Right To Work: Choice v. Coercion

 

Vinny:   I understand you played a game of pool with Lisa for $200, which she won.  I’m here to collect.

J.T.:       How ‘bout if I just kick your ass?

Vinny:   Oh, a *counter*-offer.  That’s what we lawyers—I’m a lawyer—we lawyers call that a “counter-offer.”  This is a tough decision, here.  Get my ass kicked or collect $200.  Let me think  . . . I could use a good ass-kicking, I’ll be very honest with you . . . Nah, I think I’ll just go with the two hundred.

               —Joe Pesci as Vinny Gambini, and Chris Ellis as J.T. in My Cousin Vinny

 

Tuesday, over much rending of garments and gnashing of teeth, Michigan displayed some semblance of sanity and became the 24th State to pass a “right-to-work” law forbidding mandatory membership in, and payment of dues to, labor unions.  Shockingly, there apparently was also at least a little violence involved, and we wouldn’t want to have some sort of union issue without someone getting beaten up, now would we?  But let’s understand: right-to-work laws do not outlaw labor unions.  Nor do they “gut” them, as the Washington Post’s resident nitwit E.J. Dionne is claiming; if unions really are still the benevolent good for workers that they claim to be, their membership and leverage should not suffer in the least.

So why are Dionne’s and the unions’ panties in a wad?

Let me say up front that I have friends and family that in one way or another are or have been involved with unions, and I recognize that organized labor has played a valuable role in improving the lives of workers.  One wonders, however, if the unions have outlived their usefulness, or at least overstepped their proper bounds.

The modern U.S. labor movement has its roots in the late nineteenth century, when working conditions born of the industrial revolution were often prohibitively bad.  Hours were too long, pay was too low, and the environment was too dangerous.  And for the average mill worker, or miner, or longshoreman, there wasn’t much you could do about it, because individually you had no leverage.  The job was a take-it-or-leave-it proposition, and if you complained to management that you were overworked, couldn’t survive on your current wages, or needed a better hardhat, there was someone else willing to take your place without those complaints.

By organizing into unions, workers as a group were able to accomplish what any one of them as an individual could not.  One miner or one millworker with a complaint would be told to take a hike.  But if all of them—or enough of them—went to management together and said “fix this or we’ll walk,” management would be forced to listen or face the possibility of being shut down due to a lack of workforce.  This is the concept of “collective bargaining,” and at a time when wages and working conditions really were a problem, and when the unions confined themselves to representing their membership in negotiating with their employer for improvements, they did some good things.

But by the 1950s, all that had pretty much been accomplished.  So what’s a union to do, once its workers have 35 or 40-hour week, $50K or better in wages (plus overtime bonus)—i.e., the median American income—full medical coverage, and a retirement pension on top of Social Security?

Well, a funny thing happened once the union leaders discovered it was much cushier and more lucrative living off of union member dues than going back to the assembly plant floor.  Having achieved their primary purpose, the unions increasingly ceased to be about representing their membership than about perpetuating their existence and expanding their financial and power base.  This only got worse as local unions became national ones, and groups of national unions became umbrella mega-unions-of-unions (see, e.g., AFL-CIO).

More and more, the unions moved out of the business of negotiating labor contracts and into the business of politics, which has led to a symbiotic relationship between labor and the Democrats, almost exclusively to whom unions contribute a collective hundreds of millions of dollars a year.  Although federal law technically allows employees to “opt out” of union political spending and pay only for direct representation costs, a report by the Wall Street Journal last summer found that actual union political spending was more than three times higher than their reported amount of “voluntary” member political contributions.  Things like lobbying activities, internal voter-persuasion drives, and support for unionized political protests, all come from the unions’ general dues fund, whether you as an individual union member like it or not.

But as the unions grew in size and power, the bargaining position pendulum overcorrected.  Not only were the unions able to extort untenable compensation and benefits packages, but they were also able to force many employers to accept union security agreements that required employers either to hire only union members, or insist that non-union members join the union within 30 days of employment or be fired.  This is not unlike the tying arrangements and exclusive dealing contracts that are largely outlawed by our antitrust laws—laws that people like Dionne and the rest of the Left would undoubtedly support at the top of their lungs.  The unions in effect establish a monopoly on the supply of labor, and then use that monopoly to perpetuate their cycle of political symbiosis through the extraction and expenditure of compulsory dues taken from their members, many of whom did not voluntarily join.

This is where right-to-work comes in.

Contrary to all the vitriol from the unions and the Dionnian Left, right-to-work laws do not outlaw unions.  Unions can and will continue to exist, as they do in every one of the 24 States that have right-to-work laws.  No one is denying anyone the right to organize in Michigan, Texas, or anywhere else.  You may freely associate with anyone you choose, for any lawful purpose, and that includes getting together with as many of your fellow dockworkers or truck drivers as agree and seeing if you can negotiate a better deal for yourselves (which is what “unions” originally were).  And presumably if what your organization is providing for its members is as beneficial as you say, people acting in their individual self-interest will reach that same conclusion and join.

If you are going to have this freedom of association, however, the necessary corrollary must be that you are equally free NOT to associate if that is your choice.  The right to free association cannot also include the right to compel others to join you (and, by extension, to fund your political activities whether they agree with you or not), or the freedom becomes meaningless.  This is all a right-to-work law does; it prevents unions from establishing circumstances where union membership—and dues payment—is a prerequisite to employment.  They give people a choice.

Of course, once you introduce free individual choice, you create the prospect for competition.  It is this competition that the unions and the Left can’t tolerate, hence the squealing over right-to-work laws.  Like everything else the Left spawns, this system depends on a built-in mechanism of mandatory participation in order to sustain it.  They cannot survive on their own merits in a universe of individual free will.  Whether it’s Social Security, Medicare, Obamacare, or Unions, their idea/program/system/organization is so good for you you can’t be trusted to decide for yourself whether to join.  Like your mother with cod liver oil, they’re going to force it down your throat because they know what’s best for you.

Right-to-work is about choice.  Opposing it is by definition about coercion, as it always is with the Left.

Who’s To Say What’s Fair?

Annie:    These are the ground rules.  I hook up with one guy a season.  Usually takes me a couple of weeks to pick the guy—kind of my own “spring training.”  And, well, you two are the most promising prospects of the season so far.  So I just thought me should kind of get to know each other.
Crash:   Time out.  Why do you get to choose?
Annie:    What?
Crash:   Why do you get to choose?  I mean, why don’t I get to choose?  Why doesn’t he get to choose?
Annie:    Well, actually nobody on this planet ever really chooses each other.  I mean, it’s all a question of quantum physics, molecular attraction, and timing.  Why, there are laws we don’t understand that bring us together and tear us apart.
Last week I got to see the Service Employees International Union (the “SEIU” you often read about in the news) up close.  Apparently there’s been a long-brewing dispute between the SEIU and several local contractors that provide janitorial services to downtown office buildings over the collective bargaining agreement that expired back in May.  The SEIU has been staging periodic flash strikes and demonstrations at various buildings downtown.  Thursday was my turn, as some 15 were arrested for blocking an intersection with a “sit-in” while maybe as many as a hundred protesters cheered them on from the sidewalk, brandishing signs, banging drums, etc.
Interestingly, if you saw those who were arrested for the sit-in, they appeared to be made up of nothing but retired 60s retreads and bedraggled hippie wannabes.  And it turns out that not only were none of them actually janitors, but they weren’t even from around here.  In other words, these weren’t the aggrieved laborers exercising their right to civil disobedience in order to draw attention to their plight; they were professional malcontents imported as mercenaries by the union.
Kind of how the SEIU organizes voter drives.
The major sticking point in the negotiations is apparently the union wants wages boosted from $8.35/hour to $10, and objects to a clause that would allow the contractors to pay below union scale if they were negotiating for a job against a non-union contractor.  Houston Mayor Annise Parker weighed in Friday on the side of the union, and took the contractors to task for not backing down and negotiating in good faith—it was the union that walked away from talks in May.  According to Mayor Parker,  in Houston “We work hard, we work together, and we treat each other fairly.”
Aaaaahh, the old “fairness” card.
Indeed, the “fairness” of the wages and the flexibility to make competitive bids against non-union contractors is the crux of the issue.  And apparently Mayor Parker and the union, in their infinite wisdom, have concluded that $10/hour is fair, and $8.35/hour is not.  Once again, unions and the Left ignore market reality in their push to mandate “fairness” as they see it.  They don’t like $8.35, so it’s automatically “unfair.”
But is that really so?
The transaction at issue in the union negotiations is the sale of labor, and it is no different than any other transaction involving the sale of any other good.  There is a supply of the good—in this case, the union members’ time and effort—and there is a certain demand for that good—in this case, the contractors’ need for services that they then supply to their customers.  But we could just as easily be talking about the sale and purchase of widgets; the analysis is the same.
What is “fair”?  “Fair market value,” in the world of economics, is the price at which a good will change hands between a willing seller and a willing buyer.  Let’s say a widget maker is willing to part with his widget for $10.  Someone in the market to buy a widget may well be willing to pay that $10 to acquire the widget, and if so, the sale will happen.  But just because the seller wants $10 doesn’t make the widget worth $10, nor does it make $10 a fair price.  Let’s say the seller wanted $10,000,000 for that same widget.  The prospective buyer might very well conclude that that price was too high, and if so would decline to pay that much.  Would we say the buyer is being unfair simply by refusing to pay the seller’s asking price?
We can flip the analysis as well.  Let’s assume again that the seller wants $10, but the buyer is only willing to pay $8.  The seller may conclude that $8 is too little, and if so he will refuse to sell the widget, as is his right.  That refusal to sell at $8 is no different than the buyer’s refusal to buy at $10—each has made a rational decision in his own economic best interest.  The fact that the transaction does not take place does not make either party’s actions “unfair.”  There is no fairness or unfairness in the market—only market reality.  It is what it is.
Let’s add another variable.  Again we have widget-maker A willing to sell his widget for $10.  The widget buyer is looking to buy a widget, but he has more than one choice.  Widget-maker B is willing to sell him a widget for $8.  Is the buyer being unfair when he chooses to buy the widget for $8 from maker B instead of buying it for $10 from A?  Most of us would conclude that the buyer was not being unfair, but instead was making a rational decision in his own economic best interest.  If A wants to sell his widget, he must compete with B, which means he will either have to drop his price to $8 or less, or somehow convince the buyer that there is some advantage to his more expensive widget.
This is the situation facing the janitors’ union in Houston.  The contractors’ refusal to pay $10/hour is perfectly within their prerogative, and there is nothing unfair about it.  Ditto the union’s refusal to work for $8.35.  But here’s the market reality the “fairness” cops ignore.  The contractors’ ability to refuse the union’s $10 offer is only as good as their ability either to do without the union’s labor, or—more likely—their ability to obtain that labor from cheaper sources of supply.  If there isn’t anyone willing to do the job for $8.35, sooner or later the contractors will have to accept the union’s demands.  But if there IS  someone willing to work for $8.35, what’s unfair about the contractors’ refusal to hire the union for $10?  It would be economically irrational—some might argue stupid—for them to do that.
This “unfairness” argument stands everything on its head.  By saying the contractors are being unfair, what we’re doing is denying non-union workers the ability to compete for jobs by offering to work for less than the union’s demand.  If Joe is willing to do the job for $8.35, what’s unfair about hiring him at that price?  Are we to deny Joe a job because you say the price he’s willing to accept for his labor is unfair?  Moreover, by hiring Joe at $8.35, the contractor is able to offer its services to building owners for less than if he was paying the union’s $10 rate, which benefits the building owners, and allows the contractor to be more competitive in seeking additional contracts.  If the building owner can hire the contractor at a lower rate, in can charge less in rent, which lowers the overhead for the firms officing in the building, and so on.
What’s unfair about that?
No, what’s unfair is this insistence that in the interest of what the Left decides in its infinite subjective judgment is “fair,” we deny willing buyers and sellers the ability to enter into voluntary transactions at prices they decide between themselves are mutually beneficial.  That’s how the marketplace works. 
 
 

Pipeline Has Obama’s Fanny Caught In A Crack

Torn between two lovers,

Branded a fool,
Loving both of you
Is breaking all the rules.

—Mary MacGregor/Peter Yarrow, Torn Between Two Lovers

This could get tasty.

It’s not as though President Obama doesn’t have enough going wrong, what with the economy in the toilet, Arab states swapping tyrannical dictators for unpredictable mob rule, GOP presidential hopefuls circling like sharks in a feeding frenzy, and his Left base growing increasingly feral with impatience over his shocking failure to deliver on, I don’t know, any of his various promises of change.  Now it appears that some of Obama’s most reliable supporters—major labor unions—are taking up opposite sides leaving Obama caught in the middle of an issue he basically cannot resolve without possibly irretrievably alienating one group or the other.
When you are forever promising all things to all people, one wonders why this doesn’t happen more often.
At issue is TransCanada Corporation’s proposed Keystone XL Pipeline, which would stretch 1,700 miles from oil rich sands in Calgary all the way to Texas Gulf Coast refineries in Houston and Port Arthur.  The project would double the existing pipeline capacity, adding over a half-million barrels of crude per day at a time when political unrest threatening Middle East crude supplies has the price of gasoline still hovering around $3.50 a gallon.  Because the project crosses an international boundary, TransCanada needs White House approval (actually through the State Department) before work can proceed.  Although Canada gave its approval last March, the  project continues to be held up by the Obama administration as it attempts to deal with competing special interests.
In one corner we have the International Brotherhood of Teamsters—you may have heard of them—clearly a heavyweight among the labor unions, and an Obama backer.  The Teamsters support the Keystone XL project, arguing that it will create upwards of 1,500 jobs for its members, in addition to thousands of construction jobs.  An American Petroleum Institute representative has said “This is the largest shovel-ready project in the United States[.]”
Wow, and it didn’t even take a federal “stimulus” subsidy to create it.
Not so fast, say opponents.  In the other corner, predictably, we have the usual cast of environmental zealots.  But joining them on Friday in opposition to the Keystone XL project were two major unions purporting to represent bus drivers, and railroad and subway workers.  There is the Transport Workers Union, a group with historical ties to the U.S. Communist Party.  And we also have the Amalgamated Transit Union, which–not coincidentally–is also a partner with the Sierra Club in the Blue Green Alliance along with a number of other unions, notably the SEIU.  The complaint from all of them is that the project is an environmental threat due to greenhouse gases and possible leaks.  Of course, they make it sound as though the Keystone project brings some new and dire risk to the American experience, conveniently ignoring the fact that for decades there have been hundreds of thousands of miles of pipelines carrying billions of barrels of crude oil a year throughout the U.S.  And the so-called “dirty sands” in Alberta from which TransCanada is extracting the crude that would be shipped through the Keystone XL project are going to be developed whether this pipeline gets built or not.
The bigger question is what this environmental issue has to do with the collective bargaining rights of bus drivers and subway workers.  The TWU and ATU are labor unions; they collect forced dues from their members ostensibly for the purpose negotiating on their collective behalf with their respective management groups.  Environmental lobbying would seem to be well beyond their purview.  Unless, I suppose, the argument is that expanding crude supply to U.S. refineries would result in lower gasoline prices, thus reducing bus and subway ridership.
Yes, artificially propping up gasoline prices by preventing increased supply; I’m sure that’s the way to get the economy back on track and create jobs.  Maybe we can subsidize other producers like farmers not to produce while we’re at it.  Oh, wait . . .
This puts Obama in a nice political hot box.  With unemployment stagnated above 9%, jobs being a constant theme in his public addresses over the last month, and increasing vitriol from the Left for him to do something, the Keystone XL project presents a clear program that, while we can debate the exact numbers, will undoubtedly result in the creation of at least some jobs.  Contrast that with Obama’s vague platitudes about “green jobs” that have proven to be such a demonstrable failure (h/t Walter Russell Mead at The American Interest) that even the New York Times has been forced to concede them for the disaster that they’ve been.  Tea Party budget hawks should like this one, too, as it doesn’t involve a dime of federal money.  And Obama has to know that if he withholds approval, all he’s going to hear for the next 14 months is that for all his talk about compromise and the need to put country ahead of party and focus on jobs, when he was presented with a real opportunity to do just that, he said no.  With the backing of the Teamsters, which endorsed him in 2008, and has contributed over $20 million to Democrats over the last 20+ years, there’s got to be real pragmatic appeal to allowing the Keystone XL project to go forward. 
Yet granting approval would be a slap in the face for the environmentalists that form such a core part of Obama’s base.  Obama campaigned endlessly on his intent to move America to a “green economy.”   He’s so heavily invested in the idea personally and politically, one suspects he will in the end be unable to back away from that position.  And he has to know that if he grants approval, he going to hear nothing but even more hysteria from the Left that he has once again caved in to the Right and sold out the ideals upon which he campaigned.
It’s enough to make Al Gore jump in his SUV and head for the hills.
Forced to choose between pragmatism and idealism, I’ll bet he can’t do it.  A dollar here says he votes “present,” and delays it until after 2012 elections.  Whew, glad that’s settled; let’s go play golf.