Friday, January 08, 2010

Trying To Understand Union Mentality

First off, I've never belonged to a union. I've had a number of jobs, mostly private sector, one public sector. I've always made my deal directly with the employer. We negotiated terms, we agreed to terms, I worked under the terms, we both held up our respective ends of the bargain.

Collective bargaining is a mystery to me. I've never had someone negotiate for me, and I've never tied my lot to someone else. Most unions do just that. The individual is represented in a collective negotiation, and they are paid by seniority. Been here 10 years? You get more than the rookie.

Well, what if the rookie performs better than the 10-year veteran? Why would I be happy, as the rookie, to observe that I do better work, and/or produce more, than the guy who gets more money for lower quality work, and/or less output? Easy: I wouldn't be happy.

I think of things like this when I think of big union employers. It comes to mind when I think of auto manufacturers or steel plants. I thought of it again when I read a letter to the Indy Star regarding the construction of the new Wishard hospital downtown.
When the leaders of Wishard Hospital brought forward a massive renovation plan, all of the appeal was for this to be an all-community effort. The entire community was asked to support this by their votes "confirming our community's commitment to the New Wishard." Matt Gutwein, CEO of the Health and Hospital Corp., on a number of occasions in public meetings to rally community support touted inclusiveness of all community sectors as important to the success of this project.

Now that actual construction documents are being distributed, we find a much different story. We are finding out that a large sector of the construction industry -- nonunion contractors and nonunion construction workers -- will essentially be locked out from participating due to a backroom deal with the local big labor bosses.

These deals are always fascinating to me. The bidding process in government jobs always seems inherently corrupt. Deals are made that exclude non-union builders, and someone complains. Deals are made the include non-union builders, and the union complains. Here's an idea: Why not use the best builders available?

So, back to my thoughts about relative merit. If I'm a top rate carpenter, and I'm 8 years in, putting me in the upper end of the lower third of workers, behind the 15- and 20-year guys, why would I stand for it? If I'm good, I want to be paid accordingly. Isn't three going to be some righteous grumbling going on?

Which begs, how good is the work going to be really, in this kind of scenario?

Unions represent all kinds of employees. Obviously, this kind of scheme doesn't apply to the NFL or Major League Baseball. A highly touted rookie who hasn't done anything can score a far greater deal than a 10-year utility infielder. But this does apply to police and fire, autoworkers and many others.

I suspect there is something about differences of personality, where I couldn't tolerate such a scenario, yet others are very happy with it. Thoughts?


Doug said...

When I read about work conditions in the late 19th century and early 20th century, unions make a good deal of sense.

They also make some sense when I consider that the corporation is a legal fiction that essentially allows a collective to bargain as one person.

They also makes some sense in situations where individual performance doesn't count for much -- a series of low-skill employees working the line, for example. The group of individuals taken as a unit are producing a great deal of value for the employer, but due to unequal bargaining power and the relative ease of replacing any given individual in the group, the group is being compensated far less than the value they are producing together.

It also makes some sense when you consider that there is sort of a tragedy of the commons where every business has an individual incentive to pay workers as little as possible but rely on there being a sizable population of people who are being paid better than their employees and are, therefore, able to buy the business' products.

That said, I've never been part of a union, even if it makes some sense, the union system doesn't make perfect sense. And, the actual implementation of unions often seems sketchy and, sometimes, corrupt.

Mike Kole said...

Sure, unions made sense in the late 19th century, especially in light of the company town and the relative difficulty of transportation. I think those have waned dramatically, though.

I was actually think of the low-skill employees as the place where it makes the least sense in a big picture way. Sure, it benefits those unionized workers, but hurts the employer, and hurts the economy as a whole by making the final price on the product higher. Hence, jobs go to China.

Roberta X said...

They're spending my money -- why doesn't the low bidder win? And why are there all those design fripperies? Can't they put up a big plain lump of a building and pass the savings on to me?

Unions got out of hand fast and became much worse during the Great Depression, with plenty of help from Uncle Sam. If you look back to skilled-trade organizations that had as much interest in ensuring their members had the skills to stay alive (electrical and chemical workers, etc.) as they did in getting better wages, unions look a little better, but that day was long ago.

There are plenty of tragedy-of-the-commons-type traps and no easy answers.

Mike Kole said...

Doug- What relevance is the worker's pay to the employer's profit? We're taking merit here. If the employee has skills that set him apart from the pack, absolutely, he is more valuable and should earn a higher wage. But you described a scenario where the worker is perfectly replaceable, not bringing special skills to the table. Why should that kind of worker get higher pay, contrary to merit?

I've read many posts of yours railing against trust fund babies on the basis that they gain without merit. How is the case you made any different, besides scale?