Don't Mess with the Union!

Finally, I have come back to blog! Last summer (2010), I had a couple blog topics floating around my head. Then, kid #2 was born. Life has been going too fast since then to worry about my blog. I'm currently sitting on a bed in a hotel room on a trip by myself... so I have some time to kill.

This post will address unions. This is NOT in response to the public sector union fights going on in several states over collective bargaining and "right to work" movements. I also won't touch on what I think is illegal use of non-voluntary union dues to support political candidates an individual union member may or may not agree with. To me, these are outrages better addressed by themselves.

Unions have a place. They were necessary to fight the "robber barons" of old. Today's workplace standards (e.g. 8-hour workdays, child labor laws, etc.) owe much to the courage of union movements over the years. Unions have a place today. However, as with anything, movements can go too far (see the French Revolution).

When my sister started working at age 16 in a grocery store, she had to join a union. She did not have a choice in the matter (other than not working there). She couldn't decline and say she didn't want the union to represent her. She didn't have a choice to try to bargain for her own salary and benefits. I distinctly remember my father being disgusted with union dues being pulled out of her paychecks as she tried to save for college. I was 11 or 12 at the time and that situation has stuck in my head ever since.

I hear great stories from time to time about people who worked in union workplaces. My favorite is one guy who "worked too hard" one summer while working his way through college. He was making the union workers look bad as they did the minimum. They told him to cool it. The union had worked it out with the company so the workers only had to work so hard. A person can't show motivation or personal pride and work harder. Oh the horror!

This post will address the power of private sector unions that span industries. As of last summer, when this blog entry entered my mind, the federal government owned majority stakes in Chrysler and General Motors because those companies had been run into the ground. The executive branch of the government completely side-stepped bankruptcy law, which is set up to resolve issues like this. Then, they gave parts of the companies to the United Auto Workers (UAW), rather than follow the law and give bondholders the first rights to the company. I don't know where that authority came from and I don't know why court challenges didn't happen (or win if they did happen).

Unions that span industries destroyed the US Steel, Airline, Railroad, and Auto industries, among others. The Unions had no incentive to keep the companies going (By the way, the company provides the jobs and paychecks... not the Union). The Unions only wanted to bleed the companies dry. I will pick on the UAW as an example of union power, greed, and stupidity... and what I think is illegality.

When I was young, at least before the age of 13, I can recall my father thinking out loud and asking "I wonder who the UAW will pick to strike against this year? Last year it was..." Apparently, it was like asking "rabbit season or duck season?" The UAW used the Big Three (Ford, GM, Chrysler) against each other, knowing the other two would pick up sales while production stopped at the targeted company. As one gave in and provided a perk or benefit, the UAW would hit up the other two for the same thing and hold the company hostage until the Union got what it wanted. This went on year after year until the profitability of making an automobile finally ran out and the government stepped in to "save" GM and Chrysler (2nd time for Chrysler). Union greed, combined with poor management, lack of innovation, and superior foreign competition doomed these two companies and almost the whole US auto industry.

Ford saved itself from a similar fate by mortgaging everything it had in a desperate gamble to save the company. It looks like it worked. Good for the company and good for their workers.

A former class-mate of mine from the Army sparked my mind by asking "Why is there one Auto Worker's Union? Why isn't there a union for Ford workers, one for GM workers, and one for Chrysler workers? AND, why would they be allowed to talk to each other?" I instantly concluded that the UAW (and similar unions) is a violation of the Sherman Antitrust Law meant to break up monopolies. Think about it. The UAW has complete control of a good or service (labor in this case). This is a monopoly (or cartel) which attempts to squash the competition (read individual's rights). I really thought I was onto something new and I was about to do a great thing.

After doing a little bit of research into the Sherman Antitrust Act of 1890 to see if it could be applied, I found my theory fit exactly. I also found out that someone beat me to it... over 100 years ago! The Act was applied in 1894 against the Pullman Strike (railroads). As a result, Eugene V. Debs (very big in organized labor history and also a five-time Socialist Party candidate for President) went to jail. The Clayton Act of 1914 amended the US Code to protect Unions from antitrust law enforcement. This protection from the law isn't right. It allows Union bosses to destroy a company (or an industry). The result is harm to the workers.

Also, by accepting "capital stock" in 2009, I believe the UAW no longer fits the definition of an organization exempt from antitrust laws (US Code Title 15, Chapter 1, Section 17).

Here's my partial solution (partial because I don't know how this would affect suppliers who also have to deal with the UAW): There should be a Ford Worker's Union, a Chrysler Worker's Union, and a GM Worker's Union. Just as Ford, Chrysler, and GM (or any set of companies) can't get together and set prices (colluding against the customer), these three unions would not be able to get together to set prices for labor. These new unions would be concerned about the rights of their workers AND the health of the companies. The better the company does, the better the workers do. Who knows... pride may develop! Management and Labor may get along. Innovation may occur and product quality may increase. This solution creates a symbiotic relationship rather than the parasitic relationship that has brought down industry after industry.

Thoughts?