I linked to this article the other day entitled Why isn’t Detroit a Paradise? but with the auto manufacturers sitting on the doorstep of Congress begging for money, I wanted to follow up with a few thoughts.
The article is a short anti-union piece. The article and comments are filled with typical yet informative examples of why people think unions are bad or that unions killed Michigan. (c.f., Michigan ain’t that bad.)
I’m not here to disagree with that notion. Union adherance to a static view of the world has significantly contributed to the hollowing out of the industrial MidWest.
But query: is that experience truly instructive of the role that unions might play in the future of our society? Or are the unions of the post-WWII Rustbelt exceptional?
In 1950, America produced 51% of the GNP for the entire world. Of that production, roughly 70% took place in the eight states surrounding the Great Lakes: Minnesota, Wisconsin, Illinois, Indiana, Michigan, Ohio, Pennsylvania, and New York.
The productive capability of this small area of earth staggers the imagination. Virtually everything that rebuilt the industrial bases of Europe and Japan came from those eight states. Cars, planes, electronics, machine tools, consumer goods, generators, concrete – any conceivable item manufactured by industrial humanity poured out this tiny region and enriched the world. The region shone with widespread prosperity. People migrated from the South and West to work in these Herculean engines of industry.
The wealth, power and economic dominance of the region at the time cannot be overstated. Nothing like it has existed in human history.
Yet, a mere 30 years later, by 1980, we called that area the “rustbelt” and it became synonymous with joblessness, collapsing cities, high crime, failing schools and general hopelessness.
What the hell happened?
The author blames (1) unions and (2) invasive government.
But focusing on unions and “spread the wealth” government misses the larger picture: The economies of the Rustbelt were based upon building everything for the world and the wealth distribution structure that developed assumed that this would continue indefinitely.
No society had ever been so successful or collectively wealthy as the rustbelt during those years. Union overreach and “spread the wealth” government was a product of that success.
But as they did not know or would not recognize, that unparalled success was also unsustainable. Success promised but could not deliver cradle to grave corporate employment. Success blinded management and labor alike to the fact that the industries of today are not the industries of tomorrow.
To blame labor for this lack of foresight only acknowledges one part of the problem. Ridiculous labor contracts had to be agreed to by management. Ridiculous big government programs had to be consented to by the voters. They thought it was cheaper and easier to promise a salary for life than a pay raise.
It is these excesses which stain the word “union” today. It is these excesses which color our perceptions of unions. But are these perceptions valid in a world that is so far removed from the one which birthed the UAW and United Steel Workers relics.
Never again will unionized industries find themselves in such a dominate position. Never again will there be such massive wealth to spread around in unionized industry.
What part of our negative perceptions are based on an unrealistic worldview.
See also: My Experience With Unions
It’s interesting. The economic (unsustainable growth) and social (lack of foresight) forces at play in this discussion seem to eerily similar those of our earlier discussion on the housing crisis. It think it would be fair to say that the rust belt represents a “bubble” that burst.
As to whether the current state of unions are instructive, that’s a pretty profound question I’m not sure we can realistically answer here. Is there a blanket statement to be made that will tell us under what circumstances, going forward, unions are a good thing vs. a bad?
But query: is that experience truly instructive of the role that unions might play in the future of our society?
I have to say yes.
Unions are inherently anti-productivity. Their institutional goal is to keep as many people employed as possible at the highest wage possible. To this end, they wage war on improvements that allow fewer people to do the work.
The great Steel strike of 1959 centered directly on attempts by the Steel industry to modernize plants built during WWII. That strike spelled the entire of the American steel industry. 15 years later, still trapped in then 40 year old plants, it collapsed.
I don’t see any future for unions as we no conceive of them. There is to much competition and to much rapid innovation for the unions simplistic model to work. They can’t prevent others from competing for their work, nor can they hold factories hostage as they could in the old days.
A future union might take the form of an employee owned contract labor company. The workers themselves would handle HR type task and then the company would contract itself out as a labor supplier to other companies. That would provide protection to workers and yet protect individuals from dishonest bosses.