More Thoughts On the Subject

I think the popular view that unions are an equal side that has as much power as the employer is a mistake. It's not a two way fight, even though that's how it's often portayed, especially in the media. I'm not saying it's not close, however. It's a fight for fair working conditions. Just look at where the money is. It's in the employers best interest to have low pay and poor working conditions. The only way unions get more money as a group is by slowly winning these battles and growing membership.

Also, maybe the reason it's hard to afford union-made and US made items is because of declining union membership.

Ryan makes a great point...the original purpose of a union is to fight for good working conditions. "Fair" is a subjective term, but a commonly used one. I would say that it is actually in the employers best interest to have reasonable (or fair) pay based in current reality, and also great working conditions. Otherwise people will be demotivated and will not work at peak performance. "Fair" is often based on relative scale of how others are paid. So if the average .500 pitcher is paid $3 million, it might be fair to pay another the same. But it has become unreasonable. Same as paying a CEO $8 million. Ridiculous...but if that's what others are paid, isn't it only fair?

If you compare them to other teachers, their pay is fair (class sizes being a separate issue). If you compare them to other degree-holding professionals whose jobs are equally vital to the future of the country (are any jobs as vital?), their pay is quite unfair. I think this disparity itself is the issue. As well as the class sizes.

Ben, I'm a former Vancouverite now living in Minnesota and going to Solomon's Porch...you probably don't know me. Thanks for blogging about this.

Hey Josh. I don't believe I do know you, but I've certainly met you on a number of occasions.

Rick and Ryan are both right. Ryan is citing what I call "old-style management". This is the type of exploitation that got socialism and unions going in the first place. Low pay, low expeditures on equipment, long shifts, and differing pay scales for men and women. This is in the employers interest because it is cheap. It still exits today in sweatshops and, to some extent, Wal-Mart.

Rick is citing "new-style management" which is a bit more focused on the psychological aspect of the work environment. Here it is in the employers best interest to pay workers well and have a healthy working environment because workers perform better (not to mention have better spending power to purchase products, defeating Marx's cash nexus).

I think my other big thing about this strike is the fact that the teachers, essentially, don't have the right to negotiate. Granted, the teachers haven't successfully negotiated a contract since 1993 (the old Social Credit government, I think). I don't know that teachers can reject a contract as not meeting their needs (however reasonable they may be), and then be forced to accept it is such a good thing. That gives the government a lot of lee-way as to how aggresive of a contract they want to offer. I suppose if it was the other way, unions could have a lot of power too, but as things are, this doesn't seem like a good system.

You forgot one thing about the new style management. It's really very similar to the old style. The psychological aspect is a more subtle form of union busting. They're throwing the occasional carrot, so to speak. Actually the old style management did the exact same thing, it was just more obvious and they didn't give up as much as what goes on now. When union organizing in an open shop would reach a certain point, they'd throw down a small raise or give up some part of the work rules they were holding on to. The extreme end of this new style is embodies in the business strategies of:00 AMerican Apparel. http://www.blacktable.com/graham050720.htm has a little bit in the middle of the article if you're not familiar with the company.

I don't know that i'd call it union-busting. I think new-style implies a better relationship between workers and managment with the latter being more approachable. I mean, yeah, it would be BAD management for employers to let unions have everything they wanted (just like it's bad for management to run roughshod over the unions). I think a healthy medium between worker interests and mild profitablilty can be reached (and that profitability should, in my opinion, be distributed equally:00 AMongst workers and management since all are equally important). Wow that sounded uber-utopian. Too much Bolshevik theory going into my brain these days.

This is an interesting discussion, given the research paper I'm writing for my financial management class. Northwest Airlines (I can already see you all shaking your heads) is our guinea pig, and we are analysing their financial situation in light of the other extenuating circumstances. We've determined that the root of all their problems, the reasons for their bankruptcies, and the reason that they lose money each year despite being the 4th-largest airline in the world, all boils down to one central problem: the massive rift that NWA management has allowed to exist and fester between itself and its multiple labor unions. It's not nearly as simple as I'm about to make it sound, but if NWA would pay their workers what they're worth, do what they say they'll do, and provide a good working environment, I believe they would surge back to the forefront of the airline industry.

Look at the company I work for. Everyone here may not love their specific job, but everyone here loves working for Cross, and we are therefore motivated to do our best for the company. We are paid well, treated with respect, and are made to feel valuable by our employer. Why should this business model not work for NWA as well?

The airline recently stated that they have over $1.5 Billion in cash solely for the purpose of purchasing materials. Bolts, nuts, engine parts, soda for the passengers, etc. They could easily divert some of that money towards the purpose of paying their employees. The unions haven't had contracts renewed for years. And for each massive layoff that occurs, the top execs get a matchingly massive bonus. That needs to change. New blood needs to be introduced to the airline, or another airline needs to buy it out. I think people fly NWA because it's really our easiest option, and they have a virtual monopoly in our area.

If anything, this class has taught me to have a lot more sympathy for the unions than I have in the past. I can definitely appreciate their plight more now. I seriously think that, if NWA's unions were well paid and well treated that their financial problems would go away. The airline measures success by the words "On Time." I think it should instead measure it by "butts in seats." People can't fly on planes that aren't manned by ALPA pilots, or aren't maintained by the mechanics and machinists, or crewed by flight attendants. NWA has all this capital that they are content to just let go to waste, and it's frustrating. They have the planes, why not use them? Oh, you don't have the manpower? I bet you would if you didn't give your people the ol' brown helmet treatment. People working means planes flying which means planes carrying people that have paid for their seats. People paying for their seats means money in your pocket (after operating expenses, of course).

Also, Ben, I just wanted to comment on your comment on equal distribution of "profitability." I think this is a fine line to walk, so I'm going to ask for clarification first. By profitability, are you saying everyone should get equal pay, or are you saying things like bonuses should be the same for all regardless of position?

i'd definately call it union-busting. it's the oldest trick in the book, and they've suceeded in making it all but invisible to most observers. Or maybe it's a conspiracy theory. But think about it. Would putting the working and middle class in a position where they can't afford to buy domestic products help or hurt the same companies that are trying to ship jobs overseas? As long as we're able to afford the same thing except made in a different country nobody will notice. Like I said, it could just be a whacko conspiracy theory, but on the other hand, that sounds like an awful lot of luck that just happened to time itself right and favored the small percentage of the top instead of the rest of us. Which is less likely?

Well, to play devil's advocate, you can't look at labor relations as solely the fault of greedy executives. It's not like the unions are completely innocent in the standoff between organized labor and management. Let's face it, there are union stewards out there (a lot of 'em) who continue to make compensation demands that are completely unreasonable. In the case of NWA, I think that may have been the case earlier on, but then NWA let the contracts expire and didn't care, and it then became an issue of the unions fighting for a more positive work environment. The unions have lost a lot of power in the last 20 years. It used to be that you were untouchable if you were in the union.

See, here's where the problems come in. Union workers are hired by X Airlines. The union stewards want more money, so they go on strike (assuming negotiations fail). The airline caves and gives into their demands. The cost of labor has just gone up. As that cost, an operating expense, goes up, their cash flow or liquidity goes down. When that happens, they have less money for research and development, training, purchase of capital, etc. The NWA 2004 Annual Report said that the average NWA salary (including hourly wages) was around $100,000. That sounds like a lot, but if you're making $45 per hour (as many of the mechanics and machinists are), 40 hours per week (assuming no overtime, which is unrealistic), at 52 weeks per year, that comes out to $93,600. Balance that out with the bag-smashers making less and the pilots making more, and it's not unrealistic to see that figure. And for an organization that employs approximately 40,000 people worldwide, that's a lot of money.

This is where it becomes the responsibility of both parties to resist the temptation to be selfish and money-hording. The union stewards (and the unions as a whole) are responsible for making sure that they're taken care of, but they need to realize that they have to give a little too. Management, conversely, needs to realize that their responsibility is to keep the company running, and they need employees to do that. They need to create a positive work environment, and pissing off your labor unions isn't the way to do that. So it may become necessary to un-unionize labor. Maybe that's not "kosher" or whatever, but a business is there to make money, bottom line. And if you're paying exorbitant:00 AMounts of money to your employees because they threaten to strike, that's money that you're not making. And a good, principled businessman will be able to determine the point in that trajectory where the labor expenses are balanced with income, and will see the inherent value of creating a good work environment (as my boss has done).

I don't mean to sound condescending, but do you guys really get how a business runs? Honestly, I didn't really until I started going back to school. But especially in this last class, I've learned a lot about how money works and the kinds of decisions that a business needs to make based on the finances (among other things). But typically discussions I've had with people who are really pro-union dissolve into a "the evil empire that runs the company is just out to get us," and from there it turns into a "damn the man" diatribe. I can appreciate your pro-labor perspectives, but a true understanding of business operations is helpful if you want to avoid sounding like a union guy who hates management (which you kind of do right now).

I'm not trying to pick a fight, just trying to present a reasonable other side to your arguments.

Actually, I think the oldest trick in the book is skull-cracking. And unions have been around WAY longer than management ever had the ability to utilize foreign labour.

I hear what you're saying, Ryan, about what's happening in the global market. A lot of people come into our store and they don't want anything made in Asia. On the other hand, they don't want anything that's too unreasonably expensive (and let's face it, even outdoor fashion is a bazillion times more costly than it needs to be). You show them an "affordable" jacket made in Vietnam, but they don't want it because it's been made with foreign labour. You show them a Canadian-made jacket and they don't want it because it's $800.

I don't think the move overseas was a method of union-busting. I think moving overseas was a realization that foreign labour was incredibly cheap compared:00 AMerican-made stuff, which really is a shame, but it's the reality of global economy. I think it came AFTER labour won a number of battles.

you know you should really be on facebook because it is all the rave. and then we could trade pokemon cards.

Ben, you hit it. We were in fact talking about this very thing last night in class. The fact that now we're becoming more of a service-based economy, and in today's society, people want things cheap, easy, and now. Dad was even saying that they outsource tudors from India. Silly. Anyway, this is where you as a business owner have to weigh the options between providing a good service and providing a cheap and fast service.

Example: When my computer broke in Italy, I called Compaq. They kindly sent me a box to my house, but I had no clue who the label was for. I called and asked if it was FedEx and they said it wasn't. The lady (from India) that I talked to said I could drive it down to the service center (note that she said I could "drive" it to the place). I tried to follow this line of thought only to discover that the service center was in Texas. Prognosis? Because of their outsourcing, I will never buy another Compaq product. In my job I've dealt with companies that outsource their customer service, and it's been constant frustration. Good for Pawneet Nahasameemapetilon for wanting to use his English to help me. But I resent when they tell me his name is "Pete" and expect me to believe that he really knows where Texas is in relation to Minnesota.

So as a business owner, do you want to make it easy for you by outsourcing and playing a lot less for your labor force? Or do you want to pay more for the labor and have customers come back because they are satisfied with the level of service they receive? And Unions don't have the power that they once had. Union membership is no longer guarantee of a job at a particular company. Perhaps this is because union members typically haven't developed an array of skill sets.

Anyway, I gots to go, so more on that later...