Dean's World

Defending the liberal tradition in history, science, and philosophy.

Do Unions Increase Productivity?

An interesting economic analysis I picked up at Instapundit says well, maybe so.

I like the reasoning.

I think that unions were vital and absolutely necessary a hundred years ago, less so 50 years ago, grew almost irrelevant 20 years ago... and I think they have started becoming more important again, and will only get more important again as time goes on.

Not due to idiotic pseudo-Marxist rubbish but just because they really are a useful counterbalance against big corporate power over employees and local communities.

The problem is that unions really need to update their thinking for the 21st century.

Related Posts (on one page):

  1. Challenge for My Free Market Loving Libertarian Friends
  2. Do Unions Increase Productivity?
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Martin L. Shoemaker (www):
The big flaw I found in that essay was his assertion that union workers aren't laxy, followed by his assertion that unions insist on padding the work force with more workers than the job requires. The net effect of the second assertion is laziness at the group level.

It's like the Men in Black line: no worker is lazy, but the workers as a group are.

That's the sort of union rethinking I would like to see: less emphasis on benefits and union growth, more emphasis on business growth. Because the ultimate job benefit is a job, and a growing business has more jobs. So instead of trying to protect turf, I want the union saying, "Hey, instead of cutting people to cut costs, here's how adding people can add profits." The workers are close to the work, and can see growth opportunities the execs can't. And the execs see a bigger picture, and can see possibilities (and limitations) the workers can't. If the relationship is less adversarial and more collaborative, everybody wins.
2.23.2007 8:13am
Chris Lansdown (mail) (www):
Except it doesn't say that unions increase productivity, it says that when unions are a minority of the workforce, some of them will increase productivity enough to balance out the rest's tendency to destroy productivity.

The premise of a union is that workers are interchangeable cogs. That's true of some types of jobs, but I don't see our economy headed in the direction where more and more workers are just interchangeable wet robots.
2.23.2007 8:18am
Mark @ Urthshu (mail) (www):

That's the sort of union rethinking I would like to see: less emphasis on benefits and union growth, more emphasis on business growth.

You won't ever see that on a general level because the union itself is a business within another, a kind of co-parasite. The only time they do stuff along those lines is when they have to in order to continue their existence or to increase benefits for members with seniority over their juniors. The union equivalent of cutbacks and layoffs.
2.23.2007 8:33am
Dave Schuler (mail) (www):
Lots of random thoughts. The key underlying concept of a union is limitation of membership. There's a big difference between guilds e.g. professional unions like those for teachers and physicians and unions like UFW or the hospitality workers' unions (they're teamsters now, aren't they?). There's also a difference between public employees' unions and other sorts.

The article's arguments that unions raise productivity look to me like a series of Broken Window Fallacies.
2.23.2007 8:52am
Dan the Highway guy (mail) (www):
I agree that there are areas where the article doesn't make a good case. With respect to the NY Electricians, it seems more that their high quality of work is motivated more by competition (they have to perform to be rehired for the next job) than by their being in a union. With constant performance review like that, your work has to be good quality. But many of the union abuses we see, in fields like teaching and auto manufacturing, relate to union protection of BAD workers (ask NYC schools).

IF unions could get past their old 'extort as much as we can out of ownership' mindset and into one more of ACTUAL partnership (not like what they talk about now), where they acknowledge business realities, evaluate the health of their company, and work with ownership to grow their companies, they might be useful. But as long as they play the 'gimme gimme gimme' game (and the article doesn't address this at all), with no regard to the industries they're in, they'll be a drag on the companies that deal with them.
2.23.2007 9:03am
Dave Schuler (mail) (www):
Note also that the argument made in the text using the NY electricians' union as an example is in direct conflict with the enumerated reason on the transaction cost benefit of union halls (unless you believe that union halls send out electricians based on the quality of their work).

BTW my own view is that unions serve a number of useful and beneficial function but nowadays the right to strike for wages is frequently abused. I believe that working conditions (defined as real working conditions not as management reducing the number of workers through capital investment) is a much better justification for a strike.
2.23.2007 9:10am
Mike (mail):
The update the thinking part is really important. It isn't 1937 anymore.
2.23.2007 10:38am
Jesse Hill (mail):
Since a union (specifically local 1 of the International Union of Elevator Constructors) is the only reason my father could send me to college (I took on loans myself, of course), I am biased.

That said, many unions -- especially for jobs like elevator constructors and such -- have extensive training and apprentice programs. This insures that the people being hired will be have to pass a rigorous test before being allowed to work on an elevator.

This insures that the elevator does not plummet 40 stories and kill you.

I daresay that they could use that sort of thinking with airport security and other areas. If you pay well, and get good benefits you're going to attract a better caliber of people.
2.23.2007 11:19am
Dean Esmay:
Unions are not based on the idea that workers are replaceable cogs. Quite the opposite. They're based on the notion that workers are not and should not be treated that way.

I have worked in a large corporate environment with absolutely no representation and I can tell you--there was no job where I ever, EVER felt more like a disposable, replaceable cog, or where I saw firsthand just how good an idea a union could be--or, even just the threat of a union.

Large corporate employers WILL treat people, especially low-level people, like mindless drones if they can. I've seen it and experienced it firsthand.

As for the notion that the union pads out with unnecessary workers: actually what that means is that they keep people working in such a way that there's excess capacity. The cost goes up, but so does the quality and reliability. That is entirely understandable and not at all surprising, on economic or common sense grounds.
2.23.2007 12:11pm
Dean Esmay:
...and it's not based on laziness either.

Besides. I've worked jobs in middle and upper management, and it's ridiculous how obvious it is that the higher you go on the food chain in a big corporation, the less work people really do.

That's not an insult, it's just a fact.

(Here we see once again, in my view, the damage that's been done over the last 3 decades by "conservatives" and "libertarians" who swindled us with the notion that large corporations are somehow good and efficient and noble and hard-working and the source of what is great about America, and unions are just lazy greedy bastards.)
2.23.2007 12:13pm
Chris Lansdown (mail) (www):
Dean,

The fundamental assumption behind collective bargaining is that there's a similarity between the people in the collection. There's no intelligent agreement to be reached between our employer and a secretary, a janitor, a welder, and a programmer. Our jobs are all so different that there aren't any good compensation strategies which apply to all of us.

And indeed, unions are typically organized along a particular line. The Electrical workers' union, the steam fitters union, the plumbers union, etc. The idea is that you want a plumber, not that you want George Stavendish or Mary Haleward.

There are no doctors' unions. There are no lawyers' unions. There are no painters' unions.

The screenwriter's guild is an interesting example. It's a sorta-pseudo union. All it does is set some (fairly low) minimums and have a few rules about attribution. It doesn't work at all like the unions for whom one member is interchangeable with another (e.g. electricians).

You're quite right that any large organization becomes hierarchical and treats those below it like cogs; unions do the same thing as large companies, since they basically just are large companies at this point (once you had professional union bosses, the nature of unions changed irrevocably). They're companies which sell manpower to other companies.

But you missed the point when I say that unions are predicated on the idea that workers are cogs. I don't mean that they're not human, I mean that they're interchangeable. The whole reason that 5,000 people can get the same deal is that those 5,000 people are interchangeable.

Of course there are parameters such as education level. Teachers are actually a great example of this. Teachers vary in experience and education, and they're paid differently for that. But you can't pay good teachers more than bad teachers; the entire union agreement is based on the idea that there aren't good and bad teachers, only teachers.

Actually, I'm mis-speaking a bit when I say that it's the idea behind it. It's simply an idea that your precepts can't contradict, because union agreements require homogeneity of the people they cover.
2.23.2007 1:26pm
Dave Schuler (mail) (www):

There are no doctors' unions. There are no lawyers' unions. There are no painters' unions.

Correction. There are European attorneys' unions. And there are many, many artists' trade unions (I assume that was what you meant by “painters”).
2.23.2007 1:40pm
Martin L. Shoemaker (www):
Accreditation bodies -- AMA, bar association, engineering licensing boards -- accomplish many of the same goals as unions. Jesse Hills example above shows that some unions accomplish many of the same goals as accreditation bodies. I think you have to look at these all as facets of a larger phenomenon.
2.23.2007 1:44pm
Robert West (mail) (www):
Martin: I think the accreditation bodies function more like guilds than unions.
2.23.2007 2:13pm
Gerbera Tetra (mail) (www):
Take everything Dean said about Corporations and apply it to unions and you've got my view on them.


Here we see once again, in my view, the damage that's been done over the last 3 decades by "liberals" and "socialists" who swindled us with the notion that unions are somehow good and efficient and noble and hard-working and the source of what is great about America, and Corporations are just lazy greedy bastards.




Original

Here we see once again, in my view, the damage that's been done over the last 3 decades by "conservatives" and "libertarians" who swindled us with the notion that large corporations are somehow good and efficient and noble and hard-working and the source of what is great about America, and unions are just lazy greedy bastards.
2.23.2007 2:41pm
Chris Lansdown (mail) (www):
Dave,

I meant here in America. Europe is just weird by American standards.

By painters, I meant people who put oil on canvas uniquely each time. I don't mean the people who put the same design on 10,000 tea pots.
2.23.2007 2:50pm
Dave Schuler (mail) (www):
You mean like Actor's Equity, the Screen Actor's Guild, the American Federation of Musicians, the National Writers' Union, and many others.

Here's a list of trade unions and their web sites. There are both artists' and professionals' unions.
2.23.2007 3:24pm
Martin L. Shoemaker (www):
Robert, I agree in the definitional sense. But the elevator construction union Jesse is describing is also acting a lot like a guild. And some accreditation bodies act less like guilds.

I think there's an encompassing concept we might call "collective", and a lot of category overlap within that concept.
2.23.2007 3:28pm
Arnold Harris (mail):
You bet your ass unions serve a purpose in America. I have a kid who worked for a while at non-union Walmart.

Arnold Harris
Mount Horeb WI
2.23.2007 6:40pm
Robert West (mail) (www):
Martin: I think the distinction between guild and union is a difficult one to pin down.

Here's my take: originally, a union was an organization of *employees* intended to help them in conflicts with management and/or owners. a guild is an organization of *independent tradesmen* designed to restrict entry into the trade and/or regulate relations between the tradesmen and people not involved in the trade.

Their interests overlap but are still somewhat distinct.
2.23.2007 7:27pm
Dean Esmay:
The proper way to view unions is that they are corporations.

They are just corporations that existed well before the modern statist idea of the corporation. They were known as "guilds" back then, and there was nothing dishonorable about that.

There still isn't.

Indeed, let me point out a simple undeniable fact of life: a publicly-traded corporation is a form of collective bargaining. And if you do not recognize this simple fact of life, then you're simply blind.
2.23.2007 8:29pm
Dean Esmay:
Please explain to me in 100 words or less how a trade guild is more of a statist and collectivist enterprise than a publicly-traded corporation.

100 words or less.

Go.
2.23.2007 8:31pm
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