Against the real enemy: why organized labor should join with entrepreneurs

http://www.washingtonmonthly.com/magazine/mayjune_2011/features/the_real_enemy_of_unions029138.php

by Khroma • 15 years ago

33 20 15 years ago

evangineer3• 15 years ago

Unions on both sides of the Atlantic have made huge strategic errors in the last three decades that have eroded much of their influence, relevance and power.

Embracing enterprise and entrepreneurs in a deep way would a massive stride forward. I don't see it happening though. Finding a common enemy to unite against is one thing, but the fundamental shift in outlook required to go beyond that is something else altogether.

Labo(u)r will find other ways to organize in the 21st century instead forming/joining 20th century style unions.

hugh32• 15 years ago

Unions on both sides of the Atlantic have made huge strategic errors in the last three decades that have eroded much of their influence, relevance and power.

Probably not strategic errors so much as natural consequences of the fact that the interests of the people running the union at any given time are not quite aligned with the interests of the union.

evangineer3• 15 years ago

Yep, our old friend the Principal-Agent problem strikes again. Misalignment of interests leads to decisions that aren't to the long-term benefit of the organization.

http://en.wikipedia.org/wiki/Principal-agent_problem

cpt1138• 15 years ago

I have an 1:20 commute but its on a bicycle the whole way. If its killing it sure is a fun way to die.

jerf• 15 years ago

The author spends a lot of the article wondering about why Big Labor seems to be whiffing so many obvious opportunities (joining with entrepreneurs is the hook but it's really just one special case of the larger point), but the answer is obvious once you drop the theory for a moment and look at the reality: Big Labor leadership is not the same as Big Labor membership. Leadership has long since become its own entity, and succumbed to the first law of organizations: All organizations inevitably evolve until the perpetuation of their own existence becomes their overriding priority. Big Labor and Big Business are adversarial, certainly, I don't think claiming they are in cahoots adequately explains the behavior we see, but they do require the same basic environment to exist in. Which the article itself points out, but since he's collapsed the two distinct entities into one he isn't quite able to follow through on what it means.

It probably is in the interests of the membership to join with and support entrepreneurs. It is absolutely not in the interest of the leadership to do so.

(I know there is more than one union; I speak in the singular for convenience. In practice it seems to me pretty much every union you've ever heard of is all in the same place.)

The author also trots out the terrible "voting against their best interests" argument (insulting those who don't believe what you do is generally an unpersuasive argument technique) after three pages of explaining how supporting unions has failed to produce the best outcome, the irony apparently lost on the author. I don't vote Democrat precisely because I do not believe it to be in my best interests. I believe with what is IMHO some justification that they tend to trade short-term gains for long term losses, and tend to simply create new entrenched interests instead of protecting mine. I live in Michigan, where the long term losses have arrived. A lot of people have voted their "best interests" around here. Perhaps less insulting and more verification that it really is their "best interests" being served is in order. Second order effects can't be ignored.

The real point of the preceding paragraphs not being to prove that my beliefs are true, as justifying them here would be a waste of time, but that the assumption that not voting Democrat must be motivated by stupidity and lack of self-interest is not fully justified. There are good reasons not to vote Democrat. (There are good reasons not to vote any particular party.)

(Oh, and don't mentally translate "I don't vote Democrat" to "I vote Republican", BTW. It would not be accurate.)

evangineer3• 15 years ago

Regarding conflicting interests in the unions: http://news.ycombinator.com/item?id=2599005

lsc• 15 years ago

huh. funny, 'cause my understanding that the basic ideas organized labor fights for (e.g. pay based on seniority rather than perceived merit, no firings without a well-documented good reason that involves the employee not following the rules and protectionism on the international front) Are largely incompatible with what most Entrepreneurs need.

I mean, this is my perception, and it may be incorrect, but I think it's a pretty common perception among business owners.

And really, when you get down to it, small businesses and entrepreneurs, generally speaking, treat employees much worse than even union-free large businesses. Larger companies do a lot of the things unions want simply because there are hoards of lawyers willing to jump on them if it even looks like they might have a case. I mean, sure, you could bring a wrongful termination case against, say, me... but you'd have a difficult time finding a lawyer to take it on a percentage of the winnings; you can't get blood from a stone, and my company just isn't worth that much.

stretchwithme2• 15 years ago

organized labor IS a monopoly, a monopoly on a company's labor. And having a monopoly on the supply of monopoly's labor supply is the most profitable monopoly of all.

so, no, I don't think unions will want an end to monopolies.

hugh32• 15 years ago

And having a monopoly on the supply of monopoly's labor supply is the most profitable monopoly of all

Indeed, and the holy grail of having a monopoly on a monopoly is having a monopoly on government employees. Witness the way the United Auto Workers formed an offshoot, the SEIU, which now dwarfs its parent.

stretchwithme2• 15 years ago

Well, having a union at old Ma Bell or at a monopoly utility was/can be pretty lucrative. And there's never a rate cut. Governments are always fumbling their budgets.

The government unions are so bad because we can't simply decide "well, I'll just write letters." And its easier to build in time bomb benefits. All you have to do is steer union dues and volunteer labor to those that play along.

yummyfajitas• 15 years ago

This article is silly. Entrepreneurs and unions are natural enemies.

A dynamic entrepreneurial environment is the last thing unions want. In a competitive market with many players and new startups improving things regularly, the union shop will have higher costs than their competitors and they will go out of business. Even if costs are equal right now, a startup will come along and disrupt the industry, destroying any business with rigid contracts.

And if entrepreneurs work with unions, they are playing with fire. What happens when a startup invents the UnionLaborTron (a machine which replaces union laborers)? Work rules incompatible with rapid iteration. My startup employs low skill labor and we have a new workflow every week. If I needed to negotiate with a union rep every time I do that, we would shut down.

Duff• 15 years ago

No entrepreneur in her right mind would allow organized labor anywhere near their business. Best case, you cut out one of three monopolistic entities. (union labor and stockmen, cut meat packers)

Once you let that camel under the tent -- you're screwed.

Example: http://pressrepublican.com/0200_opinion/x1859507528/Labor-ag...

In the example, unions from one area of a state used their political influence to require a type of labor agreement that excludes companies that aren't union shops -- even though those companies pay union prevailing wage.

InclinedPlane• 15 years ago

Why do people imagine that organized labor (in some cases monopoly labor) is any different than big business? When big business has an unequalled advantage it abuses it, trying to milk money out of customers without returning any value. Big labor does the same. Creating bureaucratic organizations that maintain job security and job pay merely for showing up and belonging to the union, rather than actually doing the work better or more efficiently.

pnathan• 15 years ago

I can not figure out the premises of the conclusion. I can sort of figure out how small businesses could help labor from the article, but on the other fork - what do unions offer a small businessman?

Thought experiment:

If I found a small software firm, I will need an office, a janitor on Fridays, a secretary, a marketer-type, and some engineers. (well, I'm approximating here, YMMV).

As an employer, I want to pay people enough so they stick around. I want to pay just enough to get the quality of people I need, but not so much the company is run into the ground. I don't see that a union helps me. If I pay people badly, they will leave; at least the people I hired, who I assume are generally hire-able and good enough to find jobs elsewhere.

Politically, I don't want to have to add this or that to my company's operation unless it makes me money (e.g., our top performer needs child leave, and him staying with leave is better than him quitting).

So, what does a union get me in my Pnathansoft firm? I am confused. Please take pity on me and explain. :-/

temphn• 15 years ago

A lot of people on the left side of the political spectrum are starting to wake up to the fact that many people start startups as Democrats, but quickly become strongly libertarian in their economic views as they come face to face with the realities of government waste, regulation, and corruption.

The Uber and AirBnB founders are unlikely to pull the lever for statists, for example. And this is very dangerous to the progressive movement as startup founders tend to be smartest and most resourceful of their peers. Huge amounts of money has been invested in making sure all college grads mouth fashionable left-of-center slogans on economics, but the movement started by Paul Graham inadvertently threatens to unwind all that.

This article is motivated by that realization and is one (vain) attempt to bring entrepreneurs back into the fold. There are other attempts too, like "Startup America". But in the longer term these efforts are unlkely to succeed as more and more people at early stage companies encounter manifest contradictions between their lived experience and the religion of their birth -- namely progressivism.

lionhearted• 15 years ago

After learning a lot of economics, I went from standard coastal American views to incredibly hostile to labor unions. After learning more about political factions of all stripes, I became more sympathetic.

I think labor unions and similar do have some value, but today's versions aren't going to last. They're fundamentally hierarchical, seniority-based organizations and entrepreneurship is usually anti-hierarchical and anti-seniority.

Actually, that's one of the growing trends that no one's talking about yet. This generation is the first one where a very significant minority of people reject hierarchy-driven organizations and refuse to "work their way up." It still comes unnatural to our generation and there's social pressures against it.

But the next generation that grew up as digital natives, a lot more of them are going to reject the hierarchy and strike off on their own. There will still be social pressure against it, but much less so as our generation shows what's possible (and the people who did reject the standard track are doing pretty well).

The generation after that, our kids, I think the standard hierarchy/seniority model will be near dead for them. But still, there's a lot of people in trades that "worked their way up", and they're going to hate this trend.

It should make for interesting times. As for labor unions, they've really got to stop selling out their younger members if they want to survive. The unions keep bargaining off younger members' pay and benefits to protect older members. That ain't sustainable - there's an entire culture shift going against them, though it's really just started to pick up steam the last 5-10 years.

yardie• 15 years ago

As for labor unions, they've really got to stop selling out their younger members if they want to survive. The unions keep bargaining off younger members' pay and benefits to protect older members. That ain't sustainable

Unions know this but most are between a rock and hard place. When negotiating contracts they can only do it for the people being represented up to that point. Anyone that joins after that contract is signed is on a new, seperate contract. So when a union representative has to bring back the terms to it's members its usually like this, "the company has agreed on the pay scale with us, but any new hires will be on a seperate contract. Do you vote Yay or Nay?" Now each union member has to decide if they will accept the contract as it stands or do they go on strike for some ambiguously defined "future hire".

In fact, this sounds exactly like how our government decides to run its debt. Do we pay it off and take the lumps or push all the hard decisions on ambiguous "future generations"

The fact is people are selfish and unions represent people. Personally, I don't care to join one but I don't get angry at people that do nor do I go postal in chatrooms talking about them.

danbmil99• 15 years ago

We need a new blend of progressive and libertarian principles that honors the concept of respect for those who work, but does not support the dinosaur ideology of big labor.

Big labor is bad for the same reason big govt and big business are bad -- it exists to exist.

known• 15 years ago

India is developing since you can exploit Indians via caste system. http://www.rediff.com/news/2007/may/03touch.htm

China is developing since you can exploit Chinese by abusing human rights. http://www.rediff.com/business/slide-show/slide-show-1-tech-...

Americans are suffering since US regime is letting Chindia exploit their people via outsourcing.

da_dude4242• 15 years ago

In one of his interviews, John Mackey pointed out that there are legislative reasons for this as well. America isn't allowed to have in-house unions like those of Japan. The present laws predispose unions to antagonistic relationships.

Against the real enemy: why organized labor should join with entrepreneurs

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