Wednesday, June 6, 2012

On Wisconsin and Labor Unions

According to the Democratic Party platform, a true Democrat will support unions (source). And according to the GOP Party platform, a true Republican will oppose unions (source). Therefore, when union-busting governor Scott Walker of Wisconsin retained his post following a recall election, Republicans were overjoyed and Democrats were crestfallen. Inasmuch as the Wisconsin election was about labor unions, it’s worth thinking about the sources of anti-union sentiment and what it means for America. 

Lech Walesa's union stood up against communism in Poland.
First, it will be stipulated that supporters of unions have a valid perspective. Unions have provided great benefits to this country. Before organized labor, people were expected to work 10 hours a day and 6 days a week. Now we are blessed with the more humane 40 hour work week, complete with weekends. It is not necessary to continue listing what unions have achieved over the years, as far as supporting legislation to protect workers’ safety and improve their living conditions. 

It will also be stipulated that opponents of unions have a valid perspective. By the middle part of the 20th century, unions had become so powerful that they were able to negotiate excessive salaries for their members, and preserve the jobs of employees who deserved to be fired. Union members have used intimidation to advance their separate interests. They have reaped profits from compulsory union dues. Again, it is not necessary to continue listing all the shortcomings of the labor movement as it has evolved in the United States. 

It is very unfortunate that political partisanship has made it impossible for Democrats to admit that, yes, unions have their faults. Likewise, Republicans cannot admit that unions have their virtues, even though Republicans enjoy their weekends as much as anybody. 

And in fact, the truth of the matter is summed up by Thomas Jefferson’s quote: “We have the wolf by the ears, and we can neither hold him, nor safely let him go.” That is, if it were possible to wipe out all labor unions, big business would go back to trampling over workers’ rights. And if it were possible to strengthen unions, union leaders would likely make excessive demands of employers. Thus, if there is a constructive solution to be found that serves workers as well as employers, both sides will have to agree to compromise. Or else, both sides will have to agree to change the rules of the game, and become partners instead of adversaries. This model has worked well in Germany; unlike the rest of Europe – and unlike the U.S. – Germany is experiencing a growing, export-driven economy and low unemployment (source, source).

Just to round out the topic of alternative models of union-management relations, employee-owned companies provide relatively high shareholder value as compared to other companies (source). This may be partly the result of the fact that these companies are less likely to part with ten million dollars a year to pay one CEO’s salary. 

As it stands, dysfunctional relationships between unions and management are quite common, and perhaps the norm, in the United States. This brings us back to Wisconsin. On average, union employees who are employed in the public sector earn more than union workers who are employed in the private sector, and have more generous benefits and greater job security than other workers (source). A non-union worker can be forgiven if he or she resents the idea that his or her tax dollars are spent on these relatively lavish salaries. 
A telling negative depiction of unions. Also, I recommend this.

To understand the plight of non-union employees, take into account the fact that taxes in Wisconsin are regressive. As a result of high a sales tax and other state and local taxes and fees, the bottom 20% of earners pay a higher share of income in taxes than the top 20% of earners (source). Thus, in addition to receiving lower wages, fewer benefits, and having less job security, non-union employees must also contend with a high tax burden on groceries and other necessities.  

Arguably, Wisconsin Democrats’ partisan loyalty to unions resulted in their being insensitive to the situation of low-paid non-union workers. Republicans’ partisan views are equally problematic. By focusing their wrath on public sector union employees, Republicans have overlooked other reasons why ordinary working people face a high tax burden. For example, between the years 2000 and 2007, Wisconsin’s Mercury Marine made over a billion dollars in profit but didn’t pay a cent in taxes. And, despite being profitable, the CEO of Mercury Marine chose to further increase shareholder value by shedding hundreds of workers (source). 

In conclusion, then, Democrats will likely continue defending labor unions, and Republicans will continue to oppose them. While the two parties act out this tired script, and regardless of the outcome, wages will continue to decline. And neither Democrat nor Republican would ever dare to say, “Let’s follow Germany’s example.”  

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