Unions....Good or Bad
Dispute in Wisconsin
On the remote chance you've been off planet in the last few days, there is a large protest occurring in Wisconsin by employees of the state, and the proposed increases they will see in health insurance costs if the Governor's budget is passed. In addition to the increased costs, the unionized workers will also lose some of the collective bargaining power they now hold, making it more difficult to win a better contract in future negotiations. The differences are so sharply divided among the state's lawmakers, that the Democrat's in their refusal to pass the legislation have left the state to prevent the Republican dominated administration from bringing the issue to a vote, where it would pass on party lines.
Like much of America, the one party favors organized labor while the other does not. Maybe both have positive reasons for their positions, but the question begs asking, are unions really good for our country?
According to an AFLCIO website, nationally union membership averages about 10%. The highest percentage of unionized workers is New York at 24.2% while the lowest is in North Carolina with 3.2%. California boasts the most unionized employes with a total of 2,431,000 and Wyoming the fewest with 18,000. Nationwide our country has about 14,716,000 workers who are represented by union organizations.
Effect of Unions on the Economy
I can remember as a student, one of my teachers in Social Studies mentioned the book, The Jungle, by Upton Sinclair. I hadn't read that one, and neither had the majority of students in the class. But the discussion was thought provoking, and when the opportunity a few years back to read it came around, I didn't hesitate. If you have never read it and would like to, it can be found as a free download at many Internet sites through a Google search.
The story describes, somewhat vividly, the conditions in packing houses in Chicago around the beginning of the twentieth century, the unsafe conditions, the lack of regard for workers, and the lack of quality control standards to insure a safe product. It was the product safety issues revealed in the book that contributed to the passing of The Pure Food and Drug Actthat same year which led to the formation of the FDA some years later. But the working conditions and worker safety issues as told served to empower organized labor unions by revealing how bad things were. In the ensuing years, conditions improved and unions grew stronger.
More recently, as both General Motors and Chrysler were bailed out by federal money, the effect of organized labor on the cost of goods came to light. It was revealed that autoworkers were receiving a wage and benefit package worth about $70 per hour. Annually that comes to over $145,000. It was also revealed that the United Auto Workers Union had attempted to negotiate a program that would pay laid-off auto workers $31.00 per hour, a shocking $64,000 annually for doing absolutely nothing, and doing so at the consumer's expense. Recent figures indicate the health benefits demanded by the UAW for active and retired workers added $1200 to the price of each new General Motors Vehicle.
In the business world, the interaction of supply and demand are observed by the use of a graph showing the curves for each respectively. Pricing, and availability are both demonstrated by the graph as well, and it is an effective way of illustrating how prices go up or down based on how much a product is wanted, or in what quantities it is produced. Labor disputes, in which workers refuse to produce goods and services are meant to force the employer to meet their demands or suffer the lack of production and the financial loss that accompanies it. This shortage produced by the strike, could potentially result in lower supplies, and consequently higher prices for a product if it continues for a sufficiently long time. The Teamsters Union in 1994 involving the trucking industry slowed the delivery of products to the consumers. Longshoremen in 2010 shut down several ports, costing the shipping industry hundreds of thousands of dollars. These were expenses that to be recouped, likely resulting in higher prices all the way down to the consumer.
Now consider, the depth and breadth of union membership in the day to day things that we take for granted in our lives. By far the largest number of union members are employed by the government. This includes police, firefighters, teachers, and other public sector workers, all of whose salaries and wages are paid from tax monies. Transportation and utilities is number two, and obviously, these highly paid workers are paid directly by the consumer, who most often makes significantly less money than they do. Construction, manufacturing, and health services are fields where a lot of workers are unionized as well. This raises prices on buildings, homes, highways, candy, medicines, doughnuts, and just about anything else you might need or want. There is no doubt that the effort to protect the union members is costing the American public a huge sum of money in the form of higher prices and taxes.
Now if it seems like I'm not in favor of unions, well I guess I'm not. It just seems like I've seen a lot more negative things than positive things where they're concerned. I admit, I believe in capitalism and a free market economy, and I think that's the best way to insure an adequate supply of goods and services at an equitable price. I'm also aware of the "evils" of capitalism which when combined with other societal ills can create the situation as seen in Sinclair's book. So it might be safe to say that even in a free market, business and industry have some social and moral obligations to the population. And while the unions as they've been credited for doing, have brought about some change, I don't believe the need still exists as it did in 1906.
I can recall as a young child, hearing about strikes that had been called in places where family members worked. During the fifties, a large number of farm boys growing up left the land and moved to cities to work in the manufacturing jobs there. Starting then and continuing up until as recently as 2001, at least one of my uncles and as many as three were employed at General Motors in Kansas City. Labor disputes back then meant I got to see a lot more of my cousins than when things were going smooth. For the parents, it meant tightening belts, maybe visiting family and waiting for things to get better. Then as I grew older, I saw things from a different perspective.
I started working my first full time job in 1974. It was a small plant in eastern Kansas that produced extruded plastic products for weather seals around windows. Our home office was in Elkhart IN, near Chicago, and it was well known that workers there were unionized and making at least double the wage we were. They also had benefits like health insurance, sick leave, profit sharing, etc, while the only thing we received was paid vacation. At some point, we found out those same benefits extended to the management and office people at our location, but not to the rank and file workers. Disatisfaction grew, and as a group we attempted to organize, form a union, and negotiate a better deal. It was a short lived movement, but we did get some concessions. Regardless, the pay was so low, I soon moved on.
IBP, Emporia, KS
The Packing House
In 1976, I took a job with a company called Iowa Beef Processors, or IBP in Emporia, KS. IBP formed in 1959, the brainchild of two businessmen from the Denison area. Prior to IBP's revolutionizing the industry, cattle were shipped by truck or train to large metropolitan areas such as Chicago or Kansas City. Wichita was another "slaughter town" with a number of packing and rendering companies adjacent to the city's stock yards. The slaughter facilities only butchered the animals, meaning skinning, gutting, and dressing them for market as "sides of beef" or one half of a beef animal split into either right or left side. Usually they were further reduced to either front or hind quarter, and then sold to supermarkets across the country for processing into the retail cuts.
This was a business model that had worked well from the early Chicago days described by Sinclair up to the day Andy Anderson and Currier Holman got to talking about it one day in Anderson's garage. Slaughter houses in that day were multi storied buildings that involved different operations on different floors. Moving of the carcasses was generally accomplished by manual means, with the help of carts, trolleys, or other devices. Anderson and Holman were experienced in the industry, and visualized a concept that would make things more efficient, included automation, and utilized single level buildings. The idea was to be more economical, and able to provide the goods and services a lower price. For the first few years, it worked quite well. IBP purchased, or built plants in several cities in the Iowa/Nebraska/Kansas area and began to hold a significant market share.
Amalgamated Meat Cutters Union formed in 1897 consolidating seven local unions in the Chicago area. They represented butchers and meat cutters with 56 different departments, one for each skill, or craft as they were called. They approached IBP workers with the desire to represent them, but were only partially successful. In some states, including Kansas, workers have the "right-to-work" where they are not required to strike even though they might be a union member, and they are not required to join a union, though one is representing workers at their place of employment. Other states such as Oregon are not "right-to-work" states. In those states union membership is compulsory, and if the union strikes, so do the workers. Because of this difference in laws, at the time I went to work at IBP, Amalgamated Meat Cutters were representing only the employees at IBP's corporate location in Dakota City, Nebraska, while the Emporia Plant was non-union. Another plant in Amarillo, TX was probably unionized, but the workers had signed a no-strike clause in their contract.
Multi Storied Facility in Wichita
A year or so after I started my job with IBP, the union contract at the Dakota City plant expired and talks began to negotiate a new one. In keeping with most such negotiations, the union presented a list of demands that included higher wages, better benefits, and so forth, along with all the reasons these needed to be met. Also,in keeping with most of corporate America, IBP denied most or all of these and countered with extending the existing contract until the next regular expiration date. Negotiations failed, talks broke down and the union voted to strike.
Almost immediately, picket lines formed around the plant in Dakota City. IBP didn't hire replacement workers right away, and the plants output declined to nearly nothing. In addition, union members showed up at non-union facilities including Emporia and picketed there. It was well known that the Emporia plant had numbers of pro-union employees, and it was hoped that the strike would help rally workers around the union's cause, and the workers would vote to unionize, giving Amalgamated an much needed advantage. IBP managed to stave this off, and used the opportunity to tell their side of the story to employees.
As it turned out, Amalgamated Meat Cutters at the time represented some 50,000 workers at the retail butcher level. This meant that the largest sector of their membership and the greatest source of revenue through union dues came from the small meat departments at the local grocery store. They also represented workers in some of the large slaughter facilities, but these were becoming more mechanized and automated, resulting in fewer workers at that level. IBP had developed designs and plans for breaking down the individual sides of beef into smaller cuts, often de-boned and trimmed of excess fat, then boxed and sold to supermarkets. The supermarket workers then, only needed to cut these into the retail cuts, and package them for sale. Supermarkets no longer needed the highly skilled butchers, and departments were downsized. The Amalgamated Meat Cutters Union saw this as a reduction in their membership, and viewed IBP as a competitor for their members jobs. We were told the union's mission and goals were less about representing IBP employees and more about reducing the company's viability, and influence in the industry.
The strike was hurting the company in the diminished capacity, however, and IBP was forced to take steps to counter that. All other facilities in the company were given mandatory overtime and increased operating hours by twenty percent. My forty hour week went to forty-eight or fifty hours, and included Saturday every week for over a year. Our supervisors were sympathetic, knowing we were being asked for a lot of extra effort, and tried to compensate by allowing people to leave early, if the workforce was sufficient. We took turns at that, and generally morale was high. It helped too, that all overtime was paid at the overtime rate, and earnings meant better than normal annual bonuses. Employees in Emporia prospered while the ones striking in Dakota City went into debt, lost homes or cars, and at the end settled for the original offer made by the company. Overall the labor dispute while at opposite ends of the ideological spectrum was non-violent. A few cases in Dakota City were reported, but the other cities had only minor traffic back-ups due to the picketers.
The Unions in Wichita
In the mid eighties, I was moved by my employer to Wichita selling supplies to industrial and aircraft customers. Wichita has always had a large cross section of industry types that included meat packing firms, but also boasted the three major aircraft manufacturers at the time. Boeing Company was by far the largest with a facility the size of a small farm in the town's southeastern corner. At least two unions represented workers there, one for machinists and factory workers, and the other for office employees. True to form, management was not represented by the unions, and in the issue of a contract negotiation or labor dispute, were considered adversaries. Boeing has been hit by multiple strikes organized by the International Association of Machinists and Aerospace Workers Union, since I first lived there sometimes as often as every three years. These strikes are aimed at Boeing, but unavoidably, the effects extend to others in the community as well.
The most noticeable was traffic snarls. Boeing's location near arterial traffic ways meant that as workers entered the plant, most were forced to a stop and listen as union members expressed their views. The cars were essentially let in one at a time which meant a traffic jam of over an hour just for the management and non-striking workers and that happened several times a day. Then after a few weeks, other effects were seen. The IAMAW at times had as many as 25000 members, which was a significant percentage of Wichita's workforce. These people went from very good pay to little or nothing overnight. Kansas law does not allow for unemployment benefits due to labor disputes, and strike pay from the union was less than two hundred dollars a week. Participation in the picket line was required to even draw that paltry amount so soon local business started to suffer also. Restaurants were hit first, followed by any business offering non-essential items. It trickled down to dealers in automobiles, boats, and recreation equipment, and eventually resulted in delinquecies of money owed to charge accounts and utility companies. At one point, some striking workers were dependant on food pantries to feed their families. A side effect was the downturn seen by business that supported Boeing's efforts. Sales of capital equipment were canceled, and even the basic day to day office and maintenance items took a hit. Most of the time, the strikes on Boeing were settled after a few months, but it seemed a contract negotiation was impossible without an accompanying strike.
Through all of this my experience with unionization was secondary. I hadn't belonged to nor been represented by a union in any of my jobs. I knew some union promoters at IBP, and was even good friends with them, but never went over to their side of any issues. During that time, another friend was laid off from Santa Fe Railroad, and being a staunch union supporter, chose living near poverty over going to work at IBP without union representation. I didn't understand his position at the time and still don't.
Then in 2008 I was offered a positon at a Georgia Pacific mill in Oregon. Union membership was required as a condition of employment, and I signed the paperwork my first day on the job. I was prepared to jump in and work hard, show myself a willing worker, and the company was expecting that. The union however had other ideas. During the orientation period, several members gave various talks about the benefits of union representation and how much easier, safer, and higher paying our job was. One of them told us while wearing a sober expression that without the union the company would pay ten to eleven dollars an hour and we would have no choice but to accept it. Then his face twisted into a smirk and he said, "As it is I make eighty thousand a year and buy whatever I want." It became apparent in the ensuing days that unionized employees were loyal only to their unions. The employer was secondary.
More examples followed. As new recruits, the union demanded our work be sacrificial to the point of breaking the labor laws. Oregon law requires a ten minute work break every two hours. We received the breaks, but were told that in order to appear more eager, more willing to succeed, that we needed to limit our breaks to five or at the max seven minutes until our ninety day probation period was over. After that, having qualified for union representation, we would be able to take forty-five minutes like the others did.
The plant ran twenty-four hours a day, three hundred and sixty-five days a year. Workers rotated shifts, and were required to work overtime as needed. I watched one worker who was operating an automated paper re-winder, fall asleep in a chair and allow the tool to go idle. Even the alarm didn't wake her up, and it wasn't until someone shook her that she became aware of the situation. At least fifteen minutes of production was lost, and the only reaction from her co-workers was laughter. Management was powerless to reprimand or discipline her in any way. Another worker failed to see an improperly positioned package of tissue in a bulk bundling machine, which then went into the warehouse. A day later, other pallets of bundles stacked on top of it fell over, dragging as many as twenty pallet loads of product with it. Anyone caught in this "avalanche" would have been seriously injured or even killed. The worker only grinned broadly knowing that since no injury resulted, he was in no trouble. The new employees were rewarded with a little extra hard work to clean the mess up.
I worked at Georgia Pacific for about six weeks before we parted ways. During that time I spoke with a number of employees and the underriding theme was the loyalty to the union. Union members were our brothers and sisters we were told. They were the only ones we could count on and the only ones who knew what we were experiencing on our job. It could be seen in their attitudes, and their sense of entitlement. One would have almost thought payroll emanated from the union, or that the union was the employer and Georgia Pacific was a client that the union contracted with. In some ways that may be closer to the truth than I realized.
Georgia Pacific is owned by Koch Industries of Wichita KS. Koch Industries is owned by billionaire brothers Charles and David Koch. These gentlemen are well known members of the Libertarian Party, and generally promote a conservative political stance that is counter to organized labor and union membership. Georgia Pacific has multiple operating locations, some of which are in right-to-work states, and what effect, if any, this will have on the company's mills in Oregon remains to be seen. I've often wondered how much more we pay for bathroom tissue, and paper towels since at least some of the workers manufacturing the product are making more than double the state's minimum wage. On an interesting side note, David Koch's name has been mentioned in the Wisconsin conflict as a supporter of the Governor's efforts.
Georgia Pacific's Halsey Plant
The situation in Wisconsin drags on with little change, but a plethora of fresh allegations and political spin on a daily basis. At the time of this writing, all members of the Democrat Party remain out of state to keep the measure from coming to a vote. But the question of whether workers have a right to organize and bargain collectively for better pay and benefits is overshadowed in this case by a much larger question. Should government employees be allowed to organize and bargain for better pay. The answer to that question starts with determining who government employees work for. There is a tendency to see our leadership as a separate hierarchy in our country. Congress members who have "served" for over fifty years, and prominent party members appearing in the news all the time make it seem like a private club closed to those of us in the rank and file. And we see those at the IRS, or the SSA, or the VA or TSA, or any number of federal and state institutions as the ones in control. Our lives in the private sector are too often looked at as being subservient even by ourselves. But as the ones who generate revenue, and create wealth, the taxes we pay are used to compensate and benefit the employees of the government at all levels. This includes the President, Vice President, Congress, Supreme Court, and all other public workers. So since we are paying taxes to provide their living, aren't we their employers. As as employers, don't we have some say in how much they earn, how much retirement they are eligible for, and their benefit packages. The voters in Wisconsin said yes. The Governor is trying to deliver that message.
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