This piece is part of TPM Cafe, TPM’s home for opinion and news analysis. It is an excerpt from “Narrative Economics: How Stories Go Viral and Drive Major Economic Events
The answer is quite simple really, although Mr. Shiller gives us much of the history & details. Too many in executive management, who believe that the sole function of any enterprise is to line their pockets and the pockets of their shareholders, period. To that end, they lie, deceive, obfuscate, cheat and steal. Donald Trump is the perfect example. Moreover, far too frequently, management demonizes labor as lazy, evil, socialist, and even communist.
In most cases, most labor unions work to secure for their members and others that they represent fair wares and benefits; good, safe, and clean working conditions, and a fair voice in the way the enterprise conducts its business. Many companies who work to understand this and to engage with, rather than war with their unions are pleased to see that everyone can benefit from sincere, honest, and forward looking collective bargaining.
Thank you for this substantive and absorbing piece.
George Meany, white union workers supporting racist Republicans, and white union workers beating up the dirty hippies protesting the war in Vietnam did not do much to build a strong pro union foundation of support for unions going forward.
“Right to Work” (for less). Don’t worry about things like wage-price spirals. The average person really does not understand these economic theories. That person does think that Right to Work sounds so reasonable. After all, who is opposed to people being allowed to work? This “movement” in the states makes it almost impossible to vote a union into any workplace. What a despicable “conservative” idea.
Although the wage-price spiral may have played a supporting role in the demonization of unions there were many other narratives (union corruption, violence, featherbedding and so on) that had a more important effect. Mathematically speaking, it would be difficult for cost-push price increases to have a significant effect on inflation unless union membership was a majority or a large minority of the labor force (in which case only a minority of workers would have to worry about being “left behind”.)
It might be useful to see some of the wage-price spiral rhetoric in terms of class distinctions – if union workers had their wages protected against inflation (either by direct negotiation or by COLA clauses in their contracts) that would leave white-collar and professional employees at risk unless they could get similar increases. Which is to say, the educated elite being threatened by those dirty rabble. (This has played out repeatedly at Prof. Schiller’s institution, with a long series of debilitating strikes by blue-collar workers.)
Inflation has also been a threat to home-owners as a class – typically real estate has been considered an investment and/or a retirement nest egg, but that only works if house prices rise at rates significantly faster than inflation (and if employment is stable enough that people own houses for long enough to cover transaction costs). This second factor may even have pitted union members against union members during the era when working-class people could comfortably save.
But I think the real myth of the evil labor union has always been associated with violence (ironic considering the long history of violence against workers trying to organize). Labor employs “goons”, capital employs “security”.
Wage negotiations should also take cognizance of the right of the public generally to share in the benefits of improvements in technology.
Emphasis on right.
The corporate person has a duty to share equitably. No job is a thousand times more valuable than another. The corporate person lies and cheats.
How We Ended Up With The Myth Of The Evil Labor Union
Good article but there’s a one-word answer: Greed.
Growing up in the 60s and 70s in suburban Philadelphia, I can remember hearing the stories on the radio about the UAW getting another exorbitant contract to continue building cars that, depending on what day it was built, may or may not have actually had any quality built in. My 10th grade history teacher told us how to crack the code on the VIN so that we only bought cars built on Tuesday and Wednesday - he’d worked in a GM plant during his college years and saw the drunk and high workers after and before the weekends.
I had another direct experience with this when I worked in a car parts manufacturer in suburban Philadelphia in the 90s. It was in the days of NAFTA and one of our product lines was moved from a UAW controlled plant (that had had an awful and contentious strike just before I started there) to a new maqulladora plant in Nuevo Laredo. The company had moved the machines there, so the equipment was the same, and we ordered the same components for the product line, so the components were the same. Inside of one year, the Mexican workers exceeded product line quality standards by multiple orders of magnitude - standard that the UAW workers could never achieve.
I understand the concept of evil labor unions. I can’t defend what I personally witnessed on the US side.
“Wage-price spiral” is hardly the reason unions became unpopular. There are two main reasons,
“Labor unions became associated in the public eye with organized crime.”
This is a big one. Hoffa was part of it but he was hardly alone.
The second big reason is the belief that unions allowed workers to get away with doing very little work.
For an illustration of both factors at work, see several episodes of “The Sopranos”. Tony Soprano controls the local unions, and they let his well-connected friends bill for hours they never work, or if they actually appear, they just sit in lawn chairs reading and chatting.
And a third one (pushed heavily in “right-to-work” states) is that union workers are overpaid so they can’t hire enough people, which is why you’re stuck in a minimum wage job instead of being able to work in the same factory.
Also, let’s not pretend that unions weren’t connected to organized crime. One of the union leaders here was just convicted in a big bribery scheme. Even on a small level, the people trying to organize my workplace were using deceitful and illegal tactics.
I trust unions a lot more than corporations because at least the stated goal is to support workers. But be real: any large organization where a lot of money is at stake is going to develop this kind of institutional rot, pushing the legal and ethical boundaries to get more for themselves and supporting bad actors within their own ranks.
Organized Capital has demonized Organized Labor for decades.
People still bitch about union guys not working hard enough. Shareholders, who contribute nothing whatsoever to any aspect of production, have whole cable networks devoted to preserving and defending their entitlement to all the profits.
I’ve literally read sympathetic interviews with businessmen who can’t figure out why it’s so hard to hire good help, even when they’re generously paying 9 bucks an hour. Then I turn to the classifieds and no apartment for rent is affordable on less then $10.
Funny how fiction that demonizes unions is just fine. Imagine a show in which part of the story arc involved jews controlling the financial system…
I experienced a form of this. In the early oughts I was working in Seattle. At the time I was earning in excess of $100K. I got a call from a Microsoft recruiter offering me the exact same position as I currently held at the time. They described the position and breathlessly stated that the salary would be $30K. The recruiter took offense when I laughed at that and said no thanks. He could not understand why I would not jump at the chance to work for Bill Gates at Microsoft. A couple of days later Bill was in front of Congress lobbying for additional H1B’s, his argument was MS could not find enough Americans to fill the positions they had open.
This is a deliberate and unlawful tactic that’s been going on at least since the early 80s. You can/could get a special visa for someone otherwise not eligible by certifying that there are no US residents available for the job. Which you do by advertising the job at a ridiculously low salary and getting no takers. Often done when you have someone on a student or other soon-to-expire visa whom you want to hire.
Also a really good reason for unions because it’s harder to create those fake job openings and unions have the resources to keep eyes out for that kind of thing.
Agree. Before I retired I’d get “recruiters” calling about jobs, or more likely sending one of a dozen like emails daily. You knew they where doing exactly as you describe when one of the mandatory questions that needed an answer on your very first contact was what is your current salary. If I was interested I’d answer upon a written offer I’ll supply that information. Not once would I hear back. I took it as the “recruiter” actually worked for one of the offshore firms coming out of India and it was their means to say to the client see we have tried and can’t find people, how about we provide for your requirements with offshore staff.
In addition to the Jimmy Hoffa case, there was also the murder of Joseph Yablonski and his family in 1969 by killers hired by a union political opponent, Mine Workers president Tony Boyle. Boyle was convicted and sentenced to three life sentences and died in prison.
In 1960, Bobby Kennedy wrote The Enemy Within: The McClellan Committee’s Crusade Against Jimmy Hoffa and Corrupt Labor Unions. Bobby was no capitalist stooge.
There really was a lot of rot in organized labor in the 1950s and 1960s and it contributed to the downfall of the unions.
I still experience this every day. 24 years’ experience and people still want to offer me a junior consultant (read fresh out of school) salary. So they go off and hire an H1B. Six months later, or a year maybe, they need someone to come in and FIX what they did because it doesn’t work.
It is a reminder of the old manufacturing saw: why is there never enough time to do it right the first time, but always enough time to do it over?
I chuckled over that statement. A story, back in 1980 was hired in June to help fix the payroll system for a large retailer. They still had not gotten the prior year’s tax statements out to employees. The biggest issue was that for 100 years the company had used a 4 digit numeric identifier for stores/divisions. The payroll system as implemented required a 2 character alpha/numeric identifier to identify such. So this meant a translate table and caused all kinds of problems, not the least because all other corporate systems still used the 4 digit numeric. As I worked the problem, I noticed that the very next field was a 4 digit numeric. I asked why they did not use that. The answer was the 2 character field was required. Being a smart azz, I had to ask, why not just use a dummy filler field and all would be fine. The answer was that the just out of college consultant that was hired to implement did not think that was a valid use of the field. It took nearly the balance of the year to get everything straighten out. On January 2, I printed the tax forms and the payroll manager verified and approved. Coming back from lunch my boss called me in and fired me stating that I caused more trouble than I was worth. So much for getting the job done efficiently.
I experience it every summer in the tourist trap I Call home, where every t shirt store, mini golf and the go kart track is staffed by kids who look and sound like FLOTUS Melania’s nieces and nephews from back home.