Here’s an editorial excerpt from tomorrow’s WSJ:
… the message from a December 27-28 memo to local union presidents and board members from Michigan Education Association President Steven Cook, which recommends tactics that unions can use to dilute the impact of the right-to-work law. One bright idea is to renegotiate contracts now to lock teachers into paying union dues after the right-to-work law goes into effect in March. Another is to sue their own members who try to leave.
“Members who indicate they wish to resign membership in March, or whenever, will be told they can only do so in August,” Mr. Cook writes in the three-page memo obtained by the West Michigan Policy Forum. “We will use any legal means at our disposal to collect the dues owed under signed membership forms from any members who withhold dues prior to terminating their membership in August for the following fiscal year.” Got that, comrade?
…
Yet the most revealing news in the Cook memo is how little the union discusses assisting workers so more will voluntarily join unions. Instead the focus is how to continue coercing workers to keep paying dues. No wonder that the percentage of government workers who belong to unions fell last year. The Cook memo is damning proof that the main goal of union leaders is to enhance the power of union leaders, not of workers.
Membership in unions representing workers in the free economy has declined because free employers decided it was in their interest not to treat their employees like stupid public employees.
Even then, I would defend the right of Local 1 of the iron workers to associate and bargain, but not their right to break the knees of other welders who might disagree.
But their thuggery is nothing compared to Messrs. Stern and Macantee. (Sp?) I am going to lock the door now. They have access to Kathleen Sibelius’s list and maybe the Chicom’s list, and probably know by yesterday I do not own a .45.
I do own a pitchfork and a fence stretcher, and my nearby nephew owns pistols and rifles.
I think to say that this is damning proof that the main goal of union leaders is personal gain is a bit of a stretch. Obviously there are union leaders who misuse their positions for personal gain but there are also obvious legitimate reasons for union leaders wanting more resources (not that I agree with the underhanded tactics described in the memo).
I am a bit suspicious of any examination Right to Work that focuses on the union leaders potential incentive to misuse the workers resources and fails to acknowledge the explicit motivation of many employers to pay their workers as little as possible. To quote Smith from Wealth of Nations
“The workmen desire to get as much, the masters to give as little as possible. The former are disposed to combine in order to raise, the latter in order to lower the wages of labour.
It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms. The masters, being fewer in number, can combine much more easily; and the law, besides, authorizes, or at least does not prohibit their combinations, while it prohibits those of the workmen. We have no acts of parliament against combining to lower the price of work; but many against combining to raise it. In all such disputes the masters can hold out much longer.”
Well, Drew, the masters, as you call them, have an investment in capital that the employees do not. The employees aren’t on the hook for the buildings, machinery and raw materials that are necessary for production. In fact, labor is a raw material as well and the purchase price of it is related to its productivity and availability. If the state wants to insure its own success or that of a favored constituent, pro sports teams come to mind, it has no problem confiscating the wealth of uninterested taxpayers to achieve its goals and many of the taxpayers applaud. Contrarily, when a company becomes unprofitable employees are reluctant to make sacrifices to insure its survival. While the ownership of a company is financially tied to it, employees are free to leave whenever they wish for whatever reason, higher wages, better benefits, proximity to home, etc. In a free society, each individual must be able to make contractual arrangements without the interference of the state or other entities.
I take issue with the assertion that employees are free to leave for whatever reason they wish. Many workers have no better opportunity beyond the lousy arrangement they must make with their employer (or a set of nearly identical employers). Smith took specific notice that the wage rate can and will be pushed down by an employer who does everything possible to ensure that a worker is unable to make better alternative arrangements with the current employer or with someone else. In that light, I think we ought be suspicious of the strong support that big business has for Right to Work laws. This is not simply a matter of the state ensuring that free association is protected but of employers eliminating potential barriers to lowering the wage.
To mediate just a little, so called “right to work” laws are not exactly the embodiment of free-contract folks want them to be. They PROHIBIT closed shops which of course impedes the possibility of truly free association between workers and firms. On this point, Drew does make a point regarding big business’ support of it.
Exactly how does prohibition of closed shops “impede the possibility of truly free association between workers and firms”? And why wouldn’t big business, or any business at all, be opposed to closed shops? Further more, the question isn’t just about wages, it also includes work rules, seniority, management’s right to hire and fire who it wishes and other things. Imagine a baby sitters union, that sends out the next baby sitter on list, with whom you may have had an unpleasant experience in the past, that requires that you keep the fridge stocked not with any old soft drink but only Mr. Pibb, that demands triple-ply tissue in the bathroom and Direct TV instead of Comcast.
People quit their jobs and move on all the time. Press gangs don’t kidnap guys who look like seamen to man the fleet. Folks actually come in apply for jobs. Nobody makes them accept a “lousy arrangement”, although they may do so. Employers that pay poorly and maintain substandard conditions have a difficult time retaining employees, who then move on to competitors, and are liable to fail.
Certainly workers do quit, however many employers seem to stand in contradiction to your assertion that this will lead to better pay and working conditions. Walmart sees 70% of its employees leave within their first year. We would expect this costly turnover to motivate Walmart to offer better pay and working conditions so that they can cultivate a more long lasting and productive work force. Yet we do not see this, Walmart’s wage remains low and its turnover remains high. Walmart is able to rely on the inability of potential employees to make better arrangements and so is always able to find workers willing to accept its low wage. New stores often see floods of applicants, odd for a corporation which pays a poverty line wage and can’t keep most employees beyond a year. Something is amiss with that.
Considering Wal-Mart’s extreme turnover rate, where do all those former employees go if not on to the “better arrangements” which you claim don’t exist? Since you agree they weren’t fired or laid off by Wal-Mart, and that in fact Wal-Mart would prefer to keep them, surely they left of their own accord? If so, the only reasonable conclusion we can make is that they moved on to what are, to them, better arrangements. Seeing them make this choice on their own and then asserting they are not in fact better off requires substituting your judgment for theirs and asserting that large portions of the workforce purposely make themselves worse off.
Given the above, we can view a simple timeline:
1) An individual chooses to work for Wal-Mart, despite its “poverty line wage,” because that is his/her best option.
2) Wal-Mart would like to keep this employee, but is not willing to pay more. The employee now no longer wishes to work for Wal-Mart for this wage.
3) The employee leaves Wal-Mart to either return home or to work elsewhere.
Note that both options in step 3 must now be better than working at Wal-Mart, which was his/her best option in step 1. Thus, either working conditions at Wal-Mart are both terrible AND unknown to the employee prior to step 1, or working at Wal-Mart actually improved this person’s opportunity set (in under one year, given your comment). Given the sheer amount of vitriol directed at Wal-Mart and how often they are in the media, it’s unlikely that working conditions there are somehow secretly awful.
You can’t conclude that people have no better options than working for Wal-Mart when your supporting evidence is that they often choose to stop working at Wal-Mart. Nor can you conclude that Wal-Mart has strong market power to force people into low wage arrangements when your supporting evidence is that it can’t force them to stay there.
Lastly, I thought Wal-Mart typically paid above minimum wage (I may be wrong). If so, it stands to reason that workers quitting is in fact improving pay/labor condtions at Wal-Mart by preventing them from being worse. Regardless, workers quitting MUST be making pay/labor conditions better for the workers who quit.
The fate of ex-walmart employees is a good question cmprostreet. Its something I cant answer conclusively and cant find much info on with a cursory internet search. Some probably make a marginally better arrangement with some other similar employer (target, home depot, etc). Perhaps some leave the work force entirely if they are a parent and their partner is gainfully employed. Perhaps within weeks some sincerely regret leaving Walmart as they actually can’t find a better arrangement. The low wage service industry is rapidly expanding so its entirely possible that they are able to find some arrangement that they (at least initially) find less objectionable to the one they had with Walmart (though doubtfully one that enables them to be upwardly mobile).
Whatever may happen to them, I never said that these ex-employees are unable to find and make better arrangements than the one they had with Walmart. What I said was that this constant turnover does not seem to exert much upward pressure on the wages and working conditions of Walmart as we would expect to see (while true that Walmart pays above the minimum wage, the min wage has been allowed to deteriorate to such a low level that families could often not sustain themselves at all on it. Walmart must pay at least enough for, as Marx put it, labor to reproduce itself. That is the functional minimum). The question that must be asked of all the thousands of new Walmart applicants is: why dont they make the better arrangement now that they are seemingly inevitably going to make within in a year after they quit?
This brings me back to my original point. Smith observed quite clearly that employers are very capable of managing and stymieing the market forces that would normally drive up the wage rate. And their methods for doing so are often every bit as devious and underhanded as those used by the union leaders in Michigan. I think this is an important point to keep in mind. Without it, we are often lead to the tired conclusion that low wage people are inferior unproductive beings who arnt worth a penny more than what they get.
(AFSCME head Gerald) McEntee’s pay and benefits have grown along with his membership stats. Reports by the union indicate that his salary has increased by about 4 percent a year, even as many workers have faced pay freezes and unpaid furloughs. In 2009, his compensation totaled almost $480,000. By comparison, the AFL-CIO’s Trumka was paid $283,340 in salary and benefits.
Drew,
Adam Smith used a version of the labor theory of value. Nobody believes that anymore (except perhaps Marxists). Workers will be paid their marginal revenue product. If a union should boost wages above that, bad things generally happen (see the UAW). I question whether WalMart is a low payer also. I think they’re often the highest payer in their community. Not a WalMart shareholder or apologist. Maybe you could document this claim.
Profit margins are too diverse for the answer to simply be workers are paid their marginal revenue product. Seldom do we see unions push the wage rate so high that the firm’s net income is negative. Typically, the fight is over the profit margin. In that setting, how much of that margin the worker gets is much more a function of the supply (ie desperation) of labor. Firms then, being profit maximizers, have an explicit incentive to ensure that the supply of work is always much greater than the demand (to be accomplished in a whole variety of ways. Labor unions for example, which can regulate the supply of labor available to a firm, are naturally opposed).