Sunday, February 20, 2011

Quote of the day

...In the span of three days [President Obama] first submits a budget that would increase the federal deficit and, two days later, he mobilizes his party, his own political machine, and organized labor, which is an appendage to his party, to sabotage Wisconsin's attempt to do what he will not do, which is deal with the insolvency of their government. In doing so, he has set the stage for 2012 by saying the Democratic Party is the party of government, not just in having an exaggerated view of the scope and competence of government, but because its base is in public employees.
Really, this is the best explanation for the Democratic party's support of public sector unions -- it's simply a big chunk of its electoral and financial base. If ideology were the chief driver here, it would seem Democrats would be against such unions, as they drive up labor costs and thus reduce funds for left-wing projects. Think about it, every dollar given to a teacher is one fewer dollar available for high-speed rail, green energy and other spending initiatives favored by the left. Although perhaps I am not being cynical enough, and the fiscal pressures caused by high labor cost provide an excuse to call for higher taxes, thus accomplishing a political two-fer.


Ben said...

You're totally off base. Democrats are pro-Union because they promote the rights of workers--including better pay, better working conditions, and benefits--and defend workers against exploitation by management. If there were any sort of parity in bargaining position between workers and employers--particularly large employers, like the government--there would be no need for Unions. Instead, there is no such parity of bargaining power.

Colin said...

First off, there is a difference between favoring unions and favoring public sector unions. Second, the items you mention such as pay and benefits are not rights at all. No one has a "right" to a bigger paycheck, or a "right" to more vacation time or a more comprehensive health insurance package.

That workers, absent a union, lack bargaining power with their employers is not at all clear. If employees don't like their employer they are free to find another one. In times of low unemployment, employees can have the upper hand. In times of high unemployment, employers likely have more of an advantage.

In my own work history I have never been represented by a union, and yet I have had negotiating power, asking for -- and receiving -- raises for example. Workers can defend themselves by walking off the job. Why work for someone who exploits you? If others will treat you better, why not work for them instead? Again, I have had jobs that I didn't like before, and I've quit them. Problem solved.

That said, if someone wants to join a private sector union, that's fine. We have freedom of association in this country. But those interactions are between two private interests, the employer and the union. In the public sector this is not true.

Ben said...

I disagree with everything you've just written and would wager your anecdotal experience versus the history of worker exploitation around the world buttresses my point. I don't intend to convince you because, I'm also certain you're mind is wholly closed on this point.

That said, I'm perplexed by this idea: We have freedom of association in this country. But those interactions are between two private interests, the employer and the union. In the public sector this is not true. Do you suggest that public employees forfeit their rights to freedom of association?

Colin said...

No, if public employees want to freely associate and form a union that's fine. But I don't think the government is obligated to recognize that union or negotiate collectively with it.

As for the plight of workers and the need for unions, I similarly imagine that your views are rather dogmatic and intractable. But we don't need anecdotes, we can simply look at data. It's notable, for example, that median household income has been steadily increasing even as unionization rates sink ever lower in this country (now under 10% in the private sector).

It's worth further considering that many of the highest paying and most dynamic sectors of the economy are those where unions are almost non-existent, such as IT, health care and finance. Are these workers exploited? Are they without rights?

Is it also interesting that right to work states have lower unemployment than forced unionism states? Which is better for workers?

I'm not unfamiliar with the labor movement's history -- Haymarket, Pinkertons and the like -- and also have experience working in a [non-union] factory doing manual labor. But I think history and experience show that the best friend of a worker is not a union by a dynamic and productive economy that competes for the worker's labor.

Ben said...

Indeed they are well formed ideas--I wouldn't say dogmatic because I've actually been critical of labor. But having actually worked with organized and unorganized workers, and seen the exploitation of workers first hand, I do see the value of the Union.

Median household incomes have increased, yes, but during that same period real wages decreased from $312.83 in 1966 (the first year of your chart) to $277.57 in 2004. The increase in household income is likely attributable to the increase in the number of married women participating in the work force.

It's funny that you mention IT, of course. In the late 1990s, before the dotcom bubble burst, there were real fears of "Geek Sweatshops," specifically because of the incredibly long hours worked, under high stress, with employees wholly unorganized. In the wake of the bubble, many of these jobs are now done offshore in a pattern not unfamiliar to say shoe manufacturers.

"Forced unionism states"--what are you talking about? What is this made-up term? Are you talking about states that allow closed shop? Also, right to work is just another example of dishonest folks on the right winning the labeling competition (see, e.g., death tax).

Ben said...

Additionally, organized workers earned on average 27% more than their unorganized counterparts.

Colin said...

Wages are not the correct metric. You need to look at total employee compensation which includes health insurance, 401k matches, life insurance, etc. Total compensation has increased by 17% since the early 1970s.

I am not sure the fact of high IT compensation as a sector is undone by allegations of geek sweatshops -- a term that a google search turns up basically nothing on.

As for forced unionism, it simply refers to workplaces where workers are required to be members of the union as a condition of employment.

The fact that unionized workers are paid more than their non-union counterparts is well known and unsurprising. This also explains, however -- along with reduced productivity vs. non-union workers in certain industries -- why unions are increasingly rare in the private sector as they price themselves out of a job.

Ben said...

First, we have been talking all along about wages--don't change the metric to massage your argument. Second, health insurance compensation--given the radically increased costs in healthcare--clearly distort the compensation metric. Moreover, as I remember an earlier argument, don't you refuse to recognize that you even have a property interest in your 401k? Shouldn't that be excised from your analysis then--or am I mistaken about your position there?

That's odd about the geek sweatshop bit--maybe I'm forgetting the term that was used. It was kind of a big deal when I was working in IT in the late 1990s--well, big fear.

Colin said...

Actually when I first went looking for employee compensation data I wanted to find total compensation but couldn't find a good chart, so I went with household income. However, you are correct that this is distorted by women's participation in the workforce so I did some additional searching on total compensation and found the 17% figure (although I still couldn't find a good graph). Regardless, this is the correct metric.

You are correct that health care costs have been surging, but so what? An employer doesn't care if his employee expenses are due to salary or health care premiums, all he knows is that his costs are surging ever upwards. This is another reason why we need more competition to get health care costs under control and why the linkage between employment and health care needs to be broken. The fact is, employers are spending ever more on their employees but the employees aren't seeing it due to rising health costs.

As for the 401k discussion, you'll have to refresh my memory. But employer matches are quite obviously a part of compensation that accrue immediately to the employee and can be cashed out whenever (although with a penalty in many instances). If you take a typical 3% match for someone making 50K, that's an extra $1500 per year in tax-free compensation.