Unions Good for the Economy
From: newman@garnet.berkeley.edu (Nathan Newman)
Subject: Unions Defend Workers and Help the Economy
Date: 24 Jun 1993 01:00:59 GMT

        	  -by Nathan Newman

It's a funny thing how violently people on this network react to mention
of unions.  Unions are a simple thing: a majority of workers in a factory
demand to negotiate with an employer.  That's it.

Unlike most institutions, whether church, business, or university, the
leaders of unions are elected democratically by all people who are covered
by its work. Unions come in a lot of different forms: small craft unions
covering only a certain kind of work (Carpenters working in multiple sites
for multiple employers) or covering almost every worker in a company no
matter what they do (like the UAW at GM).  

Some union members make a lot of money--the Baseball Players Association
probably has the highest average income of any union in the country. 
Others cover employees who make much less, such as Hotel and Restaurant
Employees or janitors working for the Service Employees International Union.

Almost all union leaders are honest (including most local Teamster
leaders); a few, such as the national leadership of the Teamsters a few
years ago and a few locals, have been corrupt, often when the companies
they negotiated with were also corrupt.  

Most unions do support Democratic candidates.  A very few, notably the
Teamsters, have supported Republican candidates.  (An interesting fact
that the most corrupt union was the one that supported the Republicans. 
The similarity with Drexel Burnham does not end with indictments).  The
Teamsters were thrown out of the AFL-CIO in 1958 because the rest of the
honest unionists did not want to associate with them.  It took until 1989
for the Republicans to come to the same conclusion and actually brought a
serious indictment against the national Teamster leadership.  Last year, a
new honest national Teamster leadership was elected; they immediately
endorsed a Democrat for President having been freed from
Republican-supported corruption.  (Remember, it was Robert Kennedy who
worked to indict Jimmy Hoffa and it was Republican Richard Nixon who gave
him a pardon.)

Some unions are in the private sector, such as autoworkers, janitors, or
truck drivers; some are in the public sector as school teachers, legal
services employees, or bus drivers.

To argue that unions are all corrupt is to argue that tens of millions of
people in all sorts of different professions all choose criminals to
represent them.  To argue that is to show contempt for democracy.  Workers
are capable of electing honest leaders and they do so every day of the
week in unions across the country.

Without unions, workers don't elect corrupt leaders; they have no right to
vote at all.  They have no voice in the companies they work in.  Unions
give workers a right to bargain collectively for rights in the workplace
and for a decent wage.


Let's look at the economic facts comparing heavily unionized countries
verus the US.

The US has one of the lowest unionization rates among industrialized
countries.  Where 16.4% of workers are unionized in the US, 26.8% are
unionized in Japan and 33.8% are unionized in Germany.  Sweden, with one
of the highest standards of living in the world and one of the lowest
unemployment rates over the last 20 years, has a 85.3% unionization rate.

Note that with a lower unionization rate, the US had the highest drop in
manufacturing employment of those countries (over 30% drop in
manufacturing employment.  Germany lost only 7.8% of its manufacturing
employment, while Japan gained 13.6%

The US also had the lowest productivity gain in all sectors of the economy
over the last twenty years.

In the US, 40% of manufacturing employees have to change jobs in each
year. Only 25% of German workers have to seek out a new job each year,
and only 18% of Swedish and Japanese workers switch jobs. 

Unions keep managers from being overpaid relative to average workers:
In the US, a CEO makes 17.5 times as much as the average worker.
In Japan, a CEO makes only 11.6 times as much.
In Germany, a CEO makes only 6.5 times as much.

Politically, strong unions fight for benefits for all workers:

The strongest union country, Sweden, has average paid maternity leave of
32 weeks, while Germany and Japan have an average of 14 weeks paid
maternity leave.  And the US: an average of zero (0) weeks of paid
maternity leave.

US employers spend almost nothing on job training in
the US (only about $10 billion a year by employers out of a $5.5 trillion
economy).  The US government spends only a bit more, about 0.25% of GDP on
labor training programs.

In Germany, the government spends 1.05% of GNP on training and Sweden
spends 1.79% of GDP on job training (and private employers in both
countries are much more committed to job training, as is Japan).

So, the evidence is quite clear, high unionization rates do not correspond
to low productivity rates.  International comparisons show that unions
often increase productivity by encouraging (forcing) employers to include
workers in improving the product.  That is the history in Japan where a
massive unionization and strike wave there in the post-war period led to
employers conceding life-time employment and strong job training in order
to defuse the radical union movements pressure.  In Germany, union leaders
serve on their companies board of directors and help push for productivity
increases and more intelligent production methods.

Unions are about democracy for workers.  Increasing democracy in all our
institutions is not a detriment; it's a plus for any society.

Anyone can pick out this local event and this conflict with this group of
workers in a union; that says nothing about unions as a whole.

The most incompetent industry of the 1980s was the Savings and Loan
industry, one of the least unionized sectors of the economy.  Unions, by
increasing wages, force companies to upgrade productivity in order to make
higher wages pay off.

In a world economy, we will inevitably lose low-wage jobs to other
countries.  If companies are allowed to pay low wages this year, they will
not invest in new technology to increase productivity.  Why invest when
you can make profits off the backs of low-wage workers?

Only by supporting a high-wage, high-skill workforce will we be
competitive.  And high wages come from strong workers rights and unions.

(Most references from WHERE WE STAND by Michael Wolff and the World Rank
Research team.)

         *    Nathan Newman:  newman@garnet.berkeley.edu  *
         *       Council for a Democratic Economy         *
         *                 UC-Berkeley			  *