Because I may ruffle some feathers I feel the need to establish my bona fides, as it were. I have been a union president, a union chief negotiator, and held other offices in two locals, and won an award for organizing, so I am not criticizing unions as an outsider. In fact I am not criticizing at all, but I will be offering strong advice.
I have written about the New Deal a number of times, but I haven’t mentioned how President Roosevelt managed to pay for all of the public service programs he created in the midst of a massive depression. He did it by taxing the rich and the corporations. (If you want to know where the 90+% top marginal income tax rate came from, look no further.) And more than a few Republicans went along with this. Why? Roosevelt used fear as a motivator. The fear was that with 25% unemployment, the labor unions, the Socialists (real ones, not like we have now, that is figments of Fox (sic) News imaginations), and Communists were going to revolt and demand a new way of doing business. The only way to hold off the barbarians at the gate, as it were, was to address their needs. So, in the middle of the depression, we got Social Security, we got unemployment compensation, we got government jobs (via the WPA, etc.), and unions got more say.
Everything was as we say, peachy-keen and then this happened:
This corresponded with a severe decline in the numbers of Union jobs. In the 1960’s, about a third of all jobs in the private sector were union jobs. Now, there are less than 7% of all jobs are union jobs. And what have the unions done? Well, they have hoped for more help from the Democrats but most recently even with Democratic control of both houses and a Democrat in the White House, unions couldn’t even get a bill passed that allowed them to get certified with a card election, which was the standard procedure in the past.
So, I have to ask: how’s that hopey, changey thing doing?
The big problem with government granted rights, is the government can take them away. And after the New Deal, the Captains of Industry and the Monied Interests began working to roll back all of those changes. Gone are the Socialist Party and Communist Party as viable organizations. (Yes, they had significant membership in the past.) Gone are the high marginal income tax rates for the wealthy. Gone are the higher corporate tax rates. Gone is labor union power. And what is currently under attack? Answer: Social Security and Medicare and unemployment compensation. And when they are done, we will be welcome to all of the crumbs from the table and the New Deal will live on only in memory.
And the labor response? Wishin’ and hopin’ and prayin’ and not much else. Currently management uses threats to unions of plant closings, outsourcing of jobs, etc. to extract wage and benefit concessions and our unions, fearful of their loss of power and, yes, fearful for the welfare of their members, cave in. They aren’t alone, businesses bully state and local governments for tax concessions to “keep them where they are” or to “entice them to come into their communities.” They don’t have to bully the federal government, they’ve bought all of the legislators off.
The Captains of Industry and the Monied Interests created think tanks (in the 1970′s, look at the graph again) and developed a plan and then worked the plan (look up the Powell memo if you haven’t heard of it; the “conservatives” liked it so much it was worth a seat on the Supreme Court for Powell). The unions? No plan, just wishin’ and hopin’.
It is time to realize that we have a bad hand and we are playing with a short deck. In order to be successful, either the rules have to change (that ain’t happening, at least not in our favor) or we need to change the game.
What to Do, What To Do?
Simply put, leverage can be had by going into competition with said businesses. American workers are the most productive in the world. If Company X wants to take their jobs to China, how should a union respond? It has all the workers. It has capital in the form of a strike fund, which can be leveraged to finance a business, it could buy up the abandoned assets of said company and run that enterprise, all the while pointing out that the former company took their jobs to China and your company is making not just Union-made but American-made products (with lower shipping costs, too).
Frankly I don’t think most unions are competent to run business in the American model and to do so would be just trading one “Man” for another . . . as “the Man.” But, what if the new business were run as a co-operative/joint venture by the workers? The union plays the role of capitalist, that is it provides the money or leverages a loan from a bank (it would be nice for the union to own a bank, but that isn’t required). The workers would own the company and run it. Certainly, the costs of executive compensation would drop substantially, as would siphoning money off to pay to pay shareholders. Fewer managers would be needed and workers would have to take a much, much broader interest in the company than in just “punching a clock.”
The competitive advantages are immense: highly productive workers, American-made products, low shipping costs, lower management costs, etc. The cost of labor might be higher, I won’t say “will be” because if you hire a worker half as productive for half the wage there are no labor savings. Our labor costs more but is more productive. (Germany has even higher labor costs and somewhat lower productivity, yet is the #2 exporter of manufactured goods in the world (behind China)! manufacturing is not dead!) And think about what will happen to productivity when everybody has their mind in the game!
This is not magic, this is a fracking co-op! We have done these since Revolutionary times. We are good at it and with guidance and some education we can get better.
And imagine the leverage the union will have at the bargaining table for its ordinary business if Company Y threatens to take its jobs to Mexico. The union, after full consideration, might just look at the situation and ask “Will you be selling the plant? We can use it.”
Napoleon Hill had a precept that went something like “do each job with the intent of making that job obsolete.” Putting yourself out of business sounds scary, but it is a way to the future. The union business as it is currently framed is nonfunctional. But there is a role for a group who is willing to lead labor to a new future and there will be a role in that future for labor unions. There is more training of workers needed, business, advice, counseling, financing, etc.
It is change or die time. What do you want to do?