Wednesday, December 21, 2005

Desperate and Foolhardy


There was a time in America, when unions made sense. Dangerous working conditions, disregard for fair compensation, collusion between major owners of factories and industry to deny workers an equitable voice in their own condition, all led to the creation, by necessity, of labor unions to protect and advance the interests of working-class Americans.

However, the present TWU strike in New York City is a strange anomaly in union history, but is also sadly typical of union arrogance in the last generation. According to USA Today, the transit workers already average $63,000 a year in pay, plus pension and benefits. As a comparison, that’s more than an NYPD cop makes, even a veteran. It’s almost twice the starting salary of a FDNY firefighter.

So, what’s the beef? Are the transit workers worried they are about to be laid off? Actually, no, no one has suggested there were going to be layoffs or a reduction in employment numbers. Were they worried about getting a pay cut? Again, no, there was already a 3% annual pay raise planned to take effect. Were they going to lose their benefits. Not really; the Authority wanted employees to contribute 1% of their salary towards their health coverage, very much like tens of millions of Americans already do, although most Americans have to pay far more than 1% towards their healthcare programs. And while it is true that the Authority wanted to move the effective age of pensions from 55 to 62, that is still earlier than the age at which most people expect to see any sort of pension money, assuming they are fortunate enough to have a pension plan offered. In other words, there was no substantive reason for the union to strike. Also, the strike is illegal, and will cost the union millions of dollars, which is to say that many union members will have to pay out of their own pockets for the stupidity and callous arrogance of their leadership, to say nothing of the two days’ wages every union member is being personally docked for every day on strike.

What’s more, the union has chosen an especially poor time and means to bring their grievance to public attention. At the moment, public support appears to be overwhelmingly with the MTA, not the union. And small wonder. Who, facing the dilemma of suddenly having to replan long trips through ice and snow to go to and from a job which generally pays far less in salary and benefits than these workers already enjoyed, would decide that the tactics of shutting down the city to serve their personal greed should be rewarded? Stupid, stupid, stupid.

So, why on earth would the TWU do something like this? Surely they understand that this act of theirs is suicidal, that the more permanent effect of this venture is further loss of credibility and stature, and that choosing a clearly illegal option will cost them in the courts as well. What on earth could possess these people to believe the strike was a good plan?

Simply put, they had little choice. While the unions are largely in denial about the fact, the plain truth is that union membership nationwide is in decline, and what’s worse for these people, they have no relevance to modern conditions. Put simply, the leadership of modern unions have nothing to offer the country, the plane of modern business, or even their own members. All they have left is their history and their pride, and so that is what motivates and drives their decisions.

How did this come about? Remember at the beginning, I noted that unions came about largely to address the grievances of regular employees against their management and company owners. Well, the owners got smart. They created Personnel departments to address employee concerns, and they hired people who had studied Economics and Labor Law, and while no one would say that the upper management of most corporations puts their employees first, it is a fact that companies generally put a high value on employee satisfaction and in rewarding high performers. The unions, for their part, did nothing to move from their base position of addressing all issues in the Collective sense. That is, any union has power and authority only in the sense of Collective Bargaining, not at the level of the individual, and this is a fatal flaw.

Consider that unions exist to primarily protect the collective interests of their members. That is, they will sacrifice the individual to protect the group as a whole. This means that workers who stand out, by definition will find the union unsuited to their personal needs and priorities.

Consider a company, which has determined that to do as well in 2005 as they did in 2004, they needed their factory employees to average producing 400 quality-controlled products a week per employee. Now, let’s say that there are three employees, Adam, Bruce, and Charley, whose average production is 500, 400, and 300 quality-controlled products a week, respectively. Between them, they are averaging the needed 400 q-c products the company needs to stay where they are, and if these three men all worked for a union, the union might claim that should be good enough for the company, but there’s a problem. First, of course, no union is ever happy to just stay where they are, which means this union would be demanding pay and benefit raises for meeting the standard, even though that standard demonstrates no actual improvement in company production as a whole. Also, the company would dislike the union’s position regarding Charley. The company would like to motivate Charley to either improve his performance, or else the company would like to replace Charley with an employee who can keep up with the 400-product standard. The union, holding an obligation to protrect all their members, would necessarily be defending an admittedly poor employee for no reason other than he is a union member. That means that the company’s owners and management would naturally find themselve in opposition to union demands over compensation and standards, from the start.

But the union has a problem, too, and it’s a big one. Remember Adam, the 500 product a week guy? He’s doing an impressive job, and so naturally he wants to be recognized for it. It’s in the company’s interest to reward Adam; he not only represents high productivity they want, but if employees see Adam rewarded for superior work, that may motivate some to also produce superior results. This is great for the company, and great for the employees being rewarded on the real basis of their work. It’s not great for the union, however.

If the union allows Adam to be rewarded for superoir performance, then they end up allowing merit pay, better pay for better work. Inevitably that logic means that poor performers like Charley don’t get the rewards for excellence, and the union cannot allow that kind of system to be put into place. So, the union has no choice but to demand that Adam be denied extra rewards for his superior performance; it’s that sacrifice of the individual to protect the group I mentioned. But the natural effect of this kind of system, is to drive superior performers like Adam away from the union, to other companies which do reward excellence. And the union becomes a group of sup-par performers by definition, as more and more excellence-driven workers seek their hard-earned reward.

So what does the union do? In a work, extortion. If you think about it, that’s all a strike is, for instance – ‘do as I demand, or I will hurt you'. In the end, that kind of strategy is a sure loser. But it also led to union-only shops and contracts for a long time, until the NLRA ruled that practice illegal. But unions continue a number of practices, which could reasonably only be compared in their intent and effect to Organized Crime.

So, what does all this have to do with the TWU strike in New York? The end is near, folks, and the union bosses know it. Just as the Democrats continue to use the courts to try to create laws they could never hope to pass in open legislature, unions hope to create and establish and protect the privileges they have held for so long. They know their membership is declining, their tactics are outraging many millions of honest people, and the tide is moving against them. They are grabbing now whatever they can take, like an Iraqi Baathist in 2002 on his way out the door, they know they don’t have very long, and so this strike is a desperate attempt to grab what they cannot hope to have by any right or agreement. Coercion is all they have available to them. But in the end, all this will do is confirm the need, not to make unions or help them gain power again, but to wipe them out as the corrupt gangs they are in actual fact.

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