Unions, Productivity, and the Automakers Crisis

Workers' unions came about because of terrible working conditions and employers who mistreated their employees. Employers were abusing their power and their workers. Unions have been responsible, at least in part, for improving working standards and conditions.

But the pendulum has long since swung to the other side. It is now the unions that are abusing their power and the workers they claim to represent. There are many things that can be said about the actions and effects of today's unions, but let the following non-exhaustive list suffice:

• Today's unions do not balance the needs of workers with the needs of employers and managers. Workers are best served when they are fairly treated and compensated, but also when such treatment and compensation does not threaten the profitability and stability of their jobs and livelihood - the company for which they work. Many recent union "wins" are thus actually losses. Unions are too opposed to management and ownership to seek the common good.
• Today's unions make financial sense for those at the top, but not necessarily for those at the bottom. Union bosses are very well compensated, but does the average worker recover the losses incurred after strike pay runs out during a lengthy strike?
• Today's unions are political. It can be argued that it is for the good of the workers to support a political party that is likely to be sympathetic to union demands. But do political contributions represent the diversity of political support among the union members? And what can be said, for instance, of the CAW boss Buzz Hargrove's official letter to Prime Minister Harper taking a political stand during the Israel-Lebanon crisis of 2006? Did his recommendations represent the majority view of union members? Even if it did, what business is it of CAW's to make political pronouncements?
• Today's unions actually discourage creativity, efficiency, productivity.

This last one likely has a lot more to do with today's Big Three auto crisis than any one is letting on. It's a systemic problem, and any real solution to the automaker crisis must deal with it. More in this great read at Pajamas Media - Rand Simberg: Detroit’s Downturn: It’s the Productivity, Stupid. Here's an excerpt, but read the whole thing - there are some mind-boggling and telling examples of the union mentality.

But almost all of the discussion, when it comes to UAW culpability, has been on wages. The even larger issue, though, is the elephant in the room that seemingly no one discusses, even when given a political opportunity... And it’s not like people are unaware of it, at least people familiar with the industry. The issue isn’t wages — though those are a problem — so much as work rules. UAW work rules, which have evolved over the many decades since the passage of the Wagner Act, are the biggest reason that General Motors is uncompetitive with its non-union American counterparts.

What are work rules? They are agreements negotiated in the contract between management and the union covering how the employees are to be classified, how many breaks they get, how much time off they get, who can do which jobs, how discipline is to be enforced, etc. The goal of the rules is not to enhance productivity or production quality. It is to provide opportunities for featherbedding, increase numbers of (overpaid) jobs for union workers, and minimize how much they have to actually work. This is important because it’s at least in theory possible that the industry could be making money even at current wages, if they could be provided with the flexibility to increase worker productivity.