Beer and neoliberalism:
But I do hear a lot more from people who think of themselves as being “to my left,” who seem to me to spend a lot more time talking about the desirability of being more supportive of labor unions than they do talking about what concrete steps they want to take to achieve this mission. In a highly competitive market, there’s not much surplus for unions to get a share of.
It really, really annoys this man that anybody consider themselves “to [his] left.” He is determined to prove that anybody who does so is irrational or unserious.
This has to be one of the most profoundly frustrating things I’ve ever read on this topic that wasn’t in a comments section of Crain’s. Presumably Yglesias knows how labor markets and collective bargaining work, and he realizes that surpluses have precisely nothing to do with either the process of unionization or the right entailed by collective bargaining.
Ignoring for a moment the tone deafness of making his point about surpluses by using the socially necessary and universally identifiable world of craft beers, Yglesias says that cartelization of an industry (in this case, the beer market) makes unions stronger because they’re in a position to demand more of the rents. Yes, sometimes. So? Does that mean you can’t have competitive firms with heavily unionized workforces? For example, Southwest Airlines, or any of scores of other examples? Alternately, when single firms enjoy massive marketshare, does that make them somehow more amenable to unionization in the first place? I’ll pick an example out of the blue–Wal-Mart.
Wal-Mart is immensely profitable not thanks to any cartelization but in part because it is able to keep wages and benefits shockingly low while its competitors, particularly in the grocery markets, cannot–because they are unionized.
The argument being made here is that if unions go around unionizing small, barely profitable firms, they aren’t going to get much cash. Or that unions need cartels to grow. Or something. This misunderstands two key things: first, collective bargaining isn’t about skimming cream, it’s about a more even bargaining position for wage earners at firms, particularly large firms; second, it is getting to the point of collective bargaining–where the issues of profitability and “surplus” kick in–that is the hard part. When we talk about the need to grow unionization, we mean we need to make it easier to organize in the first place. The question of the competitiveness of unionized firms relates directly to the difficulty of unionization.
The problem labor has in competitive market places is not the lack of this “surplus,” it is the fact that firms whose union-busting is more efficient are able to force prices downward to a point that drowns their union competitors. Wal-Mart provides a perfect example of this, but you can look at any market. This was the entire concept behind SEIU’s infamous Justice for Janitors campaigns of the 1990s–going after the largest employers in a market simultaneously to prevent a situation where unionized firms were starved out of the market by union-busting firms. The lack of enforcement of collective bargaining rights on par with property rights puts union firms at short-term competitive disadvantages. But Yglesias starts his kvetch at the bargaining table, not the boss fight–in other words, after the hardest part is over. So when we–we loony, unserious, left-wing supporters of collective bargaining rights–talk about “concrete steps” that are “workable” what we mean is that we need to enforce worker rights as property rights precisely so that union-busting does not provide such a short-term advantage to firms. The reason SEIU went in and organized the largest employers in metropolitan janitorial markets all at once was to preclude the emergence of this comparative advantage for better union busters.
The right to unionize is not protected in this country–not by legislatures, not by administrative bodies, and not by the courts. That needs to change. How? Well, one start would be for people who claim they are progressives to stop talking about unionization as an abstract market strategy and realize that it is a fundamental human right. But more importantly, when unionization is easy, employers will no longer have such a strong pressure to bust unions, and the comparative advantage of staying union-free disappears. There are any number of big picture, fundamental reforms that progressive leadership could pursue–amending or abolishing the doctrine of at-will employment state-by-state, exactly as the right wing did with right-to-work; comprehensive reform of the Wagner Act; labor participation in corporate governance; funding for enforcement.
Here’s a start though: Democrats and their progressive enablers at think tanks could stop shrugging off every betrayal of workers’ rights–whether Striker Replacement, Employee Free Choice, or the creation of “free trade agreements” with nations that tolerate violence against union organizers.
I understand his point that unions can drive up costs (though this is a function of corporate governance as well), and that this puts union firms at a comparative disadvantage. But this takes as a given the difficulty of unionizing in the first place. The idea that unions need cartels to thrive, and with cartels we’d have no Rogue Ale, is simply not factual.