Robert's Stochastic thoughts

Mark Thoma asks an Important Question
via Kevin Drum

Is a return to unions the best solution to the market power imbalance? Should we return to the past, or should we try to use the changing political landscape as an opportunity to build better institutions for both workers and firms, institutions that offer workers the same degree of bargaining power that unions provide, and the the same degree of income, health, and retirement security, but do so more efficiently? We already know how unions work, pretty much, but can we do better?

I think that Thoma could rephrase his question
to "We already know how [US] unions [have] worked, pretty much, but can we [they] do better?

Unions in different countries are very different. US unions have always been characterised by relatively low membership, high dues and rich strike funds, and complete independence of each union from the AFL-CIO. The US has an extraordinarily high wage differential between unionized and un-unionized workers. Unions in some other countries aim for universal membership (in Sweden there are more union members than workers). There they act like an interest group aiming to represent the interests of workers (a very unspecial interest group).

Consider the case of Robert Barro. I think it is safe to say he is not a pinko. Soon after moving from Rochester to Harvard, he wrote a paper on employment protection laws (restrictions on firing) and the duration of fluctuations in unemployment. In this paper, he distinguished between US type unions and "neocorporativist" unions. He said he gave the paper in Rochester and someone said "three months at Harvard and you are talking like a sociologist."

Unions can do three things, they can strike, they can lobby and they can provide services to their members. To have effective strikes, unions need money in the strike fund. To lobby, they need mass membership. In the USA public sector workers are much more likely to be unionised than private sector workers. Often they are not allowed to strike. Still the unions are powerful, because they represent blocks of voters. I personally think US unions should focus on political activism (getting the votes out for Democrats). I believe that this way they would help their members and help non members too (including, I might add, and in my partisan opinion, shareholders).

I wrote two things above, then corrected myself. I thought of direct services. The vast majority of Americans love social security. Who came up with the idea ? His name was Ferdinand Lassalle and he was a German union organiser. Bismark decided not to let the unions keep all the credit for such a great product. Lassalle was a Jew who had a huge mass following in Germany. I think he was on to something.

So how about this. Why don't unions provide health insurance to their members ? They are large groups and don't have adverse selection problems. Workers do not have to be expelled from the union when they are laid off. I think part of the problem is that unions make firms provide health insurance, so uninsured unionised workers are rare (also can you spell nue Heimat ? I thought you couldn't).

Now I really think the solution to the problem is very simple and has nothing to do with Unions. An increase in inequality can be reversed by increasing the progressivity of the tax code. This is very simple, wildly popular, demonstrably works (google Clinton and "tax increase" and Bush and "tax cuts") and would guarantee power for the party which did it for the forseable future, provided that the increase in progressivity included cutting taxes paid by most people (google Clinton and "middle class tax cut").

However, Fred Hiatt wouldn't like it, so it won't happen.

update:

Anonymous has left a new comment on your post "In Which I attempt to zing Mark Kleiman who wrote ...":

By October 2006, more than 100,000 veterans of Iraq and Afghanistan had already been variously granted disability status by the Veterans Administration. Thinking of what has happened in Iraq these 4 years, I cannot imagine how many are the Iraqi disabled. I still have not the slightest idea however why we went to war in and, worse, occupied Iraq. We need to leave Iraq, immediately.

Also too controversial for a Democrat to say?

anne

Anonymous has left a new comment on your post "In Which I attempt to zing Mark Kleiman who wrote ...":

Darn, I posted these thoughts on the wrong thread. I do not quite understand the format yet. Sorry.

No problem. I think that, given public opinion, anything but "leave Iraq ASAP" will soon be too controversial for a Democrat (or a Republican) to say. Of course in 10 years half of the people who agree we have to get out quick will blame Democrats and liberals for the defeat.

ahhh I see the posting issue was related to many comments (blogger didn't tell me which thread so they have appeared above)

Comments:

Phooey; all Democrats need to do to be successful is become Republicans, conservative Republicans, radically-conservative Republicans. This sort of rubbish makes me want not to go to church next weekend.

If only Franklin Roosevelt has been a Hoover Republican, all would have been well.

# posted by Anonymous : 12:07 PM

What amazes me is how little these supposed Democratic voices know of what it has been to be a Democrat. These folks have forgotten how to read.

anne

# posted by Anonymous : 12:12 PM

http://www.nytimes.com/2006/11/21/us/21janitor.html?ex=1321765200&en=f139e42d0ca84d0a&ei=5090&partner=rssuserland&emc=rss

November 21, 2006

Cleaning Companies in Accord With Striking Houston Janitors
By STEVEN GREENHOUSE

Houston's major cleaning companies and the union representing 5,300 janitors there announced a tentative contract yesterday that ends a monthlong strike, raises the workers' hourly wages by nearly 50 percent over two years and provides them health coverage.

Under the three-year deal, the first for the janitors since they unionized last year, their pay, which now averages $5.25 an hour, will increase to $6.25 on Jan. 1, 2007; to $7.25 on Jan. 1, 2008; and to $7.75 on Jan. 1, 2009.

Further, the employers agreed to increase a janitor's typical shift to six hours a day, from four. Many of the janitors had said they were being given too few hours of work to support their families.

As a result of the rise in both hourly pay and the hours in the workweek, the employees expect to see their paychecks double over the next couple of years.

"It's a moment of great victory," said Mercedes Herrera, a janitor for five years who earns $5.15 an hour. "We all came together, and the union gave us strength. Many of us have never received a raise. I've earned the same ever since I started, so the raise is great."

D. Michael Linihan, the lawyer who negotiated for the Houston Area Service Contractors Association, said the five struck companies — ABM, GCA, OneSource, Pritchard and Sanitors — were pleased to have reached the agreement.

"Throughout this long process," Mr. Linihan said, "we have worked diligently to do two things: one, to protect the interests of our customers, and secondly to ensure that our employees are treated fairly."

The Service Employees International Union's organizing of the janitors last year was hailed by the labor movement as a big victory. Not only was it one of the biggest unionization successes ever in the South, it overcame several other significant hurdles as well: most of the janitors were part-time employees, worked for subcontractors and were immigrants who spoke little English, and many were also illegal immigrants....

anne

# posted by Anonymous : 1:16 PM

http://www.nytimes.com/2006/11/03/us/03labor.html?ex=1320210000&en=7e1de42c381db409&ei=5090&partner=rssuserland&emc=rss

November 3, 2006

Janitors' Union, Recently Organized, Strikes in Houston
By STEVEN GREENHOUSE

Last year, more than 5,000 janitors in Houston decided to form a union, giving organized labor one of its biggest victories ever in the South.

But now the janitors are locked in a new struggle. They have gone on strike because five Houston cleaning companies have rejected their proposal for a salary increase to $8.50 an hour, up from the current average of $5.25 an hour.

The companies say the proposal for a 62 percent increase, along with health insurance, is unrealistic.

The janitors, who generally work four hours a day, say they are merely asking for enough to support their families....

# posted by Anonymous : 1:17 PM

Heck, we still do not have even a decent minimum wage through America. We need to try back against decades of Republican anti-union campaigning to get to a reasonable management-worker balance.

anne

# posted by Anonymous : 1:19 PM

By October 2006, more than 100,000 veterans of Iraq and Afghanistan had already been variously granted disability status by the Veterans Administration. Thinking of what has happened in Iraq these 4 years, I cannot imagine how many are the Iraqi disabled. I still have not the slightest idea however why we went to war in and, worse, occupied Iraq. We need to leave Iraq, immediately.

Also too controversial for a Democrat to say?

anne

# posted by Anonymous : 3:20 PM

Robert's Stochastic thoughts

Monday, March 05, 2007

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