A New Union Paradigm

The recent union battle in Chattanooga, TN between the UAW, VW and Republican lawmakers and anti-union groups has scored some major attention nationally.  And while the loss of the UAW is noteworthy as a setback in the organizing of the south, more important, in terms of long-term implications, is the evidence of a growing consciousness on the part of unions and the emerging model of unionization that has been taking place over the past two decades.

Steve outlined the personas and ideas of a conservative communitarianism a few weeks ago, discussing a new movement within the GOP breaking from a nearly exclusive and solicitous focus on the protection of the wealthy to frame an agenda focused on the economics of the family and the middle class.  The fight in Chattanooga highlights this divide and provides yet another opportunity for conservative introspection to question the typical Republican approach to unionization.

Robert Samuelson gives a brief history of the different eras unions are playing in.  The pre-1970s era:

Companies faced little or no competition. In autos, the Big Three (General Motors, Ford and Chrysler) had almost all the market. American Telephone & Telegraph enjoyed a near-monopoly of phone service. Government regulatory agencies restricted competition among airlines (the Civil Aeronautics Board) and truckers (the Interstate Commerce Commission) by limiting the number of companies that could provide service on any route.

Together, modest competition and technological superiority produced what economists call “rents” — excess returns that could go to shareholders (in higher profits), workers (in higher wages and fringes) and consumers (in lower prices or higher-quality goods and services). Labor-management bargaining determined how much of the rents workers would receive. Unions’ influence also extended to many nonunion firms — say, IBM — that imitated union benefits, at least in part, to avoid being organized.

But the system broke down in the 1970s and ’80s under pressure from nonunion domestic firms (Wal-Mart), foreign companies (Toyota) and new technologies (Microsoft). Government deregulation of airlines, trucks and telecommunications intensified competition. “Rents” — the system’s linchpin — faded and vanished. Prodded by Wall Street, companies increasingly focused on cost-cutting to protect profits. Business became more hostile toward unions. Older, heavily unionized firms grew slowly or not at all; unions had little success in organizing new high-technology sectors.

As a result of market forces and globalization, the playing field has changed and the old union paradigm is no longer viable in the new era.  Samuelson notes that the UAW changed its tone, adapting to this new era, but this was “overshadowed by the UAW’s past…The VW workers recoiled; they kept the status quo.  For the UAW, success in one area sowed failure in the next.”

I think Samuelson is right, but he leaves out an important detail – the outright hostility and threats made by Republican politicians in Tennessee towards the unionization of the VW plant.  True, the workers may have had a vague notion of a new ” post 1970s era” where unions can no longer function, but more palpable would have been threats of political retribution to the plant and VW.

This week, however, GOP state Sen. Bo Watson threatened VW directly, warning that a potential expansion at the plant would have a “very tough time” winning tax incentives from the Republican-controlled Senate in Nashville if the election succeeds. At a time where almost no manufacturer goes anywhere without juicy incentive packages — Volkswagen itself already got $577 million to build its state-of-the-art facility — that’s a serious threat.  (from the Washington Post wonk blog)

There is a good argument that both the waning of union power and the growing inequality within the US are beyond any sort of scheme on the part of Republicans and the “1%,” and have more to do with the dual emergence of globalization and rapidly changing and developing technology.  The merits of this argument, and the economic reality it describes, demand more than just either the libertarian’s hands-off response or the supply side argument of protecting the wealth of the “job creators.”  The opportunity is ripe for the conservative communitarians to reject both the notion of an impotent society at the mercy of nebulous market forces and the exclusive focus on business owners and shareholders by offering support to the new union model that both cooperates with management and upholds the dignity of labor.

Beyond the willingness of the UAW to concede to maintain the cost competitiveness of VW relative to its competitors and also to automatically give the local union an immediate degree of autonomy through a works council, the attitude of the workers should take center stage in the Republican re-evaluation of unionization.  Lydia DePillis at the Wonkblog documents the attitude of some pro-union VW workers.

Jonathan Walden, 39, worked in Alabama in low-wage food service and retail until landing a job in Volkswagen’s paint shop, where he currently earns $17 an hour. Walden, who describes himself as “so conservative I’m liberal,” said he was initially skeptical about the union idea. But the more he thought about it, collectivism started to sound all right.

“It’s a sense and knowledge that my input is being taken into account, and that I am a part of the process, and not a sense of ‘I’m here and what I’m doing is what they’re telling me to do,’ ” Walden said. Besides, the pro-union workers argue, a works council allows companies to exchange information with employees and collaborate to solve problems. “It’s free market research.”

Even the Japanese automakers like Nissan know this, not to mention other German companies such as BMW and Mercedes; their foreign workforces are also largely represented by unions. “The Americanization of these companies is what poisons the atmosphere,” says Thomas Kochan, co-director of MIT’s Institute for Work and Employment Research.

In a later article after the plant decided not to unionize she documents this:

At the same time, many of the plant’s workers are themselves conservatives — and have started to wonder why the politicians who represent them oppose their right to organize. John Wright, 43, is a test driver at the plant and identifies as a right-leaning independent. He says he makes between $30,000 and $40,000 a year, and supports a wife and three young daughters. When Corker  — who takes more money from the securities and investment industry than any other — came back to Nashville to voice his opposition to the UAW, Wright was puzzled.

“I can’t for the life of me understand why the Republicans and big money are coming against us so bad. To me, they’re attacking the average worker,” Wright said, in the hours before the election results were announced. “To have politicians think that there’s nothing more important than coming down and picking on the little guy because he wants a union, there’s a national debt we’ve got to control, we have foreign policy things that we elect them to go up there to do, but you have to fly home for an emergency meeting because I want a union?”

Rather than an antagonistic approach to management and demands for ever greater wages and benefits, the workers at VW seemed to be seeking a voice and collaboration within the company.  There is more at stake here than which party captures what percentage of the rent, the Republican politicians in Tennessee and nationally are hedging themselves against the dignity of being a worker.

The new union paradigm offers the conservative communitarians a rare pro-business, pro-family opportunity.  The works councils are seen as both good business (evidenced by VW’s support for them, along with other auto makers like BMW) and an opportunity to afford the dignity to workers (and their families) to have a voice and representation within the company.

Like Steve, I won’t hold my breath.  If the unions and the workers in the south don’t give up the fight though, they may make enough of a stir to cause some of the establishment to question if antagonizing both businesses and their constituents makes for a winning platform.

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One response to “A New Union Paradigm

  1. Thanks for this post, Liam. I learned a lot from it. It sounds like there is an opportunity for either party to develop a new pro-union platform based on the German model–worker representation on governing boards. I think it’s way more likely to happen among the Democrats, but if it’s going to help workers in southern industry, it needs at least GOP acquiescence.

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