(The Return of) Ignatz, by Sam Heldman

Monday, October 14, 2002

While I was doing my deep-breathing exercises so as not to get bent out of shape by Jane Galt's anti-union post (see below), Max Sawicky was also responding to it with facts, logic, and kindness. It seems -- from reading the updates and comments on Max's and Mark Kleiman's sites -- that Ms. Galt has at least clarified that her position is that government should help neither labor nor management in labor disputes, that the current balance of government intervention is tilted too far in labor's favor, and that (if I'm understanding her position correctly) the entire Wagner/Taft Hartley apparatus should be repealed leaving a perfect state of nature in labor relations. Here's what I can add, from the particular perspective of a lawyer who knows this stuff for a living. I won't get into trying to prove that unions are good and employers bad, because that's not something you can "prove" to somebody who already has her mind made up to the contrary.

Here, I think, is Ms. Galt's central belief that drives her argument: "Power between unions and companies is asymmetrical in our labor system; a union worker can decline to work for a company, but a company can't look outside the union for labor." From this, she says, unions can hold employers hostage with unreasonable demands. But that's simply not how it works, based on my years of experience being closely involved with negotiations (and the breakdown of negotiations) in many industries in many states. As to "a company can't look outside the union for labor," unions aren't employment services -- don't provide workers -- in most industries. They do in construction and a few other industries, but only if a particular employer voluntarily agrees to use the union's hiring hall. This is not governmental compulsion on the side of unions.

And in all industries covered by the Wagner/Taft-Hartley apparatus (i.e., most private-sector industries other than railroads and airlines), here's the basic framework for bargaining. Both sides bargain hard. There is literally nothing in federal law that requires either side to agree to anything that it doesn't want to agree with. If the parties can reach a deal that satisfies both of them, they do. The power dynamic depends largely on the thing that (I would suppose) an economist would tell you that the power dynamic should depend on: that is, are there people out there who would be ready, willing, and able to come to work for wages/working conditions that are less good than what the union is trying to get? If the union thinks that the company won't give enough, the union can go on strike. This does not -- does not, does not, does not -- mean that the company has to shut down. The company can hire replacements/scabs and keep on working. The Company can, so long as it had bargained honestly and in good faith to an impasse with the union, pay the replacement/scabs what it was proposing to pay the union-represented employees. If the union's position is not strong -- i.e., if the union really was trying to get more than its legitimate bargaining power allowed -- then the company will do ok with these replacements/scabs, and the strikers will get hungry, and the strike will be unsuccessful. If the company has not violated the law in some separate way, then it does not have to take the strikers back, even if they ask nicely and are willing to take the lower wages/worse working conditions, if the work rolls are filled by the replacements/scabs. And then the scabs will hold a decertification election, they will vote out the union, and the company will smile. It is not uncommon; what keeps it from happening more often is not federal compulsion, but negotiations and compromise. This is the real deal of labor law: unions don't hold a monopoly on available labor, and federal law does not require (either explicitly, or indirectly) an employer to capitulate to any union demand. It's just bargaining -- the kind of stuff that free-marketers are supposed to love.

By the way, since Ms. Galt seems to urge that the federal labor laws be repealed, it's interesting to note that many union activists feel the same way. Before concluding that the labor-law balance favors labor (which isn't even right on its face, as described above), consider the various things that unions are prohibited from doing under the labor laws. Secondary boycotts (the thing that management most fears), intermittent strikes, requiring full dues payments from union-represented employees who want to be freeloaders -- etc. etc. etc. If the employers want a state of nature, there are many in labor who would agree. But "remove the restrictions on employers," on its own, doesn't constitute a return to that blissful libertarian paradise.

posted by sam 6:59 AM 0 comments


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