The Electric Commentary

Wednesday, July 27, 2005

Anti-Union Animus

P.J. O'Rourke was once arguing with Cornell West about drug companies, and Cornell got off on a long rant about how drug companies squander resources by researching frivolous drugs. West asked:

Would you prefer drug companies that looked for more remedies for sexual impotence or a vaccine for AIDS?


To which O'Rourke responded:

It depends on if I had AIDS.


I think the Union mentality is similar to that of Mr. West in this scenario. Unions concentrate on increasing the compensation of workers and improving their working conditions. They tend to make broad claims of improving societal working conditions in general. But it is important to remember that they can only do this for you if you are in the Union. And Unions have a vested interest in limiting the numbers that they employ. Even Unions cannot completely disregard the laws of supply and demand.

I can't get my brain around this mindset. I'm well aware of the historical importance of Unions, and I have little doubt that workers were screwed in the early 20th century, but today Unions really are dinosaurs, and I have several philosophical problems with them.

First of all, Unions derive their power from force and monopoly. I'm not a big fan of either of these. When a Union is certified as a bargaining unit they are granted an artificial monopoly. At that point management has to do business with them. It has no choice. This puts them in an awkward situation, in which they are forced into being actively hostile towards their work force. As for the force part of it, it's no secret that Unions still engage in strong arm tactics (not to mention cruel acts of peer pressure) to increase membership. Strikes are, more often than not, conducted using illegal tactics as the police force charged with keeping strikes in order is also unionized. And then there's the Mafia connection.

And labor law may be the most screwed up body of law out there.

Let's say that you're management, and your employees are engaging in a strike, which for legal purposes, we will call a labor action. If you decide to fire someone participating in that action and the National Labor Relations Board determines that you were motivated by "anti-union animus" in doing so, you're subject to penalties, including, but not limited to, reinstatement of the employee, and back pay.

When a group of workers are attempting to organize their "brothers" there are so many rules that management is almost bound to break a few. I'm not as well versed in labor law as I once was, but basically management must provide the tools of its own demise. They have to provide bulletin boards to post on, records of employees, and woe to the owners who make the reasonable observation that a plant may close if the workers unionize. The NLRB hates that.

And why are strikes even allowed? What rationale is there to prevent the firing of employees that refuse to work, especially if there are other people perfectly willing to do the job? I've always wanted to be a scab.

I'll admit that a lot of my anti-union animus stems from a visceral reaction towards collectivism of any kind. When you join a union you abandon your individual accomplishments and put your faith in the accomplishments of the sum total of your co-workers. Those of you that have co-workers can see the folly in this policy. My first real job (after my paper route) was as a cashier at a grocery store, and I was forced to join a union. What did I get for my membership? I got health care, a pension plan, and guaranteed raises at specific intervals. All I had to do to get this was pay dues which reduced my pay to basically minimum wage.

I was 16 years old.

I did not need a pension plan, or health care, or even guaranteed raises. The raises were geared towards long term employees, not kids with summer jobs (and part time jobs during the school year). I gladly would have traded all of these for an extra 50 cents an hour, but I couldn't because someone else was in charge of bargaining for me, and they did not have my best interests in mind.

I can't give up my individuality that easily. It bothers me. My old labor law professor, who was sympathetic to organized labor, drove out any last lingering sympathies for organized labor when she referred to union organizing tactics as engaging in "moral suasion."

Yeah, just like Al Capone.

12 Comments:

  • I know you want to talk about unions, but since you opened by discussing the West-O'Rourke debate, and since I saw that debate, I'd like to comment on it.

    I think the reason West and O'Rourke were talking past each other in that conversation is that neither of them completely understood the real situation regarding prescription drugs. I'm going to oversimplify here because if I didn't this post would take me hours to write and no one would read it.

    West thinks drug companies should be in the business of doing good by developing drugs that cure serious diseases. He doesn't seem to realize that a drug company won't stay in business long enough to do that if it isn't making money, and one of the best ways to make money is to develop drugs that enhance quality of life, including sex life. In other words, you won't have the money to develop a vaccine for AIDS unless you acquire the money by selling Viagra.

    But O'Rourke then seemed to think that drug companies just want to operate on the free market. They don't. They want to operate as they currently do, which is to say by being propped up by the U.S. government. There are more, but let me just give three simple examples of how the feds do that:

    1. The National Institutes of Health (i.e., your tax money and mine) gives drug companies money to do research and then allows the companies to keep the patents on the drugs they develop with that research.

    2. The federal government restricts citizens from buying cheaper drugs from other countries.

    3. Medicare is prohibited by law from negotiating for lower drug prices.

    Anyway, sorry to hijack your union thread, but I think this is an important issue that doesn't garner enough intelligent discussion.

    By Blogger MDS, at 10:59 AM  

  • I pretty much concur with the union thread. I have heard first hand accounts of unions acting like intimidating hoodlums toward their members, decreasing productivity, and holding down the salaries of those who excel in favor of the collective. The teacher's union also seems to be a counterproductive force by opposing many efforts to improve public education. That said, unions were important in establishing a quality of life in the U.S. and could still play an important role in workplace safety and other issues. Instead they, as many political entities do, act to preserve their own power and members interests. They appear to have been short sighted in this as they are have contributed to the decline in US manufacturing, which has in turn reduced their numbers. They need to evolve, which they haven't.

    As for drug companies, I believe that example #1 is an incentive by the gov't for drug companies to develop those useful, but unprofitable drugs and makes sense to me (although it could be implemented poorly); #2 allowing people to buy foreign drugs would basically defeat the purpose of drug safety efforts (there is a reason drugs are regulated) and disincentivize the development of new, useful drugs by allowing copycats to clone drugs that cost $$ to develop, #3 I don't really understand enough to comment.

    By Anonymous Scott H, at 12:42 PM  

  • S'ok M, those are all good health care points. On point 3, Medicare has all sorts of weird effects on drugs and drug prices. They should obviously be allowed to negotiate lower prices, that policy is ridiculous, but if it did not exist, the buying power of medicare would have other perverse consequences, such as driving producers overseas, or the creation of a middleman (it happens alot when something is nationalised. Alcohol in the post prohibition era is a good example). But that's speculative, and in general, if you can get something for a lower price, you should do so.

    The fact that point 2 exists is stupid. I hate embargoes on cheaper products. I'm against nearly all trade restrictions, including this one. If other countries are willing to subsidize us, we should let them.

    As for point 1, I have friends that swear that nothing would get done without the NIH. I'm skeptical of all subsidies, and in this instance I suspect that they do two harful things. The first is to steer money away from more efficient causes and instead give it to more popular causes. The second is to create a "drug bubble." I think the drug bubble shows up in the number of redundant drugs. I'm in favor of having some redundant drugs in case some start to lose effectiveness over time, but at this point comapnies seem to be using copycat drugs as patent renewals, and that's not right.

    Bascially, I'd be in favor of less meddling in health care in general

    By Blogger PaulNoonan, at 1:33 PM  

  • I still think point #2 has some valid purpose. The problems with buying drugs from many countries is that they are largely unregulated. A product where the quality is often hard for most consumers to evaluate and can have serious effects does need a certain level of regulation to maintain quality. People buying drugs from Mexico and Belize would pose a serious problem. The US would at least need a list of countries where drugs could be bought from and which couldn't, which would inevitably become a political issue as much as a health one.

    By Anonymous Scott H, at 4:29 PM  

  • But if I need a drug to survive, and I can't afford it at its American price, but I can afford it at its French price, what possible justification is there for the U.S. government to prevent me from ordering it from a French pharmacy and having it shipped to me in the U.S.? Even if France doesn't do as much as the U.S. to regulate the quality of its pharmaceuticals (and I seriously doubt that), who am I hurting if I take a French drug?

    American politicians don't oppose importing drugs for safety reasons. They oppose importing drugs because the drug companies that finance their campaigns know they've got a sweet deal in the U.S. and don't want Americans getting the good prices that they give people in every other country. Again, the key is remembering that the drug companies don't want to sell their drugs at market value, they want to sell their drugs at the artificially raised value that American government policy allows.

    By Blogger MDS, at 4:40 PM  

  • First, let me state that I am not against opening the US market to foreign drugs in principle. I said "some valid purpose". I agree that drug companies are probably using their patent window and monopoly on specific drugs to keep prices up. I also don't think there would be a problem with people getting drugs from France or other developed countries (although these standards are on average less stringent, but very likely still safe). The problem would be that some countries have almost no (or very ineffective regulation) and these places will have the cheapest drugs. So when China or Bangladesh or some other country lobbies for the right to sell drugs here there could be a risk to safety. I actually don't know either's drug standards, but I do know that they wouldn't be respecting patents, which, as much as we all want cheaper prices, are necessary to allow the company that paid the research cost to recoup them.
    That said, as Paul suggests, I have no doubt that drug companies are working the system to maximize their profits and that there are things that need to be fixed, (specifically "me too" drugs) I just am wary of broad, simple sounding solutions such as allow importation. Generally situations like these arise when a rule created for genuine reasons is carried beyond its purpose by those groups who it benefits.
    Another point is that there is a reason these countries have cheaper drugs than the US (such as #3 or flaws in our health care system). Fixing these underlying problems is probably more effective and address a wider range of problems.

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  • Paul Noonan: Look, I don't know you from Adam's housecat, but you have been watching WAY too many organized crime movies. That's the problem with most people today with regard to Unions. They get it from movies or they get it from FAUX News. Maybe your experience as a youth in a Union warped your sense of their function and purpose. I came from a Union family (IBEW) in Mississippi, and if it hadn't been for the Union, we would have had NOTHING. Maybe you're a millionaire or something now, and you don't have to worry about it. But if you aren't, why in HELL would one Middle Class person begrudge what a Union does for another Middle Class worker? It makes no sense. It seems like millions of Americans WANT to be used by the corporations and the wealthy. WTF? Someone else on this blog said "Instead they, as many political entities do, act to preserve their own power and members interests. They appear to have been short sighted in this as they are have contributed to the decline in US manufacturing, which has in turn reduced their numbers." What the Hell? Unions are SUPPOSED to look out for their members' interests!!! What the Hell is wrong with that? And as far as the decline in manufacturing goes, CORPORATIONS DID THAT BY RACING TO THE BOTTOM OF THE LABOR POOL. WAKE THE HELL UP!!!

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