Friday, October 24, 2008
"Card check" unionization video of the day
Today's Employee "Free Choice" Act video:
Unions pose a classic problem in economics. By leveraging specific legal privileges, they are able to capture benefits for their current members and externalize the costs both to the businesses that they "organize" and other sectors of the economy. It works for a while, because an industry can, for a time, shift profits from its investors to the union members. Eventually, though, things fall apart. Quality declines because workers know that they really cannot be fired, customers leave, and capital flees to businesses that generate higher returns. If you doubt me, consider the relative health of the heavily unionized industries: Railroads, airlines, automobile manufacturing, newspapers, and integrated steel. The unionized businesses in all those industries provide famously worse service than the non-union businesses. See, e.g., Southwest Airlines vs. U.S. Air or United, and General Motors or Chrysler vs. Honda or Toyota.
Involuntary unionization: Just the thing we need to restart growth in the economy.
MORE: I am an idiot for going from memory rather than checking. Fortunately, I have layers of fact-checkers! Southwest Airlines is unionized, as various commenters have pointed out.
6 Comments:
By 
, at
Fri Oct 24, 10:00:00 AM:
Southwest Airlines is 86% unionized.
www.southwest.com/about_swa/press/factsheet.html
By , at
Fri Oct 24, 11:40:00 AM:
" Southwest Airlines vs. U.S. Air or United, and General Motors or Chrysler vs. Honda or Toyota"
All of these companies are unionized. Why do you hate Sara's husband?
By , at
Fri Oct 24, 11:40:00 AM:
"See, e.g., Southwest Airlines vs. U.S. Air or United"
Bad example. Southwest is one of the most heavily unionized airlines in the US. But I'm curious why you thought otherwise.
In the airline industry, there really isn't that much correlation between unionization and corporate health (which is generally pretty bad across the board).
By , at
Fri Oct 24, 11:42:00 AM:
Watch out for that conventional wisdom - it can bite you.
By , at
Fri Oct 24, 02:40:00 PM:
This is pretty funny regarding the airline industry: http://blacktable.com/gillin041013.htm
Have to say, I can't disagree with laying at least some of the blame in the other industries you mention also at the feet of management.
For example, if GM turned out product that was as good as Honda's (and, yes, Honda has some union presence) they would be more competitive.
(Personally, I'm hoping railroads make a big comeback and beat back some of our rampant automobile culture across the board.)
By , at
Fri Oct 24, 07:09:00 PM:
There is an arrangement in Norway whereby the government can force and determine a settlement in cases where the union and employer cannot negotiate a solution. This only occurs after a strike or lockout has gone on for awhile.
Unions don't like it very much because it aborts their strikes and they tend to be dissatisfied with the government's settlement plan. The government, to prevent the collateral damage to society from strikes, seems to jump to the forced settlement earlier for each year that goes by. Unions argue that this is, in effect, removing their right to strike.
The Labor government here is decidedly socialist, but they long ago realized that value must be created before it can be spread.
The system, if implemented, might not be favorable to business as long as Democrats are in power, but it might turn very ugly for the unions the next time the Republicans take over again. Unions might regret having asked for this.
Disclaimer - I am no authority and my views are based on what I read in the media and what I hear from unionized people I know.
