There are better alternatives than unions

In the past unions did serve a useful purpose when they protected workers from unsafe working conditions, poor health and sanitation conditions, disproportionally low pay, and benefits like health care and retirement benefits. While such conditions may exist as exceptions in the US, generally most companies address these conditions out of public pride, and often to avoid a union coming in and doing the same.

The long term trend in the manufacturing sector is against unions. Unions represent something less than 15% of the manufacturing work force today. The greatest growth in unions is in the public service sector, or government unions. Teachers have unions, and even State Department Civil Service employees have their own union.

Several other trends are going on today. A small company can tell hourly employees to use Social Security for retirement, and let the government carry the load. In a similar way, hourly workers can be expected to use public health care with the government again carrying the load. In the latter case, worker’s compensation can smooth out the government’s burden. Unemployment is a government responsibility these days, but at least the burden is spread out over a bigger population than any small company might have to endure, and perhaps go bankrupt. And while this article speaks casually about the government picking up the various burdens, taxes usually follow the small company to help the government’s burden.

It is probably fair to say that the benefits provided by a union are better than the benefits provided by the government. But in both cases, there is no free lunch. Over time there have been detrimental effects from the unions. The health benefits are such that when we buy a GM vehicle, over $1,400 is just for health care of its employees and retirees. In comparison, a Toyota vehicle assembled in Japan has the health benefits costs absorbed by the government. That is quite a competitive advantage. No wonder Toyota just put a new assembly plant in Canada since Canada also absorbs the health care costs of its citizens. From the US point of view, we have lost thousands of jobs to Canada, and some think the unions had something to do with all this.

It appears the government employee unions are also going down this path of “killing the goose that lays the golden egg”. While the results may take decades to become apparent, outsourcing and privatizing of basic services like trash will predominate, in the end. The alternative is higher local taxes, and some communities may go this route. Others will go other routes. At the national level, as an example, when the State Department’s union won’t support the President’s surge in Iraq, and the Defense Department has to make up the difference, then the handwriting is on the wall. When union priorities trump National priorities, time is on the side of National priorities. The executive is still in charge … not the union leaders.

The alternatives to unions generally are to out-union the union. This requires astute leadership for the company. Procedures to ensure good communications vertically and horizontally, upward mobility for winners, good grievance procedures, and education for winners with a future are classic examples. And of course, the basics like unsafe working conditions and poor health and sanitation conditions must be ruthlessly attacked. And pay, and benefits like health care and retirement benefits, must be constantly explained. Given the alternative of no jobs, these most basic of human principles are just doing what should be done anyway. Amplify this with hands on management and leadership, and customer service, and we have a win-win.

Our future and our kids future are in our hands, today. Unions, and union techniques, have had value in our past. And there are probably still cases where unions make sense, today. But what we voters must watch out for in regards unions is when a national political party tilts towards unions just to gain block votes. In the case where block vote appeals and party power predominates over national interests, then it is time for the voters to step in and take charge. Polls and schemes are one thing, the vote is another.