Static Job Cling

Tyler Cowen takes on the leftosphere meme du jour, stronger unions[1], by pointing out some inconvenient truths:

Germany is now moving toward a two-tier labor market; guess which tier the new jobs are being created in? I have never known a Vereinigte Dienstleistungsgewerkschaft to support the "creative destruction" which is the lifeblood of capitalist innovation. Unions are better suited for a relatively static set of manufacturing tasks, precisely the jobs which are disappearing from Germany and also from the United States. Read this too; German unionization is down to about one out of every five jobs. Unions are declining more generally throughout the OECD.

The dynamism aspect is key to me. Unions, historically, are very very anti-change and anti-innovation. Unions have (deservedly, IMHO) a reputation for being a big, big negative to the corporations they attach to, so no wonder newer corporations try as hard as they can to stay union-free. The only time I remember seeing something where a union helped productivity was an ill fated story about a airplane maintenance plant, where at first things were great and it raked in a lot of money, then one incident happened that snowballed into one work stoppage after another, until the operation became so dysfunctional that they closed the whole shop.

As Tyler also says above, unions work best when a job function is general and many people can fit into it; modern labor seems far more fragmented in terms of what skills command which jobs that there isn't a big enough pool of any given 'job type' to profitably organize to squeeze extra juice out of the productivity pie, and thus part of the decline in membership. The other bit is that unions effectively act as parasites on their companies and once the parasite load becomes too much, their host corporation dies et voila, no more union local.

Digressing, I've always wondered why unions hew to the feudal / 19th century mode of operation, where they are 'workers' against 'the bosses' and thats how they negotiate, etc, and why they didn't instead simply form a labor corporation supplying workers and dealing with overhead, etc, and market their members accordingly? One corporation to another seems to me to be the same power relationship as 'collective bargaining', and indeed an employee owned labor company would by definition always collective bargain. Why isn't UAW a professional services vendor?

Just curious...

fn1. This talking point is on the recurring cycle, it never really goes away, especially from Kevin Drum's blog, as if you listen to Kevin unions are responsible for the middle class, high wage productivity, winning WWII, saving Christmas and puppies. I'm sure he'd tell you that if there's a problem (any problem at all), then much like Vanilla Ice, yo, Unions will solve it. [check out the beat while the progressives revolve it...]

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