Unions vs. Jobs?

A new study of US manufacturing jobs offers some challenging statistics.  They support the long-standing argument that union contracts are a (the?) driving force behind loss of manufacturing jobs.

According to the very liberal Washington Post, America lost 6 million net manufacturing jobs between 1977 and 2012.  We fell from 7.5 million unionized factory jobs (1977) to 1.5 million such jobs today.  That is an 80% loss; 4 out of 5 such jobs disappeared.

But even more amazing, our 12.5 million non-union factory jobs (1977) went all the way to…12.5 million.  No net loss!  Non-union manufacturing jobs in the US remained steady for over thirty years!   So on balance it is only unionized manufacturing jobs that are disappearing.

Many explanations, no doubt.  But unions can hardly escape notice.

Everybody knows or suspects that union contracts (through higher wages, costlier benefits, and inefficient work rules) can make manufacturing more expensive and therefore less competitive.  Overseas competition (at least after the 1970’s) kept US firms from raising prices to cover costs.  Creative accounting (pushing retirement costs off the books) only helped cosmetically for a while.  So where else could US firms scrimp?

A Heritage Foundation Study (by a researcher cited by the WaPo) suggests strongly that it was in research and development.   Innovation and quality both failed to keep up with the international competition, and much of the unionized sector either failed or fled.  Obviously, this was in part a failure of management to do its job properly, even if it meant ugly confrontations with labor.

We have certainly seen direct action by unions to kill off employers, but these are rare if dramatic.  Hostess Twinkies was a recent one, but anyone my age may remember the macho union bosses who helped kill Eastern Airlines.  But for the most part, unions were playing an endless game of chicken with the companies, trying to wring every inch in concessions while keeping the patient (company) at least on life support. (Yes, I know that is a badly mixed metaphor.  Sorry.)

So, manufacturing continues in the US, but factory workers have stopped joining unions or voting for them.  Unions must ask themselves why.  And I mean really ask, not just prepare a case for their own defense.

It’s easy to blame Right-To-Work laws, of course.  But RTW states have unions, too.  And non-RTW states have the same problem.  RTW Iowa may have only 7.1% of its private sector employees in unionized jobs; but non-RTW Massachusetts has only 7.0%.  RTW may explain something, but not much.

Anti-union management fights dirty in union elections, labor argues.  That’s why we need automatic card check certification, so workers can’t be intimidated by anti-union campaigns.  The general reaction to these complaints is a collective Boo-Hoo.  Were the auto companies so union-friendly when Henry Ford’s goons were busting heads in Detroit in the 30’s? (See here for more on this.)  Poor little unions. Mean old bosses.

Or could it have something to do with the fact that so many manufacturing jobs were killed or exported, in plain view, as a result of unionization?  And nobody wants that to happen to their own job?

I’ll tell you one thing for sure.  If unions don’t figure out what to do about it, no one else will.  No one else regards it as a problem.

A few years back, businesses were taught by management consultants to ask themselves the insightful question: What business are we really in?

It is time (maybe already too late) for unions to ask themselves the same question.  Are they political recruiting organizations?  Are they private interest groups, committed to getting and protecting privileges for a dwindling number of members?

Or are they committed to improving the lives of American working men and women, as they say?  Because if they are, they need to recognize that killing jobs or chasing them overseas is complete and total failure.

http://www.washingtonpost.com/business/economy/as-manufacturing-bounces-back-from-recession-unions-are-left-behind/2013/01/16/4b4a7368-5e88-11e2-90a0-73c8343c6d61_story.html?hpid=z2

http://www.nationalreview.com/corner/338085/why-unionized-manufacturing-jobs-havent-returned-james-sherk

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