Wednesday, May 29, 2013

Canaries In The Coal Mine

This post is partly inspired by an article in The Militant by Kennedy and Farley. They report on another demonstration by the United Mine Workers (UMWA) in St. Louis. The targets are Patriot Coal Co., and also Judge Kathy Surratt-States, who is supposed to rule on the Patriot's bankruptcy petition today (May 29th). I haven't found any news of a decision on the web as of now.

The union claims that Patriot was spun off from Peabody Coal and Arch Coal precisely for the purpose of destroying the union. All the UMWA mines are now owned by Patriot; they employ 2000 miners and are responsible for the pensions of 20,000 retirees. The union is probably correct, but it makes no difference. If the union mines are unprofitable, they are unprofitable regardless of who owns them. I've posted on this issue before here and here.

I have recently finished reading The Box, by Marc Levinson, a history of the shipping container and the revolution in world shipping. It is an excellent book--well worth reading. The analogy to the coal industry is surprisingly exact.

As a person who joined the Socialist Workers Party (SWP) on the West Coast, I soon encountered the name of Harry Bridges. He was the long-time head of the International Longshoreman's and Warehouseman's Union (ILWU), which had a lock on the West Coast ports. We Trotskyists hated him--he was a Stalinist, reformist, labor-skate, sell-out, and probably a few other things besides. By the same token, the employer's association also hated him--he was a Stalinist, Commie Pinko, union thug who hated America. That Mr. Bridges hailed from Australia resulted in that last expletive, and also in numerous government attempts to deport him, despite his naturalized citizenship.

With enemies like that, what could go wrong? Not much, really. His fearlessness inspired awe among the rank and file, and his credibility among ILWU members allowed him bargaining flexibility that few other union leaders had. As a result, in 1960 ILWU signed the Modernization and Mechanization Agreement (MMA), substantially changing the work life for longshoremen.

Up through the 1950s, most freight was shipped as breakbulk cargo. Longshoremen would load freight one piece at a time, stowing it carefully in the hold. At the other end the freight was similarly unloaded. This was backbreaking work, and worse, it took a week or more to unload and then load a single ship. The entrepreneurial genius in Levinson's story is Malcom McLean, the man who "invented" the container, i.e., a box that could be packed by the shipper, loaded whole onto a truck, and than packed easily on a ship. The big advantage is that ships could be turned around in port in about 12 hours.

Of course containerization meant that most longshoremen would be unemployed. And prior to the MMA, the unions came up with very imaginative make-work schemes, such as the "strip and stuff" requirement. Under this rule any container arriving on the pier had to be emptied and then repacked by longshoremen--a process that effectively made the container uneconomical. The result was that shipping traffic was falling dramatically at West Coast Ports, and both the shippers and Mr. Bridges realized that something had to change.

What the MMA gave to the employers was "...the contract, working and dispatching rules shall not be construed so as to require the hiring of unnecessary men." In compensation the union got money--quite a lot of it. There were generous retirement benefits, and the A-listers (the top of the two-tier workforce) got guaranteed hours. The labor force was reduced solely through natural attrition--no layoffs were planned.

Indeed, no layoffs were necessary. Because of the MMA there was a huge spike in port traffic, and every longshoreman was busy. For the first time in many years many B-listers were promoted to the A-list. In the long run, of course, many fewer longshoremen are employed today, and freight transport costs have come down by about 90%. We are all vastly richer as a result.

The MMA was a success, but Harry Bridges was condemned as a sell-out. His East Coast counterpart, International Longshoreman's Association (ILA) head Teddy Gleason didn't sell out, but was much less successful. His circumstances were more difficult and he didn't have Mr. Bridges' credibility, so there was no MMA equivalent until the late 60s. By this time the bargaining power of the union was greatly reduced, and a lot of longshoremen were left with nothing.

President Kennedy put it well in 1962:
I regard it as the major domestic challenge, really, of the 60s, to maintain full employment, at a time when automation, of course, is replacing men."
Substitute "60s" with "2010s" and you have a pretty good summary of today's circumstance. We are beginning a huge new round of automation--millions of people will be thrown out of work. In the long term new jobs will be invented to replace the ones that are lost (how many unemployed longshoremen are still around today?), but that won't help in the meantime.

And this brings us back to the coal miners. Coal mining has been automated--yes--but the big change is fracking. Natural gas replaces coal with only a fraction of the labor investment, and is cleaner and cheaper for the end user. Accordingly, domestic demand for coal is down about 10% since 2008. So union coal miners are gradually being put out of business. The question is--is the UMWA more like ILWU under Harry Bridges, or like the ILA under Teddy Gleason?

I think the answer is more like the ILA. They do not have a leader with the credibility of Mr. Bridges, and their bargaining position is muchU, much weaker. Patriot Coal is good example--you can't strike against a bankrupt company, and you can't go on strike if you're retired. So the UMWA is doing the only thing it can do--sending bus loads of miners to St. Louis to throw a temper tantrum or two. It won't help.

So here's the good thing unions do: they put some friction in the works. In the long run the world needs fewer coal miners. But we can't just turn them out on the street. Harry Bridges' great genius was to find a way to enable mechanization, while still being fair to people already in the profession. By the same token, the UAW got bailed out by the government and they've been made (mostly) whole. I don't think the UMWA has been that wise. There just aren't enough of them and their bargaining power is too small. With luck they'll get some kind of government bailout. I rather hope so.

Automation here we come. You can hear it already. Just listen to the canaries in the coal mines.

Further Reading:

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