, you constantly have to eliminate deadweight jobs and fire people. And unions make that less possible.
That doesn’t mean I don’t want them around to raise salaries, though. Just that they come at a huge price.
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