Paul Graham - Latest Comments in An Alternative Theory of Unions

Re: An Alternative Theory of Unions

Raul Garcia Jr. — Thu, 01 Jan 2009 15:49:35 -0000

You don't seem to take into concideration the vast waste on do nothing management layers of yesmen and women in the automotive industry. The designers of planned obsolecence, the use of inferior materials and parts. The UAW built products as directed by the greed driven agendas of short sighted CEO's. and the obscene wages and perks paid to them for continuos FAILURE. How about the collusion between big oil and inneficient milage designed into the finished products? Are assembly line workers responsible for that? can you explain how foreign companies got tax breaks up the wazoo to build factories in the USA as we all watched our companies loose market share? European union manufaturers are having us build their products. Why? because we are becoming the new world sweat shop because of union decline. We are turning into Mexico where corporatism, greed and corruption reign supreme. You realy should do more open minded research. For all the words in your article, you only say do away with unions, something you've been told has outlived its need.

Re: An Alternative Theory of Unions

Jack Bruce Hughes — Fri, 19 Dec 2008 18:22:36 -0000

I am not sure that I agree with your historical perspective. No analysis of unionization can be complete without considering the vast upheavals in societies, both in Europe and North America, that accompanied the demand of workers that their rights in the workplace be recognized. People were shot, beaten, bombed, and murdered by private and public armies to preserve the "right" of factory owners to unilaterally define wages and working conditions. I think it is less a case of growth industry managers "deciding" to "overspend" on labor than it was a realignment of the thinking of much of society forced by the solidarity and courage of labor organizers and workers.

Re: An Alternative Theory of Unions

Jonathan Wilkes — Wed, 05 Nov 2008 07:30:47 -0000

How exactly does having worked for a startup during the bubble reveal insights about the historical development of the rise of U.S. labor unions in the mid-20th century? I'm familiar with the act of researching a subject, synthesizing information and drawing conclusions, but I'm quite unfamiliar with...

wait, when you wrote about viewing history with "as cold an eye as" etc., is that eye also closed? Oh, I get it now. It's like starting without the facts and having a conclusion, then working backwards based on a priori assumptions about how the world operates.

I think there's a word for that. It reminds me of this great article I once read about how people some people look back on the mid twentieth century as a golden age, but if you think about it...
(see top of page)

Re: An Alternative Theory of Unions

Jessiegirl53 — Wed, 09 Jul 2008 13:09:18 -0000

Yes--they overspend on themselves! My union Rep in Mammoth Lakes, Ca. is making 97,000/yr (probably more now). Unions are no longer for the people, they are simply for themselves to put more money in their pocket. I was a Union member for over 20 years and when after paying extreme amounts in Union Dues, my representative let me down. Not once, not twice, but three times!!!! I have the documentation on every single thing I went through with this Union and proof they were in the wrong and dropped the ball on me. I am now un-employed, un-insured, 55 yrs of age, and struggling daily to live my life. I fought for over four months in a strike with this Union in 2003/2004, stood by them, heart and soul, lost ALL of my savings. I believed in them and trusted them with all I had. I have been fighting this case since May 2007...all the way to the International's Union (who say "they are not a party to this and can't help me")...sent me back to my Union...who won't help me in the first place. My Rep. had the nerve to let me know while I was shopping in the only store we have here (the one I worked at), in front of other employees/customers that the company won't give in and they are not going to fight for me anymore and that I no longer have my job. Then turned and walked away without another word. I had tried reaching him by phone four times previous to this announcement and he wouldn't return my calls. They believed in me for five months...why did they quit believing? It was very embarrassing and hurt more than words can say...this man makes 97,000/yr!! It's crazy! There isn't anyone that knows me that isn't as upset as me over this. I am no longer a supporter of Unions and probably never will be. I guess my dues only go in their pockets as they grin and walk away. I can't get a lawyer to help me because they say that is what my Union Rep is....my lawyer. I now tell people they are insane to take a union job for ANY reason. They only steal your money and when the chips are down, they desert you. I have not given up on this case...I have not lost yet and with perseverance, I still might get that job back that I had just two years left to receive full medical for life. So, if anyone out there has ANY suggestions for me as to where to go from here, please let me know. I would truly appreciate any help from anyone regarding this. The case is now in the hands of the Trustee for the Union....have no idea where this will take me....called him to ask and he is out of town for a while (no surprise here). Jessie...dbrlebux@aol.com

Re: An Alternative Theory of Unions

shar — Sun, 01 Jun 2008 13:33:17 -0000

why we don't say people are worked hard to be dumm enough to not understand why union. How about making people work part time jobs o work hard and not complain to get more hours and not be paid for vacation, sick days and other benefits. If you think the era of unions is past is not because it is usedless, but because people don,t get to see what is their benefits, they read less, know less about other countries, more tv stupidity....

Re: An Alternative Theory of Unions

JBaxter — Thu, 22 May 2008 20:01:08 -0000

While making your own good living in a country which has provided you with so much opportunity, you compare your fellow workers to pieces of interchangeable circuitry, without noticing the irony.

Re: An Alternative Theory of Unions

$311151 — Tue, 20 May 2008 18:11:23 -0000

I love this post. I have a similar theory about permanent jobs in general. When the pressing project for the country is building a transcontinental railway, then there is a lifetime work for the guy who knows how to figure out which hills the railway should go over and which ones should be tunneled through. The vast majority of work to be done right now is not of that nature.

Re: An Alternative Theory of Unions

Andrew D — Tue, 20 May 2008 12:24:28 -0000

I think you are on to something here. However, you might also want to think about the effects of law - a lot of corporate law of the last half century has made it easier for capital to organize, and laws like Taft-Hartley have made it more difficult for labor to organize. Throw in the law and economics movement and its effect on the jurisprudence of the past forty years, and you may come up with a more complete explanation for why unions are in decline.

Re: An Alternative Theory of Unions

Manish Joshi — Wed, 02 Apr 2008 21:43:40 -0000

Paul,

Your theory is interesting about the justification for unions. However, I think it might only apply to mid-20th century and later. The original impetus for unions was to improve the lot of the workers at the beginning of the twentieth century. When workers started making enough money to have disposable income, their purchasing fueled a big part of the industrial development of the US. Their employers weren't paying them higher wages and working them fewer hours merely because it was expedient; the National Labor Relations Act , passed in the 1930s, took away a lot of the companies' power to resist unionization. Business managers have always wanted to maximize profit. If its by paying higher wages to keep production going, they will. But, they only accepted that because they had to, not because they wanted to. Very few employers realized that it was the workers' higher wages which was boosting demand for a lot of their output, since the US wasn't exporting substantial amounts of its output until the 1960s and later.

Re: An Alternative Theory of Unions

paulgraham — Sun, 30 Mar 2008 15:15:13 -0000

I never say that labor unions were a creation of the early 20th century, just that that was their peak.

Re: An Alternative Theory of Unions

JimFive — Fri, 21 Mar 2008 10:57:46 -0000

The right to Unionize is the right of the Employees to negotiate collectively. If you sign a contract that doesn't allow you to dismiss a worker, that is your fault. The government's force is only in the enforcement of the contract. The law doesn't prevent you from firing someone, the contract that you voluntarily signed does that. That isn't to say that there aren't bad contracts. But the bad contracts are as much the fault of the employer as the union.
--
JimFive

Re: An Alternative Theory of Unions

Mensarefugee — Sun, 16 Mar 2008 02:26:43 -0000

Its a nice theory, but ultimately too simple.
A few cross cultural/national comparisons might enlighten things a bit - India, for instance, is highly unionized. My friend's family, who owns a factory thee cannot even enter the factory premises without the Unions permission. Is that because India is in a massive expansion? No, the Unions there (with the government) are preventing expansion. As I said, you frame the problem too narrowly, but its an interesting 'sub-take' on the matter.

Re: An Alternative Theory of Unions

Mattia Landoni — Tue, 04 Mar 2008 18:45:05 -0000

OK, this is the final version. This graph is correct (I realized the reason why things seemed so strange.
GRAPH 1
http://www.webpresident.org...
The value of unskilled wage depends mainly on average productivity (per-capita GDP), as the actual and predicted values are relatively close to one another.
GRAPH 2
http://www.webpresident.org...
Unskilled wage as percent of per-capita GDP has decreased ever since 1820; however, there is a bump in the period 1930-1970. You explain this with the US being a startup, but one may explain it as being the effect of unions as well. Considering that in Europe unions are stronger and unskilled wages are proportionately higher, there may be a case that they DO sort that effect.

Re: An Alternative Theory of Unions

Mattia Landoni — Mon, 03 Mar 2008 13:56:00 -0000

Oops, apparently I misread my own graph. The current unskilled salary as a percentage of gdp is actually higher - not lower. Ergo, please invert the second paragraph :-)

Re: An Alternative Theory of Unions

Mattia Landoni — Mon, 25 Feb 2008 11:59:24 -0000

As an economist I have to say that certainly your readers have made some points worth addressing on your side if you want to add credibility to your theory. You should also address the fact that in Europe unions are alive and well and - while shrinking in some instances - still enjoy a large participation.

Most importantly, though, I made a graph (http://www.webpresident.org... that you should try to reconcile with your theory. Unskilled labor is arguably paid, today in the US, less than it is worth. For the US, labor productivity (as measured by per-capita GDP) explains 88% of the variation in real unskilled wages. If, hence, we predict unskilled wages starting from per-capita GDP we find that in the Fifties labor was paid much more, and in the Noughties it is paid much less, than the average.

Re: An Alternative Theory of Unions

Connelly Barnes — Wed, 13 Feb 2008 17:41:37 -0000

The real question is in the absence of scarcity, why are people working.

Re: An Alternative Theory of Unions

magnus — Sat, 02 Feb 2008 11:23:20 -0000

if you are not benefitting from society you have no reason following its' laws.

Re: An Alternative Theory of Unions

Ana — Sat, 12 Jan 2008 16:01:12 -0000

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Re: An Alternative Theory of Unions

Chris — Thu, 03 Jan 2008 01:18:54 -0000

Whoever wrote this knows very little about about the actual--as opposed to the popular--history of organized labor. Unions don't date to "the early twentieth century." The Knights of Labor was founded in 1869. And the reason unions are shrinking today is the same reason why you no longer see 9-year-old children working 12-hour shifts in coal mines. We have these things called labor laws, the minimum wage, workmen's compensation, and employer-provided health insurance. And employers do not provide them out of the the goodness of their hearts. All of them were fought for by unions.
It's true that labor is subject to the same law of supply and demand as anything else, and at certain times labor was in tight supply. The truth is, the demand for manufactured goods has not lessened, nor has production. World manufacturing of all kinds has only increased in the last fifty years, but where this production takes place has been moved to places where--guess what?--employers don't have to deal with child labor laws, a minimum wage, workmen's comp, or health insurance. It's called Asia, or, more specifically, China. And it shouldn't surprise you to learn the Chineses government clamps down on all forms on unionization. A sweet deal if you own a factory, but not so sweet if you're a Chinese kid working in a sweatshop.

Re: An Alternative Theory of Unions

Vineel Shah — Tue, 25 Dec 2007 01:09:30 -0000

Yeah, that's not it. Historically, manufacturing companies circumvented "market forces" by creating company towns, paying with company scrip, etc. The "trickle-down effect" that was supposed to make life better for the mass of Americans simply did not trickle. This is the environment that gave birth to the unions. Were these people heroes? No, just desperate people trying to change their circumstances.

These days, companies have to play by society's rules. This has lessened the need for unions. In the computer fields, an individual can actually make a noticeable contribution to a bottom line. We are not interchangeable factory workers, so we don't need, and don't want, the horizontal protections of a union.

Please don't get me wrong... I have found most of these essays to be very intelligent and worthwhile discussions. This is a rare exception.

Re: An Alternative Theory of Unions

kunal — Fri, 07 Dec 2007 07:17:48 -0000

underpayment by artificially expanding the labor pool
>>> completely true.

Re: An Alternative Theory of Unions

kunal — Fri, 07 Dec 2007 07:12:59 -0000

Great Analysis. Your words are always full of wisdom. I like them.

Re: An Alternative Theory of Unions

ahsirk — Sun, 18 Nov 2007 01:49:44 -0000

its nice... but too long for me to copy it all....

Re: An Alternative Theory of Unions

jp — Thu, 11 Oct 2007 15:07:52 -0000

"why are unions shrinking now?"
There is an even simpler explanation. Cheaper long range transportation, the lack of labor laws in the third world countries, and a compliant government (NAFTA, WTO) have made it easier for corporations to undermine union participation by threatening to move or moving production overseas. The early twentieth century was less an example of overpayment than the late twentieth century is of underpayment by artificially expanding the labor pool. (The artifice in this case means, mostly, unequal legal protection for workers. If foreign workers had the same rights to living wages and safe working conditions that domestic workers had there would be no incentive to move overseas. And I think you mean the middle twentieth, rather than early twentieth. The Jungle was written in 1906, and no one in the book was overpaid.)

Re: An Alternative Theory of Unions

Vypuero — Fri, 05 Oct 2007 16:44:25 -0000

Less support from government? The laws regarding unions are totally immoral. As someone paying a wage, it is my money and I have a right to fire and hire as I choose. A Union allows the government to use FORCE on the employer to keep them no matter how shitty their performance is. This is slavery of the employer to the employed. What immoral use of force has Wal-Mart employed? I can tell you that if you are prevented by law from firing someone, your rights are being violated right then and there.

Unions - A way to get a job and be lazy and get paid more than your labor is worth, at the expense of others who don't get to compete with your job by offering to do better work for less. This violates the rights of the employer and all workers who cannot compete for the job by offering lower wages!