Organised Labour and the Future of Jobs


1. Jobs, Jobs, Jobs
2. Labour Strikes and Other Zero Sum Games
3. Peace In Our Time

1. Jobs, Jobs, Jobs

We tend to take for granted some of the things that organized labour has given us. Eight hour days, lunch breaks, week-ends, disability insurance, etc... But perhaps the thing that we took most for granted was a job. Not just work but a job. With a stable salary and a set wage, some benefits and some security. Yesterday, the New York Times reported that the ratio of job seekers to full-time jobs was at an all-time high. As of July there were 14.5 million people in the United States competing for only 2.5 million jobs.

But that doesn't even begin to tell the whole story. The number of job seekers is always under-reported and the number of jobs is always inflated so the problem is worse than it first appears. But most troubling, the character of the jobs being lost in this economy is different than that of the jobs being added. This is not accidental on the part of companies.

For most large trans-national companies, good jobs cost a lot. If you have a union shop or are forced to provide salaries and benefits equivalent or close to union rates the costs of acquisition of new employees, the cost of maintenance and the costs of severance provide a drag on efficiency. A massive economic downturn affords the opportunity to shed these jobs and replace them when times get better. But when the smoke clears, there are always, mysteriously, fewer domestic jobs and fewer union jobs. Since 1983, after waves of expansion and contraction, American manufacturing is dead, the number of well-paid blue collar jobs is vanishing and the rate of union participation has dropped from 20% to just over 12%.

While some efficiencies are important, this approach is short sighted and sacrifices long-term wealth and stability for the sake of short-term bottom line gain. Without a culture of jobs - good jobs - wealth will erode in the United States and other developed countries. The goal should be to sustain moderate growth that distributes wealth across the socio-economic spectrum over time, not a cycle of boom and bust that develops and reinforces structural inequities.

Who's to blame? Well, there is a lot to go around - greedy corporations, impotent shareholders, grasping politicians - but organised labour needs to step up and accept its share of responsibility. Unions have become ossified, conservative and reactionary and have not developed alternative strategies to combat the dogma of short-term economic efficiency. There are a few exceptions, but unions are lousy at creating jobs and, more troubling, they are losing their ability to protect them.

So, while politicians across the developed world, make vague promises about a green collar jobs revolution, it is time for organised labour in the developed world to reassert itself and demonstrate the innovation and creativity that were the hallmarks of its golden age. Otherwise, we will continue to see jobs - real jobs - slip away. - Beta

2. Labour Strikes and Other Zero Sum Games

Far be it from me to opine on the definitive causes of the recent unemployment and the net loss of blue-collar union jobs in our economy. Beta, rushing in where angels and nobel laureates fear to tread, himself acknowledges that there is lots of blame to go around. But he settles on organized labour as a party being particularly worthy of blame.

Yet he does not tell us exactly how unions have contributed to the short-termism and prioritizing of efficiency, which he suggests is the ultimate cause of this job loss, other than to decry the unions' "ossification", "conservatism" and lack of creativity. It does seem correct, however, to suggest that there is something inherently problematic with the overall strucuture of the organized labour relationship with employers. The bunkruptcy and restructuring of General Motors earlier this year illustrated some of the fundamental problems. The health care and pension costs per unionized employee at General Motors was extraordinarily high relative to those of such competitors as Toyota and Honda. The inability to restructure those arrangemnets, short of by way of a bankruptcy proceeding, reflects an inflexibility that will lead over time to the destruction of jobs and indeed whole industries.

How is this the fault of organized labour? Allow me to suggest that one source of the problem may lie in how we have structured the relationship between labour and management. The hostility between labour and management is legendary and deeply historical. There was a time when such hostility on the part of labour was necessary to claw out basic rights to minimum benefits and security.

But it also perhaps reflects the more general propensity in the Anglo-American world to place significant reliance upon competition and adversarial systems to resolve problems and attain optimal solutions. It is a characteristic of the ecnomomic system itself, the judical process of the common law, the competitive dynamic within our meritocratic organizations, and often our "realist" approach to foreign relations. It is based on the premise that it is a dog-eat-dog world, that the fittest will survive, and that competition will lead to excellence.

It is not the only approach. Westerners scoff at the union tactics in Japan. Workers go on strike over their lunch hour during the negotiation season, often demanding little more than better work conditions. Wildcat strikes or any other real hostility to management is virtually unheard of. The relationship is seen by both sides as more cooperative and collaborative than competitive. Both are part of the same team, not combatants locked in the death struggle of a zero sum game. Yet for decades this cooperative approach was an important part of a system of life-time employment and great job security, low unemployment rates, nimble companies with lower labour-related costs in manufacturing, and excellence in quality control.

There is of course no panacea to some of the problems attending the onset of "globalization", and now Japan too is suffering increasing job-insecurity, flights of jobs to cheaper markets, and the erosion of the lifetime employment system. I do not have the answers to how to prevent such dislocations.

But their approach bears some thought. Our tendency to approach societal problems as zero-sum games best resolved through the development of hostile adversarial relationships can be fundamentally counterproductive. As we head into global negotiations on the issue of climate change and green house gas emissions, perhaps mankind's greatest challenge and the broadest of collective action problems, we would do very well to ponder this carefully. - Gamma

3. Peace_In_Our_Time

Lunchtime Strikes? Ooooh...what's next? Refusing to water the plants? How about we steal the urinal cakes from the managers' bathroom? (And before we celebrate the Japanese as being the paragons of Pareto inefficiency, let's recall their original Zero-sum strategy.)

I think you're missing the point. It is a competition. The fit do survive. You can get all Neville Chamberlainly about it and call for peace in our time but that is naive and disconnected. This is not just a minor skirmish, it is an important fight that we need to win. Without better jobs, our economy will never really grow. It will just distend at the top until it collapses in on itself. (Jobs! The Ultimate Stimulus Package...)

Private enterprises are under intense pressure to adapt and innovate to survive - Schumpeter's creative destruction in action. Yet unions cling to outdated modes and structures and rhetoric. We've seen some evolution in fast moving industries where labour is re-conceptualizing their relationship with their members and with business. A good example is the film industry in Toronto. Union members get a decent living wage, film projects come and go, and over time the build-up of experienced and talented labour has become one of the City's competitive advantages. Everyone wins.

The flexibility that the Canadian and American Autoworkers showed in the restructuring of the automobile industry was a promising - if painful - start. But most organized labour still has far to go. And those of us who aren't super-rich need them to re-invent themselves and redefine their role. There are huge opportunities. There are massive workforces still unorganized and new industrial paradigms coming on-line, but without someone speaking - and more importantly thinking - for workers and their future, we'll find ourselves on the wrong side of a global zero sum game. - Beta



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