An Alternative Theory of Unions [2007] | Hacker News Reader

An Alternative Theory of Unions [2007]

paulgraham.com

33 pointssillysaurus242 comments

Alternatively, perhaps Unions have declined after having suffered from decades of negative publicity from capitalists.

Unions - bringing you weekends, the NHS, paid holidays, sick pay, protection from unfair dismissal, safety standards to ensure you don't get injured and die, and stopping discrimination and exploitation. What's not to like?

I'm a highly educated and well paid technology worker - and I'm in a Trade Union - http://www.prospect.org.uk/ They've helped me when I was made redundant, have held my hand when dealing with difficult work situations, and given me training when my employer wouldn't.

Here's the way I look at it - your employer has some very high priced lawyers on the payroll. If they (or your boss) decide to screw you over, who would you have on your side?

Union dues (in the UK, at least) are the cheapest and most effective form of "insurance" you can have.

It's similar here in Denmark. Most people are members of a union, because it's cheap, and the union has experts in labor law and contracts, while most workers are not experts in those things. We give similar advice to startup founders: don't sign anything without getting a good lawyer to review it first. You could hire a private lawyer as a worker as well, but joining a union is typically more cost-effective.

One thing that helps in Denmark is that the individual advocacy angle and the general bargaining angle are separated. I can join any of several unions, or none, as I wish. In my case the researcher's union or the engineer's union are both decent choices. But my broader workplace conditions are negotiated between my employer and the union for this sector of the economy, not my personal union (they might be the same, might not be). As a result there is also no such thing as a "unionized" or a "non-unionized" business; every business over a certain size is unionized in a sense, because labor conditions are always negotiated between employers and employees on a collective basis.

Generally this produces a much nicer situation, in which I don't have to become a DIY expert in employment contracts in order to avoid being taken advantage of. It also helps keep onerous terms out of employment contracts, because someone with actual negotiating power and knowledge (rather than me as an individual employee) will object if the employer tries to include a non-compete clause, or similar types of terms. Even highly-paid, intelligent techies in the U.S. often fail to do that: in states where it's legal, suckering people into non-competes is extremely common, and they don't always even realize it until it's too late.

I cannot comment on the unions for workers in private companies, But I think In my country unions built for public workers and officials are blood sucking leeches on tax payers. They are highly ideological and so far I have not seen any good coming from them in my line of work. I am forced to enter an union and I have to pay them a good sum for nothing and I cannot leave because they create a mechanism that you will loose benefits if you are not a member (Before they used to give those benefits without a union anyway). There are laws protecting the workers already and I would rather take the chances and deal with my employee on my own when I am in trouble.

The trouble is, people tend to look on things like working time controls, paid holidays, etc., as just what they're entitled to, without looking at how they came about.

Right - PG makes the mistake of talking about what labor is actually worth, but this value is dependent on what the political system will allow - the balance of power between labor and capital. Where labor organizing risks torture and death, labor is cheap. Where labor organizing is a protected right, labor is relatively expensive.

This drives offshoring, as capital seeks production regimes where they can reduce the cost not just of wages, but of meeting environmental and safety standards. The naive capitalist then claims that the low ball cost of production in unsafe, toxic, politically repressive locations is the "true" cost of labor. Unions declined in power in the US as the economy moved away from manufacturing, and Reagan set the tone for service unions by firing striking air traffic controllers. By declaring open season on service workers unions, the capital backed Republican right made it clear they weren't going to allow them the same sort of power industrial unions had in the mid 20th c. This political struggle continues today in efforts to raise the minimum wage both nationally and for individual large employers like Walmart and macdonalds.

Taft Hartley outlawed secondary strikes. That was what gradually did unions in.

Interesting, because the recent grocery store labor dispute in Seattle included a planned secondary stroke against firms that accepted union's terms.

You can make anything look good by only considering the good aspects.

You can make anything look bad by only considering the bad aspects.

Neither of those is particularly better than the other.

I live near Detroit. I can see by metaphorically looking out the window that it's not all good.

(Note for the purposes of this post I'm not saying "Unions 100% caused Detroit's collapse"... it is enough merely that they had a non-trivial hand in the collapse by pricing themselves entirely out of the market, and that's merely the easiest manifestation of their problems to put in a post like this. Nor am I making the claim I just said in my second paragraph is a bad thing; I'm not saying unions are all bad. I'm saying it's a great deal more complicated than edent makes it sound, and without understanding both sides, you can't understand what's happening.)

I don't think poorly run unions are a satisfactory justification for the belief that "unions are bad" (PG's contention, not yours.)

I'd like to start a union that did things properly whenever I hear about RMT being Trotskyites on the radio again - but then, more civilised alternatives do exist in the UK, like Propsect.

I can't speak for PG, but I don't think he believes unions are bad. Actually, one of the things I found amusing (due to my own preconceived notions about Silicon Valley, formed as a result of reading the young libertarian commenters on HN) when I was going through YC was how much it functions as a union. In a sense, PG is a union leader himself.

Cool. That's my kind of union! :)

Unions are about collective bargaining to result in rules that apply equally to everyone in the union, regardless of value add (instead of value, they reward seniority). YC is definitely not this kind of union. It's much more similar to a powerful advocacy group, whose influence protects its members from exploitation, but stops at about that point.

One important function of unions (which is often overlooked) is training their members to be future proof, so that when their job is taken over by the machines they can go do something else, straight away. YC does this sort of duty pretty well.

Of course, the economic role you talk about is also important, and YC probably aren't doing that part - but then, they don't actually bill themselves as a union :)

Libertarianism is completely compatible with unions in general. You are free to join unions. If libertarians look like they don't support unions, I think it's because they become uncomfortable with the ways unions themselves sometimes (sometimes!) become coercive organizations themselves ("union thuggery" is a thing), we'd be more hesitant to encode into law that certain unions have certain special statuses, and we also recognize the freedom of the employer to just fire the lot of you; I would say it's on the union to prevent that, not the government.

I'll concede as a pragmatic matter that unions may need a bit of extra protection under the law, but it's very easy to overshoot, especially once you've created this new special interest group (the union itself, as distinct from its members) that is going to lobby for ever-more protection.

A libertarian may not look "for" unions to a liberal, because we won't check off the list of things that they define as being "for unions" (mostly various legal protections), but that's all a point-of-view thing.

I'd also observe as a libertarian that well-intentioned "protections" that initially appear to be in the union's favor may not be; the aforementioned "pricing out" of the UAW's labor was in large part enabled by excessively-strong union protections. They would, ironically, almost certainly be better off today if they had less power yesterday. Balance is complicated. Excessively-strong legal protections also provide the environment where it becomes easier for the union to start acting on its own, without consulting its members or even occasionally in defiance of its members. We must not ignore that the union is a new entity with its own existence, we can not simply model it as "a group of employees". (If that worked, we could simply model the corporation itself as "a group of employees", the whole reason we have a need for unions in the first place is that corporate entities like unions or corporations can take on their own existence.)

Detroit has had a 60% drop in population since 1950 though.

If my employer/boss decide to screw me over, what's the worst that can happen?

Suppose exactly the day after a paycheck they decide to stop paying me. 15 days later I don't get a check, and 7 days later I stop working due to the paycheck issue not being fixed (maybe I gave them the benefit of the doubt, it's a minor snafu). At the worst, I'm out 22 days of pay, assuming their high priced lawyer lets them get away with this (highly unlikely).

I don't need insurance for low cost, low probability events.

If you think the worst case scenario is that you don't get paid for a single period, you have not thought things trough.

Here's another scenario for you: Your employer accuses you of gross negligence to get out of dealing with a harassment claim you've made. Now you're out of a job, in circumstances that makes you basically unemployable, unless you manage to successfully defend yourself.

What marginal value would a union lawyer add over an individually hired lawyer here?

You don't need to have money to pay them right at the point that you need to save money the most.

Yes, theoretically my employer could slander me. They could also just move from slander straight to murder, I suppose. So I guess I was wrong about what the worst case scenario was.

Incidentally, in the US the deck is stacked so far towards employees that even if I was grossly negligent, the employer is unlikely to say anything other than "he worked here from $START_DATE to $END_DATE."

That's why they don't need to slander you - writing a lukewarm reference does the same job.

At the worst, I'm out 22 days of pay

22 days without pay if money is tight and you are bringing up kids can be devastating.

You are incredibly out of touch with most workers' reality if you think that wage theft is low cost or low probability.

I've learned in the Internet that USA jobs contracts don't use to include severance, so it's just another world for me. Also I guess an elite developer in NY is paid well enough not to worry about 22 days of pay.

To be frank, I don't trust most unions in my country, I have seen some very bad cases in which unions simply fucked horribly the people they're supposed to help.

But I also know many cases of good unions that faced terrible situation for the workers and saved the day.

So I understand your position for your POV, but don't overgeneralize. Unions are life-savers for many people in many places.

It's interesting that your interpretation of "screwing you over" involves them actually stealing the money that you worked for.

In contrast, a union worker's worst case example of "screwing you over" is firing you without proper cause. That didn't even enter your mind, because that is standard operating procedure at most non-union jobs.

Um, no. Factory owners have a lot of power (lobbying, uniqueness, etc) when compared to factory workers. We're talking about a newly industrialized world, with a new working class. Their response was to form alliances with each other because they share common interests.

There are many reasons why unions are failing now. Factory workers do not form 80% of the workforce (in the developed world) any more. People now work in various different positions and lines of work, so they don't feel that they have mutuals interests with many others.

Power brings corruption. When the unions gathered a lot of power, we started seeing politicians emerging from the unions to take the power. And gradually they started betraying the people that voted for them and took the unions down with them.

Also, there is now a more egoistic mentality in most people. People tend to believe that they're more worthy than the rest, which is all nice until you realize that that is what most people think and only a few of them are actually going to make it.

There are many other explanations and possible causes on why unions failed: "The best they can do is fall back on the default explanation of people living in fallen civilizations"

No, and we can also do better than a startup analogy that pretends that unions and strikes were anomalies in production that factory owners threw money at. There was a lot of blood spilled for the right to form unions, the 8hour work day, etc. No, most factory owners a couple of centuries ago were not just giving away money like a startup. They hired thugs, killers, had governors in their pockets and used the police, etc.

It might be worth trying to get a count at how many workers died fighting for the 8 hour working day over several decdades before presuming that these concessions were supposedly granted easily.

May 1st as the international day for workers demonstrations was a tradition that in part started in commemoration of the Chicago Haymarket massacre, for example.

US unions first started agitating for an 8 hour working day in 1836. Not even the introduction of the Fair Labor Standards Act of 1938 went all the way there.

Hundred years of demonstrations and strikes, leading to the deaths of dozens of labor organisers was insufficient.

To then try to propose the idea that it was easy for management to give in to unions, is ridiculous on its face, and indicates a lack of knowledge of the labor movement.

Speaking of deaths, people too often focus on benefits and not safety. Even in post-war America, a lot of good men died during that industrial boom. An old co-worker of mine was a shift supervisor in a steel mill and he had horror-stories, and this was in a union shop.

These jobs involve a scale of machinery that makes the human body look like a slug in an elephant stampede. The physics of the situation are horribly unforgiving. Without anyone pulling for safety standards, a heavy industrial facility can be a literal and figurative meat-grinder.

When you run a seed fund, everything looks like a startup :)

With all respect to pg, the similarity isn't really convincing. The hottest years of industrialization were before unions finally took over; the era that brought us communism and world wars.

Unions were part of the meta-stable order the world settled to then. Now, as the industry is on decline in developed world (due to a multitude of political and social factors), the unions also lose their potency.

> Difficult though it may be to imagine now, manufacturing was a growth industry in the mid twentieth century. This was an era when small firms making everything from cars to candy were getting consolidated into a new kind of corporation with national reach and huge economies of scale. You had to grow fast or die. Workers were for these companies what servers are for an Internet startup. A reliable supply was more important than low cost.

2007 was when the iPhone was introduced, before Foxconn was in the public mindset....but China's massive growth in manufacturing was well known by 2007...So why isn't China flooded in high-paying union jobs? Or is it because Chinese industrialists and laborers are savvy and forward thinking enough to not every go through the union-building phase?

> So why isn't China flooded in high-paying union jobs?

The Chinese government has very strict restrictions on unions; they're effectively illegal. This is normally considered political oppression, not forward-thinkingness.

Right, but business can profoundly influence government. Hong Kong, for instance, was largely allowed to do business as usual after the British handover. And Shanghai:

http://rt.com/business/china-shanghai-free-zone-527/

> China launched its first experimental economic free trade zone in Shanghai, seeking to transform the city into an international financial hub and drive yuan convertibility. It is intended to boost growth which is now heading for a 23-year low.

If a reliable workforce was so key to strong manufacturing, as the OP claims, then it would seem that there would be strong advocacy for workers' rights. That China has been able to create a massive manufacturing sector with what seems to be little regard for workers would argue against the OP's assertions.

I have no idea which way you are arguing, since the OP was you, and your replies don't seem to address the points raised.

If a reliable workforce was so key to strong manufacturing, as the OP claims

Agreed.

then it would seem that there would be strong advocacy for workers' rights.

Disagree, and historically this hasn't been the case.

For example, in 19th century Britain the demand for cheap labour effectively depopulated the countryside as people rushed to the cities to work in factories. There was a race to the bottom in terms of wages and conditions (eg, children working in mills), and it was unions and a public campaign that stopped that.

That China has been able to create a massive manufacturing sector with what seems to be little regard for workers would argue against the OP's assertions.

There are similarities between China and Britain in the industrial revolution - a huge rural population rushing to the cities for better opportunities. Both Britain and China were hugely successful at creating a massive manufacturing sector while completely ignoring workers rights (although to be fair, China seems better than 19th century Britain in that regard).

Like I said - I'm not sure if I'm agreeing with you or not. If I am, then good.

I think we agree...When I say OP, I mean the post that has been submitted for discussion. I was arguing from a "if OP is correct, then we should expect x,y in China" perspective.

> business can profoundly influence government. Hong Kong, for instance, was largely allowed to do business as usual after the British handover.

Yes, as part of an agreement with the UK, without which the handover would not have happened. Nothing to do with business.

> That China has been able to create a massive manufacturing sector with what seems to be little regard for workers would argue against the OP's assertions.

Industrial Revolution Britain managed to create a massive manufacturing sector with an even more antagonistic stance to unions than China has. There were substantial efficiency improvements after workers' rights became a thing, though given the technological change at the time it's hard to reliably determine cause.

Unions are just another group of people, with leaders and political aims and a focus on advancing their own interests. (This isn't a judgment - management does this, and non-unionized workers do this too).

I've seen unions mired in bureaucracy and questionable decisions, just as I've seen unions with an honest interest in advocating for their members (for example, legally defending members from bizarre attacks from the public and unfounded criticism).

When the leadership and rank-and-file act intelligently, then unions work well. When they operate in bureaucratic and self-serving ways, then they break down and lose public support.

Man, sometime this union bashing must get old.

Maybe unions don't have the leverage they had because China.

Maybe unions don't have the leverage they had because per-worker productivity went through the roof while production did not keep pace.

I am very pro-union and very sensitive to union bashing, but this article is not guilty of this particular bias. If anything, it might be guilty of a slight is-ought fallacy[1].

[1]: http://en.wikipedia.org/wiki/Is%E2%80%93ought_problem

This explanation may well be a partial explanation, but it cannot, by any means, be the only reason, because it discounts a shift in the view Americans (and to a lesser extent the rest of the western world) have toward the worker vs. the consumer. It is undeniable that in the past decades American businesses have placed increasing importance on consumer satisfaction over worker rights and dignity; on low prices vs. fair prices etc.

So this is probably as much a cultural change as a "rational" reaction to economic pressure.

One other point about the "golden age" of unions (say, 1945 – 1973): it occurred at a time when almost the entire developed world had destroyed its entire industrial plant.

At the same time, much of the developing world as we know it now had caught a nasty ideological virus that's not good for industry and trade.

In the 19th century, most corporations operated in trusts and cartels, making it difficult for workers to get a fair deal without forming cartels of their own (unions). Most of the violent struggle labor proponents go on about was during this era, when monopolistic trusts would have hired guns (Pinkertons) to suppress labor disputes, and unions in response developed a tendency towards mob violence of their own.

By the 20th century, progressives had enshrined many labor protections into law and broken up the trusts. Some industrialists, like Henry Ford, unilaterally increased wages to inspire worker loyalty and poach the best workers from his competitors. This is perhaps the most analogous situation to the tech boom we see today, and it's this stage in history that pg writes about. Yet despite their gains, unions not only continued operating as cartels but even, in many cases, continued their violent tendencies and developed corruption and ties to organized crime.

Today we have a situation where labor unions have achieved absolute control of certain sectors (longshoremen, teachers, police, Hollywood, airline pilots). The results vary, but are pretty bad for everyone except whoever runs the union. Senior airline pilots manage to capture all the profits generated by the airline while pushing all of the risks onto stockholders, leading to a bankruptcy cycle. (http://philip.greenspun.com/flying/unions-and-airlines). Longshoremen's unions control the assignment of work, erecting a barrier to entry for prospective longshoremen. Hollywood guilds are satisfied by simply rent-seeking. Teachers unions establish themselves in the public eye as credible authorities on education rather than simply a labor union seeking better terms for its members. (Rhetoric about standardized testing can't be taken at face value--notice how often you hear that a teacher's subjective judgment of student performance is more reliable than a standardized measurement. What the NEA really fears is any system that can measure the performance of teachers rather than simply trusting them implicitly once they have their union card.) Police unions--well, you tell me why shooting a black kid in cold blood gets a cop paid suspension and anyone else criminal charges.

In most cases, unions will resist automation, resist any measurement of performance in favor of seniority, and otherwise impede the efficient operation of their employers. And in many cases, they don't even help the median worker all that much. Once a union has a closed shop, the tendency to reward seniority will metastasize until the union shits on junior pilots and "casual" longshoremen more than management would have done in the first place.

And this is why people who support unions will tell you all about what unions did a hundred years ago, because what they're doing now is not a very pretty story.

(Note: I'm referring chiefly to American unions. In Germany, unions have seats on the board of directors and presumably also stock in the companies their members work for. This presumably tempers the parasitic tendencies American unions have developed. It's worth noting that UAW vehemently resisted having to hold stock in GM as a condition of the government bailing them out of GM's insolvency.)

It has always seemed like there was a real libertarian streak among silicon valley types, but this kind of historical revisionism sounds very "southern republican" to my ear.

The thing is that people fought and died for the, if this is to be believed, trivial concessions that management made to workers. You know, those same trivial concessions that management made with little or no animosity that stemmed from entrenched political viewpoints or historical precedents.

This article is the labor relations version of Jesus riding a dinosaur.

Forgive my ignorance, but doesn't this Paul Graham guy have something to do with this site?

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