On January 29th radio host and economist Jack Rasmus interviewed the retired UAW activist Gregg Shotwell for the program Alternative Visions. The podcast is here. (I listened to it last night. I do not have a transcript, so any quotes below are recited from memory.) The topic concerns the state of the modern union movement, specifically the UAW, and its future prospects. I found it while searching for Mr. Shotwell's views on the UAW's Chattanooga defeat--this interview happened before that vote, but I think one can infer his opinion.
Neither of these gentlemen are stupid. I thoroughly enjoyed the podcast and learned much. But their Progressive (actually, Marxist) world view renders them blind to unassailable facts. It always astonishes me how ideological commitment can lead people so obviously astray. I'm certain I behave similarly in other contexts--it's human nature--but on this I can undoubtedly see more clearly than they can.
Mr. Rasmus introduces the topic by asking how unions have failed over the past three decades. And fail they have. As recently as 2002 the UAW had just under 640,000 members. By 2012 that had fallen to a bit over 380,000. Both of those are a steep decline from the 1.5 million members in the 1970s. The defeat in Chattanooga probably signals the end of the UAW as a significant player in American economic or political life.
So what have the unions done wrong?
The problem, according to Mr. Shotwell, is that unions have lost sight of their core mission to defend the interests of the workingman. Wages, working conditions, and benefits are what it is all about. The union should not be involved in plant management or profitability. In Mr. Shotwell's view the relationship between union and management is irreducibly adversarial and zero-sum. It's class conflict all the way down.
Unless unions can earn substantial benefits for their members, argues Mr. Shotwell, then unions serve no purpose. Concession contracts--which aim to increase the competitiveness of the company--are counterproductive. Likewise neutrality agreements (where the company agrees not to oppose the union) must come with some quid pro quo attached, which will ultimately screw the workingman. That, in his view, is what was happening in Chattanooga.
I think Mr. Shotwell's assessment is not far off. The UAW's decline is certainly partly because they can no longer win any benefits for their membership. The union earns $683 annually from each member--that's more than $50/month. For somebody earning $15/hour that's a significant sum, and it is not clear they're getting any value from it.
I believe the economic space for the union has disappeared--the union can no longer provide enough benefits to the workers to justify its cost. But Mr. Shotwell blames this entirely on the cupidity of the union leadership. The UAW boss, Bob King, is the son of a human resources manager at GM. In Mr. Shotwell's opinion this taints his entire attitude. He is more interested in managing the company than in protecting the workingman. Hence the concession contracts and the back-room deals with management.
So Mr. Shotwell would have a lot more credibility with me if the only bad guy were Mr. King. But he attributes vile motives to the entire union leadership, at whatever level. They've all been bought off or have lost touch with their constituents. Indeed, he is down on anybody who even competes for leadership positions. While he expresses sympathy for people in reform caucuses (those who try to replace the current, concessionary leaders with more militant sorts), he thinks they're ultimately doomed to fail. The new leaders will ultimately be bought off or rendered powerless. Mr. Shotwell provides examples.
To me this sounds like a conspiracy theory. That there are one or two bad apples is believable, but that people who have devoted their entire lives to unionism and its cause have all been bought off wholesale--this is incredible. Whatever the flaws of Bob King, or Andy Stern, or Richard Trumka, I have a hard time believing that they're principally interested in selling out their members. No way.
Instead, people who ascend to leadership positions are forced to confront reality. Facts are very stubborn things, unless all you want to do is kibbutz from the sidelines--which, despite his passion, is all that Mr. Shotwell does. A union leader realizes that there is not some bottomless pit of money that's just there for the taking. Management really is operating on very tight margins. Profit--condemned by Mr. Shotwell--is indeed an essential part of doing business, as the plant and equipment required to build cars costs money. Were that not true, then each individual autoworker could build and sell cars in his garage without any investment.
Instead, Mr. Shotwell urges unionists to take matters into their own hands. They shouldn't trust or even wait for the leadership. Rather, if the boss causes problems, they should organize right there on the shop floor to fight back. He calls it the "inside strike," and the tactic involves work-to-rule, work slow-downs, or even short sit-down strikes. Hit-em where it hurts, counsels Mr. Shotwell. Once you threaten profits then the boss will pay attention.
Yeah, right. Inside strikes will undoubtedly get attention, and if repeated probably result in closing the plant. There's a reason why that strategy hasn't caught on among workers.
There are two words that never cross Mr. Shotwell's lips: consumer and automation. Ultimately, cars are produced for consumers. Workers will get paid only if their product is both cheaper and better than the competition's. Mr. Shotwell is wrong about who most benefits from speed-up and strenuous working conditions: it's not primarily the bosses. It is, instead, the customer.
And if the customer benefits, then indirectly so do the shareholders and the employees. The workers keep their jobs, and the shareholders make a profit. It is precisely not a zero-sum game. The class-struggle description is not accurate. The UAW leadership understands this--the long term future of the workers depends on the viability of the company. Worrying about corporate profits is exactly what a union needs to do.
Automation is the principle reason why the UAW membership has been shrinking. Cars are assembled with far fewer people today than before. Indeed, the proletarian worker is increasingly an endangered species, displaced by the robot. Instead of relatively unskilled laborer, technical people are required--folks with computer skills. The world that Mr. Shotwell describes is fading away.
What bothers me most about both Misters Shotwell and Rasmus is their opposition to free trade. Mr. Shotwell still opposes NAFTA, despite the fact that it has substantially improved Americans' standard of living. Few people other than died-in-the-wool unionists are against it these days. Even Adam Smith understood that free trade made people richer--the bigger the market, the greater the degree of specialization, and the richer the society. By ignoring the consumer, our friends completely miss this phenomenon.
I admire and respect Mr. Shotwell. Much of what he says rings true. But he does not understand basic economics.
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