I’m ambivalent about unions. When they first arose as a real market force at the end of the 19th and beginning of the 20th centuries, I believe they were a necessary counterbalance to industries that (a) had unlimited power in the employment market place and (b) that abused that power something awful.
I started turning against unions in the 1970s, when I witnessed the unutterable garbage pouring out of the California’s teachers union (of which my dad was a member). The union did little to improve teacher’s wages (believe me, very little), but got it’s sticky, uninformed, politicized fingers in every aspect of public education, to education’s great detriment.
Nowadays, we still have unions, but we don’t have the situation that prevailed in the 19th and early 20th centuries. We have a fairly educated American workforce, we have vast bodies of legislation protecting the worker, we have the free flow of information, we have a mobility unimaginable a century ago (meaning workers have an easier time following jobs), and we’re struggling to compete in something equally unimaginable a century ago: a world economy.
Also, unions, which used to protect blue collar workers from true abuse (dangerous working conditions, unsustainable wages, the abuses of factory towns, etc.), now exist at greatest strength in the government sector, a thought I find discomfiting, since both feed at the public trough, free of market forces.
With those thoughts in mind, I offer you an interesting press release that came in today’s email:
Center for Union Facts
For Immediate Release
November 11, 2008
Union Job Rules, Unreasonable Demands Big Factor in GM Downfall
GM’s Concessions to Unions Have Put the Company’s Long-Term Viability in Question
Washington D.C.- General Motors Corporation (GM) is driving its way toward bankruptcy or a government funded bailout, thanks in large part to restrictive work rules placed on the organization by the United Auto Workers (UAW). Last night, General Motors chief executive, Rick Wagoner said the company would need a federal aid package before Barack Obama takes office in mid-January.
GM has said that they will need an $11-14 billion cash injection in order to continue conducting business. Without that bailout, GM said Friday that it might halt production as soon as the middle of next year. Deutsche Bank Group, one of the world’s leading financial service providers, downgraded General Motors yesterday morning, targeting their stock value for $0.
Much of this turmoil stems from restrictive UAW job rules that prevent GM from having the flexibility to be competitive in the global marketplace, particularly during an economic downturn. One of the most egregious examples is the union job bank, which continues to pay workers whose jobs fell victim to technological progress or plant restructurings even though they aren’t actually working. The job bank, established in the mid-1980s, requires GM to pay displaced workers nearly their entire salary plus benefits and pension.
UAW also bullied GM into gold-plated health care benefits that are unsustainable. For each car GM makes, more money is spent for health insurance than on steel for its construction. Workers gained the right to smoke while on the assembly line, and some pay $0 deductable on doctor’s visits.
“The United Auto Workers have bled General Motors dry, leaving the company in a tattered state, and the union members extremely vulnerable,” said Richard Berman, Executive Director for the Center for Union Facts. “Job banks that pay workers to do nothing and other harmful union rules are at the heart of GM’s imminent bankruptcy. It will be truly unfortunate if union demands over many years result in another bankruptcy or bailout.”
“This should come as a lesson to government officials considering passing the Employee Free Choice Act, which would put more power and control into the hands of union chiefs who bankrupted one of America’s signature corporations.”