If Labor Can't Beat 'Em...

Unions need to modernize by becoming for-profit corporations supplying skilled labor.

Editorial cartoon on the United Auto Workers.
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Friday night’s defeat of the unionization effort at Volkswagen Chattanooga is sad news for the union movement and workers in the auto industry generally – but it may turn out to be sad news for those who opposed it, as well.

The company supported the unionization drive because it wanted a labor partner it could work with to institute efficiency and productivity improvements as in Germany. Normally, conservatives would tell everyone to butt out when a giant corporation knows how it wants to treat its workers and what’s in its own best interest. But, as I noted before the vote, that apparently doesn’t apply when the company bucks conservative orthodoxy – as is increasingly the case with companies that believe that higher pay and decent treatment of workers is a good way to elicit better productivity and higher profit margins. Right-wing politicians and funders weighed in to influence the vote, against the wishes of both the union and the company – including threats by Tennessee legislators to repeal tax incentives for the company to create jobs in the state. Apparently, these ideologues believe that the role of government is to support the creation solely of low-paying jobs.

The winning argument for union opponents turned out to be an agreement signed by the company and the union before the vote that, if the union were certified, the two sides would work together on "maintaining and where possible enhancing the cost advantages and other competitive advantages that [Volkswagen] enjoys relative to its competitors in the United States and North America." This was misrepresented by opponents to mean that the union had sold out the workers by agreeing ahead of time to hold down wages and benefits.

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But the United Auto Workers contends that the point was to work cooperatively with management to keep the company competitive – instead of chronic labor warfare over a shrinking pie. This is an attitude that unions are increasingly adopting and which you’d think pro-business groups would welcome. It would benefit not only management and labor, but also the country.

The UAW’s defeat in Chattanooga probably means the end of unionization drives at auto plants in the South. Analysts expect nonunion firms increasingly to dominate the industry’s labor market, putting greater downward pressure on wages even in unionized workplaces. Opponents of unionization everywhere are celebrating.

Perhaps they shouldn’t be. Even Henry Ford recognized the wisdom (and profitability) of paying his workers well enough to allow them to buy the cars they were making. Beyond this, however, one has to presume that those interested in obtaining a higher share of revenues for workers will start looking for new strategies. Let me offer a modest suggestion: It probably lies with making unions more like the businesses with which they contend.

Modern labor laws are a jury-rigged way around the fact that labor has never been treated as combinable the way money (or any other factor of production) is. If you and I pool our money or land to build a factory and dominate an industry, well, that’s capitalism; if we bond together to present employers with a joint (and higher) price for our labor, that’s bolshevism. 

Workers coordinating wage demands could be treated as a conspiracy in restraint of trade for most of American history; the issue was only definitively settled a century ago with the Clayton Act’s declaration that "the labor of a human being is not commodity or article of commerce," thereby exempting unions from the antitrust laws. Of course, the idea of a human being’s labor as a tradable article is anathema to many who abhor the notion that everything in life can be quantified, monetized and commodified. But a joint stock corporation can be established to combine the capital of millions of nvestors, which can then purchase millions of individual ears of corn in thousands of lots, which are then processed and repackaged into billions of foodstuffs constituting a huge share of the worldwide market – so why can’t work effort be similarly combined, repackaged, and resold? Specifically, why couldn’t a “labor supply company” buy up people’s “work availability,” aggregate it, and resell it to other companies looking to meet their workforce needs?

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Firms like Kelly and Manpower have been doing just that for decades – although generally in temp jobs. Some firms specialize in handling “human resources” for other companies, while still others provide full executive management teams. In short, it’s not at all unusual to combine the labor of multiple workers into one blended labor-supply product that businesses purchase from a single corporate supplier. Such suppliers extract a profit for their services: obtaining individual workers, bundling them into an easily-purchased workforce, maintaining quality control. And if they’re the only, or at least the biggest, game in town, as in any industry they can command an even higher price.

But what if such a company were worker-owned, so that the oligopoly benefits accrued to the labor itself? What if that premium grew because more “raw labor” became part of the supply firm’s “product” and thereby increased its market clout? What if the firm worked at constantly upgrading the quality of its product by investing in the kind of workforce development that most American businesses claim to want and need, so that the firm – and its worker-owners – derived an even higher share of productivity gains as they accrued (and as American workers once did)?

Well, you’d have a for-profit union. Unions today in fact provide all the foregoing services, except for making money off all of this. Someday, though, one of them is going to adopt that model, which would take it outside the constraints of labor law and let it compete on the same playing field with other businesses. And you’ve got to wonder how all the union-haters will react when the workers start getting a larger share of the pie by acting like the capitalists. Given their reaction to corporations from Punch Pizza to Volkswagen thinking that workers deserve better, they probably won’t be happy.