Wednesday, March 8, 2017

Unions are Expensive

Greta at Minnpost wrote the following:
" But the facts remain that unions’ membership decline in Minnesota has been largely at the hands of automation, globalization, and a business climate that seeks to prevent workers from organizing more than in the past — things that don’t appear to be going away anytime soon."
Of course, that riled me...
"automation, globalization, and a business climate "

Why do folks work so hard to avoid saying the obvious?

Unions declined in the Private economy because they increase the cost of products / services and most American Consumers do not want to pay more to support the higher wages, better benefits, etc of those employees?

And the only reason the Public employee unions have grown is because there is pretty much no competition allowed in that sector and the tax payers don't get to choose their service provider.

I wonder what would happen if we told citizens that their tax bill would be reduced by 1% by making public employee unions illegal again. Would they vote for the tax reduction or not?" G2A
 I think Unions could be useful if they partnered with the employers to ensure only the best employees were in the union ranks, that their education / performance was maintained, etc.  But this demanding more pay, more protections, more etc without adding any measurable value is something that consumers simply will not voluntarily pay for. Therefore if the job can be moved, the consumers will demand that it is.


The reason that service jobs and others can be unionized in a region is because the worker is needed in that city...  Therefore the costs go up and the customers pay it...  Or they hold their convention in a lower cost city.

45 comments:

Anonymous said...

And slavery is cheap.

--Hiram

John said...

Agreed, good thing that is illegal.

Thank you for acknowledging that Unions increase the costs of doing business and that someone has to pay for it. :-)

Anonymous said...

They also increase what people get paid.

Given that one person's cost is another person's revenue, which one is to be preferred? Cost or revenue?

If shareholders are allowed to bargain collective through corporations, does it make sense for employees to try to bargain individually?

--Hiram

John said...

You are correct.

In the case of Public Employees, they get paid more and the processes / rules drive extra cost/waste... And the tax payers have to pay more in taxes.

The collective bargaining comparison is interesting. Though I am not sure if it is relevant. Investors just give money and are not guaranteed a positive return. Where as union workers demand many guarantees.

Anonymous said...

Though I am not sure if it is relevant. Investors just give money and are not guaranteed a positive return.

But then they don't work, either. They simply cash dividend checks. Are those checks a waste?

--Hiram

jerrye92002 said...

Collective bargaining is a terrible situation, especially in public worker unions where they actually sit on BOTH sides of the table. You have one side, allowed by law to "put a gun to the head" of the other by refusing to carry out their side of the implicit contract to work, while the other side--management, to be clear-- is not allowed by law to abrogate its side of that implicit contract by firing everybody. I have even seen cases where, for business reasons, a company will say "we are closing this plant," and the union says, effectively, "If you close the plant we will go out on strike"! I believe in some cases it even went to court. How abstruse is that?

John said...

Or in the non-Right to Work state's where the law forces every employee to pay into the union coffers whether they support the union or not... Very strange.

John said...

As for dividends, please remember that an investor is not guaranteed them by any contract.

Anonymous said...

Collective bargaining is a terrible situation, especially in public worker unions where they actually sit on BOTH sides of the table.

That's why I think individual voter should be required to negotiate with individual employees.

--Hiram

jerrye92002 said...

A simpler solution would be to simply ban public employee unions, or to prohibit them from participation in elections.

Sean said...

"Or in the non-Right to Work state's where the law forces every employee to pay into the union coffers whether they support the union or not... Very strange."

Are you suggesting that people should receive services for free?

I think Hiram's formulation is exactly correct. A corporation is "organized capital". Why shouldn't there be the ability for there to be organized labor?

John said...

Sean,
I support that the Union should provide enough value to it's members that they are willing to freely pay for the service.

Please remember that I have no problem with organized labor and collective bargaining.

I have an issue with all the laws that enable and protect it, and increase the costs to us consumers and tax payers.

All,
Another good example of how Liberals support higher cost government and higher taxes is...

MN Prevailing Wage Laws...

Sean said...

"I support that the Union should provide enough value to it's members that they are willing to freely pay for the service."

That just ain't the way the world works, John. How many people would pay if you made taxes voluntary? Lord knows the POTUS did everything in his power to lower his tax bill.

"Please remember that I have no problem with organized labor and collective bargaining."

You don't? Your previous sentence contradicts the entire notion. You can't say you don't have a problem with collective bargaining and then say that anyone can opt out of it. That's not collective bargaining, then.

John said...

collective

ADJECTIVE
1.done by people acting as a group: "a collective protest"

NOUN
1.a cooperative enterprise

I don't see anything that everyone has to be involved.

John said...

Sorry but the idea of 51% of employees forcing the 49% into a union situation just seems wrong to me. Probably why I have avoided companies that have unions in them.

My first employer had 2 Unions in it... I was in a on Saturday working with a guy from the Steel Workers and we were short a part so he walked into the warehouse to grab one... Apparently that violated the Warehouse workers contract and the company had to pay the on call Warehouse guy for 8 hours of sitting at home...

That company worked on the Railroads and they have incredibly wasteful situations. It was incredible the number of times we had to wait for the right type of employee to show up while a 10+ million dollar piece of equipment and it's crew sat idle.

John said...

Food for Thought

Sean said...

"Sorry but the idea of 51% of employees forcing the 49% into a union situation just seems wrong to me"

The system is the system, right. After all, we're being led by a President who earned over two million fewer votes because of the system. (And as conservatives say all the time, those 49% are free to go find another employer. Isn't that how the market is supposed to work?)

As for the rest: unions don't unilaterally impose contracts on employers. It's incumbent on leaders of companies not to give in to stupid demands. If they sign a contract with dumb provisions in it, that's on them.

jerrye92002 said...

"...unions don't unilaterally impose contracts on employers." Really? What is the alternative to accepting union demands, or at least acquiescing to most of them?

John said...

Actually in this case "the system is the system" isn't quite correct.

As we have found in many states that have adopted the Right to Work laws. So there is hope to fix this problem in MN also.

Maybe in 2019...

John said...

Imagine that 28 of the States are Right to Work now... Even Michigan...

jerrye92002 said...

As far as I am concerned the union movement went wrong when the union leaders became independent, highly paid "officers" not directly involved in the business. When they were part of the workforce, they could collectively force improvements in working conditions and wages. But since that point, the leaders have to take an adversarial role against the employers, and occasionally call a strike, to prove they are worth their high pay. They do not suffer during the strike, and they don't suffer much if the whole factory shuts down and puts everybody out of work. Unions are the source of their own problems, and only forced unionism and employment law keeps them going in the private sector. The public sector unions cannot "damage" their employer and exercise some considerable control over their employer through political activity. The MN teachers union is always among the top contributors.

Federal results for 2017:
"The top three contributors (including money to candidates, parties and outside groups) were:

The National Education Association ($23.7 million)
American Federation of Teachers ($8.8 million)
AFT Solidarity ($425,000)"

93% went to Democrats.

Sean said...

"What is the alternative to accepting union demands, or at least acquiescing to most of them?"

They should stand strong if they think the union position is ridiculous. American Crystal Sugar locked employees out for almost two years, for instance.

Sean said...

"93% went to Democrats."

That's the real problem. If they gave money to Republicans, you wouldn't think it's a bad thing at all.

John said...

Sean,
That does tend to be some of the problem...

Dems fight for higher Union wages.
This is paid by the tax payers.
Dems fight for forced dues collection.
Unions gives much of those dues back to the Dems.
Dems fight for higher Union wages...

Remember one of my favorite conflict of interest examples. One November the RFT paid to get 3 new Board members elected. ~3 months later that same board was negotiating the pay raise of the RFT personnel. This is so strange.

jerrye92002 said...

"They should stand strong if they think the union position is ridiculous." And violate federal labor law, as well as going out of business? The only reason a few companies (Iowa Beef Packers are another) are able to fight what are essentially extortionate strikes are because they are privately held and not engaged in interstate commerce. Any union demand for higher wages must be driven by either an inflationary adjustment needed, or a productivity gain to be had from the higher pay, or the company loses the market advantage it has and the ability to pay /anybody/. Most union demands, such as work rules, actually work to the opposite of the goal of a viable business. I collect such stories, driven by my father's battle with the union. Here's one:

So, management came to the union and explained to them that their business (commercial building supplies) was highly cyclical-- most sales were in summer-- and that they needed to bring in temporary help-- college students on break-- for that period. With 300+ competitors, they had no choice, and promised that no union employees would be replaced or eliminated if this was done. The union refused to permit it, and management said the only alternative would be to move the plant to Mexico where ALL labor was cheaper. A few days later, a dozen college students on summer break walked in, and the union walked out. After a day of picketing, a large flatbed truck pulled into the dock and the large 100-ton press was inched onto it. "What are you doing?" said the union head.
"We are moving the plant to Mexico, just as we said."
"Wait, wait, let's talk", he said, and the [can we say unreasonable] strike was over.

jerrye92002 said...

"If they gave money to Republicans, you wouldn't think it's a bad thing at all." Wrong, I /would/ think something radically wrong-- with the Republicans. These political gifts aren't going to support the "best candidate" in every race. They are going with some expectation of a return in pay and policy. They are "buying" these representatives, especially in races like school board. Unions elect the school board and then the school board "negotiates" with the union. Nothing corrupt here, move along.

John said...

Okay I'll play the devil's advocate here...

How is this any different from the rich guys getting GOP politicians elected and then those politicians voting on a huge tax reduction?

Sean said...

"How is this any different from the rich guys getting GOP politicians elected and then those politicians voting on a huge tax reduction?"

It's not.

Except union have to disclose their campaign donations, and the rich guys funnel their money into unaccountable 501 groups.

jerrye92002 said...

Uhh... I see a difference, ably stated by a Democrat politician not long ago, something like "When Republicans get elected you get to keep some of your money; when we get elected, we TAKE your money."

John said...

I went looking for your supposed quote... No luck...

My guess it was created by someone on the far right...

jerrye92002 said...

If I recall correctly it was a "minority" DFL representative from Minneapolis, if that helps. And it's true in the general sense even without specific attribution.

John said...

Of course it is NOT True in any sense.

Looking at the old trusty continuum at the bottom of this page

Normal GOP folks are probably comfortable with the local, state and federal governments collecting and managing ~25% of our economy.

Normal Dem folks are probably comfortable with the local, state and federal governments collecting and managing ~45% of our economy. They mostly want to put healthcare in there, which has it's pros and cons.

Neither side wants to take all the money. That is just silly "Conservative talk".

John said...

By the way, remember that we are at ~37% today...

jerrye92002 said...

I'm sorry, but you are missing one essential of the liberal catechism, rephrased of course, that is: "There is no end to the amount of good that can be done with somebody else's money." Therefore liberals will not stop at 45%, they just don't want to get caught saying that. And conservatives aren't happy going up to 25% unless it is necessary, effective and, better yet, a "limited government, free market" budget.

John said...

Yes there are extremists on each end of the normal distribution as always.

jerrye92002 said...

So, is a legislator who wins 50% of the vote an extremist? I just heard one today. The question has to be tendencies. Left unchecked, liberals will tend toward more spending and control, conservatives towards less. The only "good or bad" to be assessed is independent of those tendencies with regard to any specific policy, and How well they serve the public good, and how efficiently.

Having public unions control both sides of the negotiating table to gain benefits and wages in excess of what the average working taxpayer would get does not serve the public good. Allowing private sector workers to price themselves out of a job doesn't help many people, either.

John said...

Of course an extremist can get 50% of the vote. Their district may be far out of the norm.

And the only way one would get the government under 25% would be to totally change SS, Medicare, Medicaid, etc and I see very few people who seriously want to do that.

I mean look at the promises Trump made not to touch SS and medicare.

Of course he said that everyone would have great healthcare and he is working to trash that.

jerrye92002 said...

So, is my district full of extremists? Considering 49% of us voted the other way? How did the moderates vote? The point of the two-party system is to limit the ability of extremists to get votes. It doesn't eliminate their natural tendencies.

John said...

No, actually your district is full of people who had to pick a Democrat or a Republican.

That in no way means that they were voting to end Medicare and Social Security as we know it. In fact it seems Jason was careful not to threaten them.

Please remember that though I voted for Trump does not mean that I liked him... I just disliked Clinton's policies much more. I assume a whole bunch of moderates voted for Lewis for the same reason.

John said...

This is interesting. It appears the GOP candidate barely won, and definitely did not have a mandate.NYT Results

Lewis 47.0% 174,090
Craig 45.2% 167,071
Overby 7.8% 28,845

jerrye92002 said...

Exactly my point. The two-party system worked because moderates had to pick a side, and they picked the more "moderate" one over the more extreme. Now in the race you are citing, a third party entered the picture and prevented that binary choice. In some cases that defeats the great benefit of the two-party system of keeping extremists out of office. And of course we have the supposed "checks and balances" of our system. That doesn't keep extremists like Nancy Pelosi out of office, of course. And such districts do not pay the price for public union favoritism; we all do.

John said...

Personally I think the growth of popularity in third party candidates is because both the GOP and Dems are becoming too extreme. I sure wish Kasich would have run as an independent, I would definitely have voted for him over Trump.

jerrye92002 said...

I think your diagnosis of the symptoms is correct, of the cause misguided, and of the treatment counterproductive. That is, I don't think the majority parties are becoming extreme, but they are painting their opposition in those terms at every opportunity, and the general population believes that rather than examining the issues involved. The extremists in both parties DO tend to control the base of the party and are the most active and vocal, reinforcing the perception. For example, I think Democrats are more extreme than ever after seeing a few too many marching vaginas and black-clad rioters. I'm convinced third parties will be merely disruptive until a major issue comes along not addressed by ONE of the majors. Not sure if, in the modern era, such a transition can even take place, or if it would be of any value. It is more likely that one of the major parties will be "taken over" by one wing or another, such as the Bernie Sanders Democrats or the Ron Paul Republicans.

There is one other solution-- "holding their feet to the fire." Someplace along the line, somebody decided that "rioting in the streets" was better than "write your Congressman," but that gets us more of what we have, and good solutions it is not.

John said...

Unfortunately given the number of votes that occur along party lines, it seems that the number of good politicians who will think for themselves and listen to their constituents seems to be decreasing.

I mean look at the grouping of the red and blue dots in this graph... There are few who are near the middle... (ie like my example candidate: Peterson)

In summary, writing to your rep seems to make no difference... It seems our gov't has become winner takes all. Which probably explains the violent left right swings in our healthcare and tax systems, and likely the protests. (ie Tea Party and Progressives)

jerrye92002 said...

The number of votes that occur along party lines is not a bug, it's a feature. It illustrates to me that our politics are polarized and dominated by the extremist wing of at least one party (that is possible, you know). That tells me that they ARE listening to the most vocal of their constituents. That there are "few near the middle" only tells me that there are two sides to every question, and only two sides. We elect from a two-party system to avoid wild swings in policy because, supposedly, you need that 50% of folks in the middle to get elected or to pass legislation. When bad policy arises gridlock should follow and that, too, is desirable.

I always remember what one legislator told me, that he was glad to see my letter because he got "so few." Apparently everybody else is out marching in the streets, so a well-written letter has more influence than you think.