Archive for the 'Unions' Category

The GM Recall Record

It’s staggering:

For those who are just tuning into the GM recall saga, some quick facts. GM has issued 44 recalls in North America this year alone. More than 20 million vehicles have been affected worldwide—a tremendous figure that surpasses total annual vehicle sales in the U.S. The recall pace has snowballed since the start of the year, with only two issued in January, but 14 so far this June for some 4.2 million vehicles. With half of the year left to go, GM is already looking at $2 billion in total recall-related charges.

While some recalls have been over more severe issues than others, the breadth and scope of GM’s fiasco this year reveals a shocking safety crisis. At its current rate, GM is on track to shatter the entire auto industry’s record for most vehicles affected in recalls in a single year, explains Michael Schultz, an industry analyst at the Center for Automotive Research. “It’s unprecedented,” says Schultz, who also expects that the company isn’t done yet. “I anticipate there’s going to be more until they have literally nothing else possible to issue a recall on,” he says.

Quote Of The Day

“The influence of the California Teachers Association was rarely more apparent – or more sickening – than in the defeat of SB1530. The union showed its willingness to defend an expensive and cumbersome process for firing bad teachers at almost any cost – even if that means school districts must continue to spend exorbitant sums of time and money to dismiss teachers in cases involving sex, drugs or violence with students.” -SF Gate, on the teachers union recent campaign effort against SB1530

The Union Goal Is To Make Firing More Difficult

Matthew Yglesias on what should be common sense:

…the idea that labor union objections to firing their members are fundamentally about evaluation metrics is extraordinarily naive. Under any possible evaluation scheme—whether for teachers, journalists, auto workers, basketball players, truck drivers, or what have you—the union is going to want to make it as difficult as possible to fire people. The idea of a labor union is to, among other things, represent the workforce’s interests and give voice to its desires. And in my experience people don’t want to get fired! In any kind of unionized workplace you see management pushing for more flexibility (i.e., ability to fire people) and the union pushing for more job securitiy (i.e., it’s easier to keep your job even if management decides you’re bad at it). 

The Problem With Public Sector Unions

Bloomberg Businessweek reports:

Moments before a single-engine aircraft and a helicopter collided over the Hudson River near Manhattan in 2009, an air-traffic controller who should have been advising the plane’s pilot was on the phone, joking with an airport worker about a dead cat.

Nine people, including three teenage boys, died. The Teterboro, New Jersey, controller, whom safety investigators said was distracted and partly to blame for the accident, still works for the Federal Aviation Administration. Although the agency tried to fire him, his punishment was reduced to a suspension, a transfer and a demotion.

What happened to the controller isn’t surprising, according to data obtained by Bloomberg News under the Freedom of Information Act. More than four of every 10 air-traffic workers the FAA tried to fire over almost two years kept their jobs or were allowed to retire, the data show. That included two-thirds of those targeted for firing over drug or alcohol violations.

The FAA’s firing rate, as a percentage of its total workforce, is similar to that of other federal agencies, where disciplinary terminations are also rare, government data show.
Federal workers have due-process protections to prevent wholesale firings when a new administration comes to power. Union contracts provide another layer of protection.

The full article can be found here.

Good For The Unions, Bad For The Consumer

This inevitable tradeoff appears again in UC online class offerings:

Lecturers make up nearly half the undergraduate teaching corps. They fear — with good reason — that the classes they teach are the most likely to be moved online. Their union, an affiliate of the American Federation of Teachers, has negotiated a deal with UC that requires union approval for new online courses or programs that threaten lecturers’ jobs.  “We feel that we could stop almost any online program through this contract,” union president Bob Samuels told Inside Higher Ed.

Quote Of The Day

“The University of California last week tentatively agreed to a deal with UC-AFT that included a new provision barring the system and its campuses from creating online courses or programs that would result in “a change to a term or condition of employment” of any lecturer without first dealing with the union. Bob Samuels, the president of the union, says this effectively gives the union veto power over any online initiative that might endangers the jobs or work lives of its members. “We feel that we could stop almost any online program through this contract,” Samuels told Inside Higher Ed.” — Link via Tyler Cowen

Republican States Have The Best Public Schools

More evidence that teachers unions are an impediment to education reform:

When it come to excellence in education, red states rule—at least according to a panel of experts assembled by Tina Brown’s Newsweek.

Using a set of indicators ranging from graduation rate to college admissions and SAT scores, the panel reviewed data from high schools all over the country to find the best public schools in the country.

The results make depressing reading for the teacher unions: The very best public high schools in the country are heavily concentrated in red states.

More here.

Boeing And Movement – As American As Apple Pie

Harvard economist Edward Glaeser writes:

Americans, and their companies, have long benefited from their freedom to move throughout our country.

In the 19th century, we moved in search of natural resources, exchanging the stony soil of New England for the rich soil of Iowa. In the 20th century, Americans were more likely to migrate in search of better political environments, like the blacks who fled the Jim Crow states of the South.

The profound role that mobility has played in our country, enabling repeated reinvention, causes me to be deeply worried about the possibility that a National Labor Relations Board complaint will preventBoeing Co. (BA) from moving plane production from Washington state to South Carolina.

That is just the beginning. The full article is worth your time. It can be found here.

Quote Of The Day

“This week, Bloomberg BusinessWeek put the financial woes of the U.S. Postal Service on its cover with a story titled “The End of Mail.” The dire plight of the USPS isn’t exactly news — it’s been losing money since 2006, including nearly $20 billion since 2007. But the cliff the agency has been driving toward is fast approaching. The agency is now almost $15 billion in debt. Unless the government steps in, it will default on $5.5 billion of retiree health-care costs in September. By October it will reach its legal debt limit, and by the end of the year, the USPS will be out of cash — insolvent and unable to operate.” — Freakonomics Blog

Quote Of The Day

None of this is to say that that’s not in fact “the way it should be”. If we are to trust the Economic Policy Institute, a union-funded think tank overseen by big-labour bigwigs, Ohio public-sector workers earn less than allegedly comparable private-sector workers. Surely it’s true that government lawyers make less than their private-sector peers. But I suspect that a good deal of EPI’s “controlling for education level” conclusion involves a boatload of masters degrees in education, and I’m sceptical that the “market value” of a masters in education approaches what teachers with MAs are paid. Furthermore, I suspect the value of high job security, early retirement and low income volatility ought not to be underestimated, but are by studies like EPI’s.  ” – Economist Blog

India Vs China

If you want to know why China is growing faster than India, it’s partly because of India’s labor laws like this:

As soon as a company hires more than 100 employees, it is impossible to fire anyone without government permission. Such laws have long deterred foreign investors, hampered manufacturing, and prevented the nation of more than 1 billion people from experiencing an industrial takeoff similar to China’s. Now legislators are fighting to push a law through Parliament to let a company expand its workforce without surrendering the power to lay off workers to bureaucrats. The bill faces fierce opposition from labor unions.

Of course unions have a vested interest in opposing the law but they do so at the expense of the unemployed and those hoping for wage and job growth. But then again, whoever said unions were on the side of the downtrodden and poor?

The story continues:

Companies must keep 6 attendance logs and 10 separate accounts for overtime wages, and file 5 types of annual returns. There are at least 11 definitions of the word “wage.” Other rules regulate the height of urinals in workers’ washrooms, how often a building must be lime-washed, and how many sand-filled buckets must be on hand to put out fires.

In a speech to trade unions on Nov. 23, Prime Minister Manmohan Singh wondered if these laws had hampered India’s growth. “Is it possible that our best intentions for labor are not actually met by laws that sound progressive on paper but end up hurting the very workers they are meant to protect?” he asked. India could have added 2.8 million jobs to the formal economy in the decade through 2007 had labor laws been less restrictive, the World Bank said in 2007. As few as 30 million Indians work in the formal private sector or government, according to the Central Statistical Organization, the government statistics group. (The rest work in agriculture or the underground economy.) Credit Suisse (CS) economist Robert Prior-Wandesforde calls this number “absurdly low.” China has at least 260 million workers in manufacturing, mining, and nonfarming activities, according to International Labor Organization estimates. “It’s unusual how successful India has been without any sort of industrial revolution,” says Prior-Wandesforde, head of South East Asia and India Economics at Credit Suisse.

The full story can be found here.

Quote Of The Day

“There is evidence that right-to-work laws—or, more broadly, the pro-business policies offered by right-to-work states—matter for economic growth. In research published in 2000, economist Thomas Holmes of the University of Minnesota compared counties close to the border between states with and without right-to-work laws (thereby holding constant an array of factors related to geography and climate). He found that the cumulative growth of employment in manufacturing (the traditional area of union strength prior to the rise of public-employee unions) in the right-to-work states was 26 percentage points greater than that in the non-right-to-work states.” — Robert Barro, professor of economics at Harvard University, writing in the WSJ

Quote Of The Day

“This is actually a pretty big issue in labor relations.  You have a situation where employers are paying much more for compensation, but it isn’t making workers feel better compensated.  Probably the best argument against allowing collective bargaining for non-wage benefits is this: it reduces the transparency of the employer-employee bargain.  When your employer gives you an extra $1,000 in your paycheck, you understand (almost) exactly what this has cost them.  When they change the formula for calculating pension benefits fifteen years hence, give you a work rule change that makes your life more pleasant but will cost them an aggregate $100,000 in lost productivity, or add chiropractic care to your health insurance, you have at best a hazy idea of the cost on the other side.  Of course, the employer may tell you, but these things are often hard to quantify precisely, and collective bargaining tends to take place in a fairly mistrustful atmosphere.  This leads to worker pressure for “small concessions” that aren’t small–and the asymmetry between the employee and the employer perception can further poison the negotiations.” — Megan McArdle

Quote Of The Day

“The question for states and cities is not whether “collective bargaining” is a basic undeniable right, but how much union power in the public sector is too much. Progressives talk as though it can never be enough–or, at any rate, that no union privilege, once extended, should ever be withdrawn. Conservative supporters of Walker talk as though public-sector unions have no legitimate role at all. To me, the evidence says that the balance needs redressing. Public-sector workers in the US are better paid (if you take benefits into account) and enjoy greater security of employment than their private-sector counterparts. Quit rates from public-sector jobs are about one-third of quit rates in the private sector. Equally important, to my mind at least, is that the unions’ quasi-management role in education (especially) has expanded to the point where it is difficult to run schools well, and practically impossible to pursue systemic school reform. So I think the power of public-sector unions needs trimming in states like Wisconsin.” — Clive Crook, blogging at the Financial Times blog

Quote Of The Day

“Almost everyone on both sides of the debate uses the term “collective bargaining rights” to mean the right of a union to bargain with an employer who must, by law, bargain in good faith. It also includes the right of a union to negotiate even for employees who don’t want to be members of the union and don’t want to pay dues to the union. So “collective bargaining rights” really mean the power to force others–to pay the dues and/or to join the union and/or to give up their power to negotiate with an employer. So the alleged right is really the “right” to monopolize the supply of labor to an employer. That’s a phony right, not a real right. It’s really a power.” — David Henderson

Quote Of The Day

“The New York Post is reporting that the New York City sanitation workers deliberately slowed down the snow cleanup as a way to pay back the administration for cutbacks.  On the face of it, it’s not implausible–it wouldn’t be the first time that New York City unions chose the worst possible time to show their displeasure with working conditions.  (Two of the last three transit strikes, for example, have taken place during the holiday season.)” — Megan McArdle

Update: McArdle has more here.