The Electric Commentary

Tuesday, March 06, 2007

Union Roundup

Jay Bullock is (sort of) taking me to task for my anti-union post the other day. He appears to be in favor of the "Employee Free Choice Act" for the standard non-reason that management has too much power. Management, of course, doesn't get it's power from the state. Unions do that. Management gets power through hard work, luck, risk-taking, and competition. Unions get there power from the fact that if you don't treat them as the government directs, the government will take away a bunch of your stuff through force. In my opinion, even legal union procedures constitute larceny by a goon squad.

Jay, and everyone he links to, cites the following study:

22% of workers surveyed said management "coerced them a great deal.' 6% said the same for unions. During the NLRB election, 46% of workers complained of management pressure. During card check elections, 14% complained of union pressure. Workers in NLRB elections were twice as likely as workers in card check elections to report that management coerced them to oppose (it's worth noting that in card-check elections, 23% of workers complained of management coercion -- more than complained of union coercion). Workers in NLRB elections were more than 53% as likely to report that management threatened to eliminate their jobs.

I would respond by pointing out that in both secret ballot elections and card check elections the most vocal union supporters are taking a risk. I will certainly not sugar-coat management tactics in defeating union drives. They can be harsh, merciless, and sometimes illegal. However, in a card-check election the average worker is exposed not just to pressure from the goon squad, but also to retribution from the goon squad. When everyone is forced to publicly state their position it opens the door to everyone being intimidated, especially after the fact.

Secret ballots are supposed to be secret, that is how they ensure that workers are expressing their true feelings. If there is a problem with ballots not being secret (which I haven't heard) that is a separate issue. Secret ballots should ensure that workers who vote for a union measure that is defeated suffer no consequences AND that workers who vote against a union that is eventually certified suffer no consequences.

Tactics during the union drive are just campaign commercials. Maybe management will threaten to shut down the plant. So what? That is a real risk of unionizing. Layoffs? Also a real risk of unionizing. Management should be using these threats.

I'm also not shocked that the stat cited above has "union pressure" during a card check election at only 14%. Those responding to the survey had to hedge their answers against the likelihood of being labeled as scabs if the union won. Union intimidation probably prevents an accurate survey from ever being taken.

But let's get to a few links.

Tyler Cowen offers this deal:

I propose a deal. I'll agree that unions, in the best natural experiments we have, boost wages by about 10 to 20 percent. On the other hand, will Ezra (and others) agree that unions are mostly detrimental to the rate of economic growth?

If so, the utilitarian evaluation will boil down to the choice of discount rate, keeping in mind that under the left-wing account the gains follow mostly from redistribution more than from wealth creation.

He then adds:

Union supporters? Do we have an epistemic deal about how you are willing to lower the growth rate? And can we pull your true discount rate from the Stern/global warming debates? (I recall Jane once writing that a zero discount rate would require her to revise everything she believed, but I think the opposite is sooner true.)

Oh, did I mention that the union wage premium, especially for private sector employees, has been declining and may be disappearing altogether?

And one more:

To some extent higher union wages translate into higher prices for consumer goods. Over a five year time horizon I'll guess at 50 percent pass through, adding that most of these goods are bought by other laborers. Just to be flippant, for each dollar gained by a union member, I'll guess that labor market "outsiders" lose 50 cents.

Notice we haven't even counted negative effects on the rate of future economic growth, or for that matter costs to employers.

We already don't have workers, viewed as a class, coming out ahead.

I would be curious to hear the numbers assumed by those who wish to encourage labor markets by law. I would be curious to hear how much they think, over say a ten-year time horizon, wages deviate from labor productivity.

Inquiring minds wish to know.

Megan McArdle asks the following about the "Employee Free Choice Act":

Let me put it another way. What do pro-union organisers think of card check--and delivering the cards to employers as well as union organisers with no penalty, should the union fail, for firing or otherwise making life miserable for the yes votes? If you think that this is in some way wrong on principle, then how is it not wrong for unions?

Finally, let's give Jay equal time:

The Brawler writes about unions so I don't have to. All youse who are afraid of imaginary union goons (like the scary 300 pound men of Paul Noonan's fevered imagination) are apparently unfamiliar with the facts.

In the next sentence of the very same post Jay write the following:

Speaking of studies that burst conservatives' imaginary-world bubbles, it turns out that immigrants--including illegal ones--boost pay more than prison populations.

Of course those same immigrants see their opportunities greatly reduced by measures like the "Employee Free Choice Act" by pricing them out of the market, and immigrant labor drives up wages for reasons that unions inhibit. Immigrants take lower-skilled positions and force those who want higher wages to obtain more skills and take better jobs. As the LA Times put it:

UC Davis economist Giovanni Peri, who conducted the study, said the benefits were shared by all native-born workers, from high school dropouts to college graduates, because immigrants generally perform complementary rather than competitive work.

As immigrants filled lower-skilled jobs, they pushed natives up the economic ladder into employment that required more English or know-how of the U.S. system, he said.

"The big message is that there is no big loss from immigration," Peri said. "There are gains, and these are enjoyed by a much bigger share of the population than is commonly believed."

The labor inflexibility and artificial wage premiums delivered by unions are detrimental to this type of free market labor force allocation. That is why immigration helps to drive economic growth while unionization tends to kill it.


  • Thoughts.

    First, I do understand how union intimidation may be surveyed as less in card elections... unions are secure in the vote once they have enough cards. Mainly though based on how many card elections there are 5% probably isn't much outside the confidence interval / margin of error.

    Mainly, union pressure doesn't have to be explicit with card elections. On the first point, if some buddies come up and ask you to sign a card, you not only have intimidation, you have peer pressure, whether it is intended or not. Reprecussions can be in damaging social relationships or worse. People who discount peer pressure need to review Psych 101 (hint try the chapter on social norms & group behavior)

    Employer intimidation can be reported and investigated - at practically no cost to the union or organizers. It isn't perfect, but nothing is.

    Maybe the card vote is a proper balance against employer intimidation, but I'm highly suspicious that it is the effort of unions trying to address their declining membership.

    I don't completely agree with Paul on at least one thing.
    Illegal immigration only helps those employees who are able to or actually do obtain more skills and take better jobs. Many don't. Whether it is because they don't have the money to acquire new skills (or the time) or because they are unmotivated or untrainable, some do turn to crime.
    Illegal immigration can also supress wages and working conditions for those who work in the same industry or position because illegal immigrants will tolerate these condtions (not only because of market forces, but also because they are afraid to speak up and unable to legally complain). Of course, the argument of Petri's that this is a smaller percentage of the population than the percentage benefitting from cheaper prices or higher profits is likely to be true, but you could use that argument to justify subjecting many individual segments of the workforce to poor conditions or poor pay.

    By Blogger Scott H, at 5:55 PM  

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