Saturday, February 15, 2014


Where I work I'm surrounded by out-and-proud union employees.  Some are so out and proud that they say, openly, that they think that union membership should be required for all workers.  I didn't say all teachers or all government workers, I said all workers.  Lefties do love compulsion.

Anyway, many of these people are convinced we teachers would have nothing were it not for the strength and beneficence of our teachers union, about which they complain incessantly because we haven't had so much as a raise for about 8 years.  But imagine how bad off we'd be if we didn't have a union, right?!

I wonder how they'd process this information if I were to use their favored tactic and force them to:
Union organizers in the South suffered a setback Friday when workers at the Volkswagen plant in Chattanooga, Tennessee, voted against being represented by the United Auto Workers.

The vote was 712 against the union and 626 in favor. There are about 1,550 hourly workers at the plant who were eligible to vote.

The vote was seen as the UAW's best chance to organize a nonunion auto plant, because Volkswagen management did not oppose the effort.
What would cause more than half of those VW workers to reject union membership?  I think union people should think long and hard about how and why that could happen.

To be clear, I'm not against unions a priori, I'm against forced unionism.  As a lover of freedom I'm glad that 712 of my fellow Americans weren't compelled to give their money to an organization they didn't want to.  Those 626 who want to join a union can still do so as individuals, and that's perfectly acceptable.

But out here in true blue California, why anyone would not want to join a union makes many shake their heads in utter confusion.


maxutils said...

And, while you continue to purport that you are not anti union, you are just anti compulsion, I will contain that without compulsion the existence of unions would eventually, if not immediately as successful as communism. Why would anyone pay for something to get benefits the same as those received by those who did pay?

Darren said...

It's always a grand treat when a libertarian chastises me for not supporting compulsion.

If unions can't survive on their own merits in the marketplace of ideas, if they can't convince the buying public of their necessity and importance, they probably don't deserve to exist. That's what a real libertarian would say about any other venture.

You also seem to think that people can't be trusted, or are too stupid, to realize what's in their own best interest--but you, the wise one, know what their best interest is.

It's a little sick, don't you think?

Anonymous said...

What I've been wondering since this story broke is *WHY* Volkswagen put the plant in Chattanooga if they wanted the plant to be unionized (which, it seems, that they do so that they can have a worker's council like in German plants)?

The plant opened in 2011, so it is fairly new.

Just put the darn thing in Michigan or Ohio and there would be much less problem getting the folks to unionized.

So why did they put it in Tennessee?

-Mark Roulo

momod4 said...

I have no problem with private-sector unions, as long as no one is compelled to join (secret ballots and limits on how often votes can be held and with what notice), but I do NOT think that public-sector unions should be allowed. The taxpayers, who pay the bills, have no seat at the table; it's fundamentally a corrupt bargain between politicians funded by the unions (without which they can't get elected), who then give the unions whatever they ask. I have no shred of respect for teachers' unions, but I might have if they applied enough pressure on politicians and admins to demand a safe and orderly school climate, remove disruptive kids (whatever the reason) and group by instructional need.

allen (in Michigan) said...

Another pretty good reason to have avoided Michigan besides the strength of the unions was the single business tax.

It taxes businesses on their income, compensation to employees, rent payments and other indications of business activity within the state, while granting credits for such items as in-state business investment. It raises about $1.8 billion for the state annually.

With regard to the vote against the unions at the Volkswagen plant, I'd like to think the workers realized that there's no such thing as a free lunch and, given the still tenuous state of the U.S. economy, inviting in what's nothing more then an economic parasite might not be in their best, long-term interests. After all, the union contributes nothing to the value of the product so satisfying union demands requires either raising prices or cutting profits.

In today's competitive marketplace the former's going to be impossible since the value of the product hasn't increased and the latter obviously impacts the employer's long term viability.

I'm cautiously optimistic that the something-for-nothing promises of unions are, more and more, falling on deaf ears.

maxutils said...

First, that should have been 'maintain', not contain.

Darren, I'm not chastising you. I think, in a perfect world, that your way would be best ... but, as an economist, I both know that unions create a more equitable platform for negotiations, and also most people don't know enough about the economics of labor negotiations to make a rational decision ...and given human nature which drives people to look out for their own best interests, if I know I can get an extra $700 bucks a year without sacrificing wages or benefits, my own selfishness and logic will tell me that I should do that--even if the union is doing really well for me.. The problem is that everyone else has the same incentive that I do, so, most make the same decision as me ... eventually. no more union, to the detriment of us all.

I agree with you that unions frequently exceed their boundaries, and also that they should not be donating to political candidates ... which I know is a source of you ire. So...people need to become more active in union elections, or run for office themselves. Given that you don't belong to the union, obviously you can neither run nor vote. I ran for union rep, and served for many years ...and yes, it was like banging my head against the wall. I don't believe I was ever on the winning side of any vote. Secondly ... we need a publicly funded election Constitutional Amendment that would forbid unions, corporations, and hopefully citizens from contributing to campaigns. That would remove the economic power of both sides, and provide for much more open elections.

Lastly, I identify as a Libertarian because it is my best match. But that's because I believe in individual liberty, in virtually every case (obviously, this is one. I recognize what appears to be hypocrisy, if you want to view it that way, but economic efficiency trumps), and in their economic plat form, including smaller and more responsible government and less regulation (again economic efficiency trumps). But there are a few points where I disagree ... Open borders? Um, no. Military only used to directly protect America itself? Just as naive as it was before WW I and WWII ...though I do think we've been overusing it. Many Libertarians are purist loons...I'm not one of them.

Luke said...

What's really going to chafe the union supporters is that VW WANTED a union. However, what they really wanted is illegal under US law.

From comments that I have seen, the floor workers in Chattanooga were in favor of a German style "works council", which under US law would be considered a "company union". Perhaps all they were opposed to was representation by the UAW, and not unions per se. Maybe its time to revisit Taft-Hartley.

allen (in Michigan) said...

Oh max, that "fairness" argument's getting old and mostly due to the fact that it's supported not by some reasonable rationale but by endless repetition.

An "equitable platform for negotiations" is encompassed by the free market. How could it be otherwise since both parties to an exchange must agree they see value in the exchange before the exchange can occur? If one party has some advantage in information or demand the advantage is inevitably transitory since the advantage will inevitably attract emulators, at the cost of whatever advantage was once enjoyed, or drive away trade if the price is set too high.

As much can be seen in the currently fashionable minimum wage issue.

Not that long ago the minimum wage issue was a dead letter because the demand for labor outstripped the supply. Now that the economy's turned down the price of labor's been driven down. Previously the worker held the advantage as evidenced by pay rates for the much denigrated "burger-flippers" that were over 50% above minimum wage. On the evidence of the rate of pay for an unskilled job there wasn't much need to that equitable platform for negotiations.

As for unions frequently exceeding their boundaries, that's inherent in the basis of unions.

When you have the power to coerce that which you haven't earned the all too human temptation is to give in to greed to the exclusion of all else. That happens with some regularity among unions which is why there's no American merchant marine worthy of the name. More recently there's the demise of the Hostess company which led to the prospect of a Twinkie-less future thanks to unions rapacity.

But to get back to your "fairness" argument in favor of unions, I've demonstrated that unions are unnecessary during economically buoyant times because the free market drives wages above the mandated minimum. If you're argument were correct, that employers hold all the power, wages would never rise above minimum wage. Yet even for unskilled, non-union jobs the wage was comfortably above minimum.

But the coercion central to unions isn't limited to just the employers. Customers are also coerced to buy products above market rate which means unions are only viable where the customer has no alternative.

When the American auto industry had a de facto monopoly on car manufacturing the unions could exercise their monopoly on labor. But once competition became significant the unions began their long, downward slide. The UAW helped make American-made cars more expensive then they needed to be so when there was a viable alternative the American consumer seized it.

You've carefully ignored the inherent unfairness of unions exercising their monopoly power to push the prices of products higher then they would otherwise be but I don't feel constrained by your desire to avoid the issue. Unions are a lousy deal for everyone but the membership and the discussion is about the societal utility, and moral value, of unions then the customer can't be left out of the discussion.

maxutils said...

Mark -- my understanding is that one of the reasons the union vote failed to pass (and it was close) was that VW was okay with the union, but suggested that the worker's council might be better ... I couldn't say if it is or not, but it would likely cut out a lot of overhead.

momof4 ... I almost agree with you, but not for your reasons... government, unlike the private sector, has no profit motive. BUT you do have a seat at the table. Learn about your school board candidates, and vote for the fiscally responsible ones. Or run yourself. I've worked for a district that didn't give any kind of raise, not even COLA, for right around five years ... the union isn't really the problem, it's the voters.

maxutils said...

Allen, I'm sorry the argument tires you, but your statement that support of unions is not based on some reasonable rationale continues to be wrong. And it continues to frustrate me, because you get so many other things right. Yes, in good times wages go up for everyone ... but above the equilibrium? No. And you haven't demonstrated that it rises above equilibrium, at least not here ... because I've seen no evidence of that accept "wages go up" which I readily concede. In general, the employer makes out better. Minimum wage increase? Idiotic. Most minimum wage earners are either second income earners or kids. They don't need it. and ... my premise about it is that it actually allows employers to establish a price floor. I'm all in favor of a free market for labor ... except that it doesn't work. And, in fairness, during downtimes, if the union is doing it's job, it should be negotiating wage cuts ... which is something that actually happens. And unions are actually of a high value to society ... because basically they are arguing with management over the excess (and by excess, I mean the economic definition, not unfairness) which is much more likely to be spent and recirculated by the lower income grow than the higher.

allen (in Michigan) said...

The reason, as I explained, why the "fairness" argument tires me is because it's unsupported by anything other then repetition. It's fair because it's fair because it's fair.

Come on, there's got to be a rationale a trifle more compelling then reiteration. Or there isn't which is why it's only repetition that's offered in support.

And if I translate "equilibrium point" to be the market rate then of course wages don't rise above the market rate. The market rate fluctuates with the demand and value of labor and anyone who's getting above market rate is doing so via coercion. What other reason would anyone have to pay above market rate for labor?

Unions however aren't "anyone". They enjoy a privileged position by virtue of the political power to legalize coercion. The union's the legal monopoly provider of labor and can thus act like any monopoly which is that they can abuse their customer, i.e. the employer.

As for the notion that unions will negotiate concessions in order to prevent the demise of the employer, that happens but it's not the way the smart money bets. There are bags of examples of unions destroying companies, and even entire industries, due to the dynamics of internal union politics. That there are exceptions hardly changes the fact that the only thing unions have to offer is "more" and in times when "more" is a bad idea for the fiscal health of the employer the desire to get "more" doesn't go away.

Responsible union leadership has been, with some regularity, pushed aside by loudmouthed rabble-rousers who make promises that lack even the tenuous connection to reality that the rejected, responsible union leadership might have. Greed's a powerful force the more so when you know you're getting what you have no right to claim.

Lastly, because you chose to ignore it the first time around, union demands are ultimately satisfied by the consumer.

The Teamsters had an agreement with management but it was the public at large that ultimately paid for the above market rate of pay of those Teamsters meaning everyone was a trifle poorer then they needed to be because Teamsters held a monopoly on labor and could force above market rate wages. Your concern for unfairness seems to end abruptly at the employer's door but that's not where the unfairness ends.

maxutils said...

Allen, the reason why I reiterate is that you, and Darren, and others seem to refuse to do any study of the economic principles. I'm all in favor of free market principles ... except when they don't work. Which happens in the labor market, without unions. And I keep suggesting you do a study of monopsony, and you keep not doing it, and mocking me. Despite the fact that I'm entirely correct, and you are derisive. Prove me wrong on economic principle, and I'll accept it. But the fact is ... you're demonstrating a complete lack of economic knowledge. And I understand that that is perhaps a strong stance ... but it's true. And I'm only throwing down the gauntlet, because no one on ths spot seems to be willing to go beyond what they think should be, and actually explore what works.

Darren said...

Max, you're doing an (incorrect) appeal to authority here. You've stated to me numerous times that unions *do*, via monopoly, gain higher-than-market wages for employees. If they didn't, what would be the benefit of unions?

The problem is that, by doing so, they grow to act as a parasite and eventually kill the host a la Detroit and the UAW.

That most of the country isn't unionized, and that we're surviving despite the horrendous "managing" and paying-off and socialism brought upon us by President Obama and his Democrat allies is proof enough that you're *quite* wrong. *Clearly*, free market principles *are* working for the almost-90% of the still working who are not unionized.

I know why you, strong libertarian that you are, now, all of a sudden, support unions. That you have personal reasons doesn't make you correct.

And I grow tired of your mischaracterization of my stance on unionism, which I made clear in this post--in a sentence that began with "to be clear".

maxutils said...

Darren, you illustrate my point. You are clearly ignoring the economics ... they AREN"T higher than market. Wages in non union industries are BELOW market. Would you not agree that an industry that has a monopoly will charge a higher price for their good than is economically reasonable (I'll just toss out one example -- name brand vs. generic drugs. Once a drug is patented, it gets a head start -- and I'm not even particularly opposed to that ... but compare that to the price of the generic once it comes out). The same situation occurs when few hirers of labor get to choose from a large group of interchangeable workers all fighting for a job... you can choose to ignore that, or you can read any microeconomics text. Any. I'm not mischaracterizing your position on unions, at all. I completely understand it, I think. You want a union that is so appealing that everyone would voluntarily contribute ... and I think that that would be fantastic. My point has consistently been, however, that that ideal can't exist. I proved a similar case, in my economics class, every single year. While I have definitely benefitted from being part of a union, 'all of a sudden' being in support of them is a ridiculous claim, and you know it. I was a union rep for about 5 years, and I constantly fought for the type of representation you wanted ... it still needs to be mandatory to work, but that doesn't mean you can't try to make it better. So, honestly...I resent both personal digs (and you know exactly what I mean) ... you are better than that. And calling me out on being *wrong* with your *trademarked* asterisks, when you won't look at the mathematically provable examples of monopsony, while not offensive per se ... does not show an open mind. If you actually read up on this, and still disagreed, I would welcome a debate on the topic.

maxutils said...

And as a side note ... why is it that you work at a unionized public school, rather than at a non-union private school? might it be that you make probably close to 20 grand more for doing the same job as the non unionized teacher? And I very much don't attribute that to public school teachers make too much money ... personally, I think it should be more. But if you're thinking that the union hasn't served you well ... I seriously question your perspective.

Darren said...

Yes, I could go work somewhere non-union, but those schools don't operate in a vacuum pretending that the monopoly doesn't exist.

You make my point for me--by saying that the union gets higher wages for me than I could get for myself otherwise (in a union monopoly environment).

This is why you and I used to suggest that math and science teachers should have their own union, or that secondary teachers unions should be separate from elementary teachers unions--because we're worth more than those other groups, and could probably get more if we were separate than if we're lumped together. The assumption, though, was that we needed a union to do that, when in fact what would be better would be *not* to have a union forcibly grouping us!

You can offer explanations all day long, but mandatory unionism is compulsion and that's too high a price to pay for a freedom-loving people. Both big-L and small-L libertarians think that, and you *used* to think that.

maxutils said...

Okay... a couple things. First, yes, I did support a separate union ... and the reason why I did that is explicitly mentioned 2 posts ago: interchangeable labor. One of the problems with public school unions is that they absolutely don't represent interchangeable workers, which I specifically cited as a requirement for a union being necessary. The difference between a primary teacher and a secondary teacher are massive (sorry, primary teachers ... you're just as important, maybe more, but the job description and requirements are very different ) At the secondary level... one of two things should happen and I argued for both, as a rep. Distinctions should be made for different courses... English teachers do far more work than any other teacher, (and I know this, because I've taught it, and in two other disciplines) ; math teachers have it easier than probably any other area except PE. But PE teachers have greater numbers, and good math teachers are hard to find ... I think there should definitely be a split between elementary and secondary unions, and possibly more separation at the secondary level... or at least an acknowledgement that not every subject should be treated exactly the same ...and you're entirely right, we've discussed this, I've argued for it, and we don' disagree. What you're missing is ... the wage given teachers reflects the market determined equilibrium wage much more closely than the private school, non-union wage. It's almost certainly too high or to low, but it's a lot closer than it would be. Yes: you get a higher wage than you would have in a non union shop --but that's the point. The firm can't afford to pay you more than it can afford to pay you ... but without the union, it can and will pay you less. Lastly, please don't presume to know what I think ... unless it's correct. And actually, not even then. I associate myself with Libertarianism, because I believe that government should not interfere unless the activity to be regulated negatively affects other people ... but as an economist, I support economic efficiency every single time ... which is usually associated with Libertarianism, but not always. In this case, not. I get the personal freedom argument ... I really do. But economically, it's shooting yourself in the foot. And if you really think that you've gotten a higher than market wage? why not sen the difference back to the government?

Darren said...

I *don't* think I'm paid more than I'm worth. I think teachers *on average* are paid more than they're worth. Math teachers are worth more than some others.

Supply and demand explains why, absent unions enforcing the "equal cogs" mentality, math teachers would make more than English teachers despite the hours of grading papers they do. You can't swing a dead cat without hitting someone who wants to be a high school English or social science teacher.

On the other hand, one wonders why an economics teacher is currently considered the same as a US History teacher.

maxutils said...

You're right ... economics teachers are MUCH more valuable ... as evidenced by the fact that voters continually show an utter lack of understanding of economics. As to 'wanting' to be an English teacher...get back to me after you've actually taught a full load of English classes. I 'm not even advocating more money for them ... I'm advocating smaller class sizes, so that they can assign and read more writing. You'll get no argument from me on the S/D aspect ... and I think I pointed that out. But a math teacher at a public school makes more than a math teacher at a private school. Always. And the most important factor in that discrepancy is having a union instead of not having one.

Darren said...

Except in districts where there *is* no union. There *are* a few of those in California.

But let's not forget that the union still exists, distorting the market everywhere. Guilds performed the same tasks, to the same ends, in the Middle Ages.