Date: Wed, 29 Oct 1997 20:18:22 -0500 (EST)
Subject: Re: M-I: Re: labor's bargaining room



Dennis writes:

>I'd argue, too, that unions are actually good for businesses in the
>long-run: they maintain workplace skills, force businesses to spend on
>labor-saving equipment and innovation instead of rentier vacation homes
>and bubble speculations, increase consumer spending and thereby stabilize
>effective demand, etc. 


Is there, I wonder, any hard figures comparing plant modernization between
the open shop and those manufacturers subject to collective bargaining
agreements?  I know that in some industries, like coated paper and textiles,
there is fierce resistance to automation on the part of unionized workers.
At least part of the "contracting out" issue is tied in to this question of
plant modernization.  And what does Dennis mean by the "long run"?

In the "long run", I would guess, unions cost businesses a great deal.  Not
only in increased wages and benefits, but in the day to day culture of
industrial life.  Costly and inefficient work rules, longevity (which often
favor older and less productive workers), slowdowns, increased accounting
costs and the like, all are a drag on productivity and profitability.  True,
this is partially offset by increased consumer buying power (in some
industries more than others), but the net effect of trade unions has to be a
substantial minus for business.

Brief response to Doug:  In five years that saw 12 million new US jobs,
Europe had no net increase.  This seems to be a fairly straightforward
endorsement of flexible labor markets and well developed capital markets,
which include the creation of job-producing start-up businesses.  If this is
not the case (I'm not sure what Doug is suggesting here; that these new jobs
are a mirage?  that Euro-sclerosis is a figment of the World Bank?), then
how to explain this summer, as unemployment in Europe reached a postwar
high, while in the US it fell to a 24-year low.  

The trouble with capitalism is that it is profoundly anti-democratic.
Capitalism is, over time, demonstrably destructive of most of the human
legacy.  On the other hand, it does not fail at all things at all times.
Deregulation of industry, fluid capital markets, a relatively weak and
docile labor force have all created a tight labor market in the US.  The
quality and longevity of this market is of course open to question.  That it
exists as a salient feature of the contemporary US economy is, alas, not.

Louis Godena





 



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