Unions: Tool of the Free-Market, or key to it's destruction?

[rambone]

I pose this question to our liberty-minded free-marketeers.

Are unions a necessary part of Free-Market Capitalism?

Or are they merely a tool of eventually overthrowing Capitalism?




I had a discussion today about what is happening at the steel mills in NWI. Sometime last year they had to reduce the workforce any way they could, without violating the stringent union contracts. Subsequently, there have been a substantial number of union workers who volunteered to be laid off, and still receive 90% pay while staying at home. Some have remained on this status for as long as 12 months, and counting.

Is it any wonder why we are in the position we are in?

The entire Northwest Indiana region depends on the success of the local steel mills. And they have been forced by the union to adopt utterly FAILED business models.

No business can pay people to sit at home, and last long.

No business can afford to give everyone 3% raises, every other year, when profits have not gone up by 3%. Not to mention it makes the products more expensive and harder to sell.


I'm sorry, but the culmination of everything I have experienced around unions is basically a Stick-it-to-the-company-at-all-costs, protect-the-slackers, "ME" mentality. Not to mention your union dues almost certainly fund the Democratic Socialist Party.

I'm glad to have a job in these times... I can't imagine trying to "blackball" my boss into raising his expenses and making it harder to sell our services.

 

[irishfan]

I pose this question to our liberty-minded free-marketeers.

Are unions a necessary part of Free-Market Capitalism?

Or are they merely a tool of eventually overthrowing Capitalism?




I had a discussion today about what is happening at the steel mills in NWI. Sometime last year they had to reduce the workforce any way they could, without violating the stringent union contracts. Subsequently, there have been a substantial number of union workers who volunteered to be laid off, and still receive 90% pay while staying at home. Some have remained on this status for as long as 12 months, and counting.

Is it any wonder why we are in the position we are in?

The entire Northwest Indiana region depends on the success of the local steel mills. And they have been forced by the union to adopt utterly FAILED business models.

No business can pay people to sit at home, and last long.

No business can afford to give everyone 3% raises, every other year, when profits have not gone up by 3%. Not to mention it makes the products more expensive and harder to sell.


I'm sorry, but the culmination of everything I have experienced around unions is basically a Stick-it-to-the-company-at-all-costs, protect-the-slackers, "ME" mentality. Not to mention your union dues almost certainly fund the Democratic Socialist Party.

I'm glad to have a job in these times... I can't imagine trying to "blackball" my boss into raising his expenses and making it harder to sell our services.

A few problems with the facts here.....

1. Most union employees do NOT get subpay like the one you are mentioning but yes some do
2. Many contracts are negotiated that the company gets raises or bonuses based on profit not guaranteed but some do get the raise no matter the condition.
3. You do realize that the COMPANY AGREED TO THE CONTRACT instead of rejecting it right?

A company is not obligated to accept the union demands in a contract and can refuse them or negotiate rather than agreeing to the contract. Also, the only real power a union has is the ability to strike if a contract is not agreed upon but what most people don't realize is that is nearly useless today. If a union does strike then the employees can be replaced permanently even if the contract is settled if the company chooses. They may bring back some employees but at the same time can tell you that they will call you if they need you because they have workers in place. The big problem is that nobody wants to blame the steel mills, auto industry, and other companies for agreeing to the contract but will slam the union for taking it.

 

[rambone]

Many of the workers inside the mill have operated their stations for decades, using equipment that has been altered many times with very little documentation.

They have set up conditions that make it pretty troublesome to replace them.

And allowing them to strike and shutting down the mills would cause a pretty thorough economic depression of the entire region.

 

[irishfan]

Many of the workers inside the mill have operated their stations for decades, using equipment that has been altered many times with very little documentation.

They have set up conditions that make it pretty troublesome to replace them.

And allowing them to strike and shutting down the mills would cause a pretty thorough economic depression of the entire region.

What a better time than now when it is already slow and the economy is in a depression? As far as the equipment being altered without documentation goes...well that sounds like another major screw up on the company and not the union. Why don't people complain about the dumb mistakes the company makes instead of the union who are accepting the contract they asked for?

I will not dispute that the old practices like wildcat strikes (illegal now) were dumb and abusive to business but in todays workplace the union is at the disadvantage to the company.

 

[melensdad]

3. You do realize that the COMPANY AGREED TO THE CONTRACT instead of rejecting it right?

A company is not obligated to accept the union demands in a contract and can refuse them or negotiate rather than agreeing to the contract. Also, the only real power a union has is the ability to strike if a contract is not agreed upon but what most people don't realize is that is nearly useless today. If a union does strike then the employees can be replaced permanently even if the contract is settled if the company chooses. They may bring back some employees but at the same time can tell you that they will call you if they need you because they have workers in place. The big problem is that nobody wants to blame the steel mills, auto industry, and other companies for agreeing to the contract but will slam the union for taking it.

A couple problems with all this. Depending on the company and the competitive market, a union can simply force a company into bankruptcy. Seen it happen. Company may have 2 choices, end an unreasonable strike by caving in to wild demand and go bankrupt slowly, or stay on strike and go bankrupt quickly.

You make the false claim that the businesses have a choice. But you force them to choose their death in either route. A free choice involves real negotiation. There should be no death threats by the union to the management. Seen that! There should be no intimidation tactics by the union to the management. Seen that too! There should be no implied violence against the family members of management. Yup, seen that.

 

[DocBoCook]

Irishfan sounds like a Unionguy. I have never worked in a union, so I don't know, but I have never heard anything good about companies once they are unionized. Look at the Cost of Making automobiles in this country. It isn't the materials as much as you would think. Why does one person putting screws into Sideview mirrors get paid $70/hr (though like $25 goes to the union)? The only reason companies like subaru and Toyota moved to this country was they negotiated the contracts before moving here and they wanted in on things that only American Made cars are allowed to do (Nascar, Poss. Gov Contracts, etc..)

 

[irishfan]

A couple problems with all this. Depending on the company and the competitive market, a union can simply force a company into bankruptcy. Seen it happen. Company may have 2 choices, end an unreasonable strike by caving in to wild demand and go bankrupt slowly, or stay on strike and go bankrupt quickly.

You make the false claim that the businesses have a choice. But you force them to choose their death in either route. A free choice involves real negotiation. There should be no death threats by the union to the management. Seen that! There should be no intimidation tactics by the union to the management. Seen that too! There should be no implied violence against the family members of management. Yup, seen that.

If you don't mind can you post the example you are talking about where the company had no choice? You realize that the things you are talking about such as the intimidation, threats and so on can and will get you fired whether union or not? I am not trying to bash but the company you are talking about had no backbone in management or they would have fired whoever was making the threats. Indiana is an at will state and you can be fired regardless of union or not. The union has grievance procedure to try and get you back but threats of harm in modern day grievances are thrown out often and you are still fired. Also, I have seen myself where people have threatened management in a non-union job and the foreman was a coward and did not do anything about it. You can and will have workplace intimidation regardless of union or not.

Modern unions get a bad wrap because of some of the things that the older people did but what most people don't realize is in Indiana you can be fired union or not. Also, I do not buy into the bankruptcy bit in modern contract negotiations but 20-30 years ago I do as the unions were more powerful and had more backing. If you can give me an example where a company in the last 10 years had to take a contract agreement without negotiation please post it. IMO a union makes sense as I have seen a factory here in my town repeatedly come and make employees take wage cuts and lose benefits multiple times as well as lay off people whenever they please because there is no reprecussion. I do not agree with the 90% sub-pay for a year or the job bank stuff but something to prevent layoffs at random and the company to be able to cut benefits when they choose do not exhist for workers in Indiana.

 

[irishfan]

Irishfan sounds like a Unionguy. I have never worked in a union, so I don't know, but I have never heard anything good about companies once they are unionized. Look at the Cost of Making automobiles in this country. It isn't the materials as much as you would think. Why does one person putting screws into Sideview mirrors get paid $70/hr (though like $25 goes to the union)? The only reason companies like subaru and Toyota moved to this country was they negotiated the contracts before moving here and they wanted in on things that only American Made cars are allowed to do (Nascar, Poss. Gov Contracts, etc..)

Your facts are way off....the $70 an hour is the employee cost if you include in the insurance, pay, and all other benefit costs including retired employee pension. The worker does NOT make $70 an hour as a wage and that was a Republican backed line that was all over fox news. Also, that number was later discarded by GM, Ford, and Chrysler as bogus anti-union BS rather than just by the UAW. Also where do you get the fact that $25 go to the union? Your union dues are ONLY two hours pay per month. As far as a union guy.....my grandfather was for many years as well as my dad so I heard a lot of good as well as bad things that they did. However, if you give me the choice of keeping a wage and benefits compared to a company cutting them at random as I have seen then I will choose the union side.

A union is not always a good idea in factories as many do a very good job of taking care of their people without them. However, many places have unsafe work areas and little pay as well as employee abuse by management which I have seen many times and a union can have its place there. They were created to help people make a living wage and a safe workplace but they were greatly abused through the years as the UAW has developed such a wondeful reputation It is also a proven fact that in George W's term he was against a middle class and union employment so quite often you seen on Fox News a lot of lies such as the $70 an hour lies. I do not agree with the job bank and many other dumb things and actually think the pensions are something that have to be stopped for all future retirees if the auto makers are to survive. That last line would make me hated by all the UAW people but it will have to stop for survival as well as pathetic management practices.

 

[melensdad]

I am not trying to bash but the company you are talking about had no backbone in management or they would have fired whoever was making the threats.

The company cannot fire union officials who are doing the intimidating and making the threats.

You say no backbone? You speak from total ignorance. This was one of the proudest, strongest, most honorable and most charitable men I ever knew. His family was threatened, his life was threatened. Not by his workers but by the union thugs.

You sir, you need to wake up and take a look at what these unions actually do.

My wife is currently in a union, she has been 'talked to' by others for not walking off the job. They say it is conversation. Sure. Simple friendly conversation.

 

[irishfan]

The company cannot fire union officials who are doing the intimidating and making the threats.

You say no backbone? You speak from total ignorance. This was one of the proudest, strongest, most honorable and most charitable men I ever knew. His family was threatened, his life was threatened. Not by his workers but by the union thugs.

You sir, you need to wake up and take a look at what these unions actually do.

My wife is currently in a union, she has been 'talked to' by others for not walking off the job. They say it is conversation. Sure. Simple friendly conversation.

How was she talked to for not working off a job? A strike or what? Seriously, I would like to hear as it is as its wrong to harass her by anyone but I would like to know the condition they wanted her to walk.

As far as the union officials who make the threats....does a committee member being suspended for a month for a racial slur that was not the "N" word count? There were no threats involved but the supervisor said it was racist and the committee member recieved a month off even after the supervisor said he was not threatened but upper management did not care.

What I said was the company had no backbone as if the man you are talking about was threatened then the "union official" can be fired regarless of what rank he has in the union. You only are speculating here from what you have heard but I do know a union steward or higher up CAN be fired for making a threat if the company wants to do it.

As in this thread many people "know" that the unions are bad and the officials can be touched etc etc etc but I know it is untrue about them being untouchable as I have seen them busted. Yes, they have abused their power often but they have their place and as I have said before...the company in Indiana can still fire a union employee if they choose.

 

[rush176]

In response to the OP I think unions are both a natural part of the free market and can be a tool of capitalism's overthrow.
They are a part of it because it is also a part of the free market system for a company to maximize profits by minimizing expenses. This makes workers vulnerable to short term financial decisions by management when the workers get cut so the company can make its goals. If management is stupid and only looks at quarterly profits not long term growth the workers will suffer without some type of protections.

They can also be a part of its demise since a union contract does suspend reality in many ways since it locks in a companies labor costs but does nothing for locking in their income. Contracts are negotiated prior to their implementation so of course they are put in place before anyone knows for sure what the business climate will be. Automatic pay increases may have seemed reasonable in 2006 when the economy was doing well but not in 2009 when it wasn't. The reverse is also true that pay cuts agreed to in 2009 may seem to shaft the worker by 2011 if the economy recovers.

Any long term contract that locks in expenditures for a company puts it at risk. For many companies labor is one of their biggest expenses so labor contracts are some of the riskiest things a company can sign. After the economic gyrations of the last decade most companies are moving away from union contracts because they think this will help them deal with future problems easier. I'm not sure they are correct but that seems to be the trend.

 

[irishfan]

rush176...exactly and well put

 

[IndyBeerman]

A couple problems with all this. Depending on the company and the competitive market, a union can simply force a company into bankruptcy. Seen it happen. Company may have 2 choices, end an unreasonable strike by caving in to wild demand and go bankrupt slowly, or stay on strike and go bankrupt quickly.

If you don't mind can you post the example you are talking about where the company had no choice?

Rath Meat Packing Co. Died in 1985 because Union officials and workers would not take a initial wage concession to prevent the company from going bankrupt. How do I know, I worker there and seen it first hand.

There are many good and bad points to a union but the biggest problem is by the unions to garner every single $$ for the employee without realizing that they themselves can force a company into demise because of stirring the workers into a frenzy so much that both workers and company loose money during a strike that will never be recovered on either side.

Been both sides and I'd rather work for a company that cares for it's workers without a union than deal with a company with a union with some of the shenanigans I've seen some unions and reps do.

 

[Jay]

Reasonable union officials, and reasonable management officials can reach a reasonable agreement. It's when one side or the other gets greedy, or power hungry, that things get screwed up.

As a worker, I'd expect a safe work environment, and reasonable wages.....as an employer, I'd do anything I could to prevent my employees fro dictating how I would run MY business......

 

[Jack Ryan]

Irishfan sounds like a Unionguy. I have never worked in a union, so I don't know, but I have never heard anything good about companies once they are unionized. Look at the Cost of Making automobiles in this country. It isn't the materials as much as you would think. Why does one person putting screws into Sideview mirrors get paid $70/hr (though like $25 goes to the union)? The only reason companies like subaru and Toyota moved to this country was they negotiated the contracts before moving here and they wanted in on things that only American Made cars are allowed to do (Nascar, Poss. Gov Contracts, etc..)

You are obviously absolutely correct. You don't know.

Don't worry about it though, you are in the right herd for it. Moo, baaaa, just follow the bell.

 

[Bigum1969]

You are obviously absolutely correct. You don't know.

Don't worry about it though, you are in the right herd for it. Moo, baaaa, just follow the bell.

Well, I guess you are a fan of unions?

 

[rambone]

A union is not always a good idea in factories as many do a very good job of taking care of their people without them. However, many places have unsafe work areas and little pay as well as employee abuse by management which I have seen many times and a union can have its place there.

We have been stuck with "OSHA" for years now. How can anyone still talk about unsafe work environments in the age of OSHA? Honestly.

What did the union do to correct those conditions?

 

[irishfan]

We have been stuck with "OSHA" for years now. How can anyone still talk about unsafe work environments in the age of OSHA? Honestly.

What did the union do to correct those conditions?

You have never had your workplace "hide" or have something overlooked with an OSHA inspection?

You are not understanding anything....the UAW was created a LONG time ago and gained ground in the auto industry when jobs were deadly and employers abused people just as the USW tried to stop the slave labor in the steel mills. As time went on things evolved in the workplace and rules were put into place to protect workers and employers. I know from my own experience I seen a woman be forced to stand on one foot to do her job with a busted ankle she hurt at work. They gave her the choice of work standing on one foot or let her go. What could she really do in this state without some kind of protection? A relative ground part of her finger off at a foundry and had tendon damage and later a skin graft to fix the area. When she returned to work the next day from the injury she was put on the same job and told to grind one handed....that place WAS A UNION SHOP!!! The union and company response was that if they give you a job order you have to do it or you can be fired. Obviously, a lot of people such as the OP do not like unions but the facts about them have been stretched to make them seem evil.

 

[Fletch]

My attitude on unions is this:

If I were a business owner, and some of my workers wanted to unionize, I would tell them that they can be treated as individuals or as a collective. If they choose to be treated as a collective, they will share everything. They'll have the same wages, the same benefits, and so on. If one of them does something that helps the business, they'll all share in the reward. If one of them does something to hurt the business, they're all fired.

 

[Joe Williams]

It's fantasy to say employers should just fire union employees making threats on the picket line. Either those who say the unions don't engage in violence haven't seen a strike, or are just playing fast and loose with the truth.

I've worked strike security a few times. Lots of threats, lots of intimidation, lots of violence, though the violence was usually low key. Things like rocks thrown at trucks, and at us. Had a couple of the goons follow me home once, 40+ miles, knock on my door and try to "discuss" with me why I should get a new job. They quickly thought it might be best to leave, for some reason. Came back that night. I heard someone messing with my car, went out with my shotgun and watched them again decide to leave. They'd keyed my car and punched the lock. Cathy, being the smart girl she is, was videoing them from inside the house when I went out, and the cops used that to ID and arrest them. Knew another security guard who was sniped dead by UMW thugs on strike. Escorting the replacement workers was always a ton of fun.

If they are acting like that to mere security guards, who frankly have no input whatsoever on the issues at hand, imagine how they are treating the people who do.