It’s Chaos on the Shop Floor!

26 11 2012

For all but the smallest or most specialized of employers, a single employee’s refusal to work has a minimal effect. For all but a comparatively small portion of the workforce, an employer’s dismissal of an employee is devastating. These baldly true propositions underlie the basic, original organization of modern American labor policy.

I use the phrase “labor policy” because there isn’t a good term in popular use for what I’m trying to talk about. That belies a phenomenon we’ve noticed particularly over the last handful of years: increasing (visible) fissures on the political left between “neoliberals” or “left-neoliberals” and traditional progressives. That is, when labor or class issues crop up–Occupy, collective bargaining in Wisconsin, the Chicago teachers’ strike, the Hostess strike and bankruptcy, the Wal-Mart job actions–the former tend to be reflexively skeptical, the latter reflexively supportive, of the “labor position.”
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The Chicago Model Fallout Revisited: Catharsis, Context and Circumstance

15 09 2012

The Chicago Teachers’ Union strike was not unpredictable, nor was it sudden, nor was it over merely details, free of context, that are the subjects of the collective bargaining negotiations.

Since at least 1995, but particularly since 2004, Chicago’s students and teachers have borne the pain of experimentation, like lab mice in an education policy laboratory. That context is important, and it is inextricably linked to the nature of the strike and the source of its support among teachers, parents, students, the public–most everyone it seems, except journalists and powerful politicians.
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A Long Time Comin’: Chicago Teachers Strike Authorization Vote Begins Today

6 06 2012

cross-posted from Gapers Block

Beginning today, over 20,000 Chicago teachers will vote on whether or not to authorize their bargaining committee to call for a strike should negotiations with the Board of Education over new contract terms fail. For authorization, 75% of non-retiree union members would need to approve. This high threshold is the result of legislation passed last year. As state public employees, teachers’ collective bargaining rights and terms are governed by state, rather than federal, law.

The legislation in question, known as SB7, was passed after intense and stealth lobbying efforts by Stand for Children, a well-funded non-profit that operates at the state level to encourage entrepreneurial changes to public education that incrementally privatize school systems. Stand for Children co-founder Jonah Edelman famously bragged at a conference that they used access to important and influential political figures like Rahm Emanuel and Michael Madigan, and insiders like Jo Anderson to tighten restrictions on the Chicago Teachers Union. Part of the strategy was to take away one of the union’s more potent tools, the strike threat. Unable to take away the right to a work stoppage, Stand settled for a 75% approval threshold.

Now, it is looking like Stand’s strategy might backfire, if teachers ultimately vote to authorize a strike. After all, the question teachers will vote on is whether to authorize a strike, not whether to go on strike. Arguably, winning an authorization vote by 50%+1 would not be a real show of strength. A significant portion of teachers would have expressed their opposition to a strike, and maintaining the strike, once called, would be exceedingly difficult. The organizational capacity teachers build by being forced to get over 75% means a resilient strike, should things come to that, and a battle-tempered organization prepared to push hard during negotiations.

Besides the mechanics of it, there are the underlying social conditions that are bringing this to a head.
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Labor’s Need for Surpluses

24 08 2011

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.





Can We Just Agree to Disagree?

26 04 2011

Thank you, minority associate, for writing up this stockphoto modeling contract.


Contracts have to be the answer. Nobody leaves a contract perfectly satisfied, but they’ve come to some agreement over their disagreement and walked away better off. If the goal is the most free and equitable human society, then contracts must be a primary medium in which it is accomplished.

Contract law is such a relief. Maybe because it’s a newish area of law, and so just feels more intuitive. Property law struggles under the weight of its feudal and confusing post-feudal roots, and so is full of terms of art (“enfoeffment” “covenant of seisin” “the rule against perpetuities”) and complex, non-intuitive rules. Torts deals with civil wrongs often not based on specific statutes and with extremely flexible or ambiguous rules (when is someone negligent? What constitutes a battery?). Criminal law of course is really ultimately based on social morals and mores. So, where once any felony got you a trip to the…I don’t know, head peeler–back in the day, now there are about seven levels of criminal homicide (murder in the first, second and third degree; manslaughter–both “heat of passion” voluntary manslaughter and involuntary manslaughter, which can be reckless or negligent).

Or this thing.


Contract law, though, is straightforward. Not that it isn’t complex, because it is, but rather its complexity is elegant. While facts can complicate just about anything, the rules in general make sense because all disputes ultimately lead back to one question: should the state enforce this promise?

Everything else is left to the individuals or organizations for themselves to decide. So long as the contract isn’t for something illegal (thus why bookies break legs but payday lenders garnish your wages) or made under fraud or duress (Cf., Johnny Fontane‘s personal service contract), the courts just try to figure out what people promised to one another and whether it’d be just to enforce those promises.

In theory, contracts can’t be literally one-sided. Part of the formula to determine whether a promise has been made at all is the doctrine of consideration, which basically means you can’t have a contract unless both parties are giving something up. Both parties also have to agree free of duress or fraud, meaning they were voluntarily giving something up. As far as human interactions go, this is pretty swell.

There’s even a rule that contracts that are egregiously one-sided should not be enforced. Yay!

At the same time, getting a contract is an adversarial process. Both sides are trying to get the best deal they can. Neither side gets everything, but they get something–they always end up in a better position than when they started. Nevertheless, there are two competing interests that must come to voluntary solution. So while negotiations can be competitive, even rough, their resolution must be satisfactory to some degree.

Its this simple fact that draws me to the labor movement as a solution for structural social inequality. Because while collective bargaining agreements don’t leave everybody perfectly satisfied, everybody is nevertheless still ahead–and got to their position through their own voluntary actions.

If the program of the left is to make sure people have truly equal opportunity for material security, it seems backward to wait until wealth has accumulated and then use the power of the state to force them to share it. Why not just take out the obstacles to ideal negotiation and let wealth be distributed by private parties by mutual agreement?

Libertarians believe that anti-trust legislation is unnecessary because individuals will naturally defect from the cartel to seek the advantage of offering a lower price. (The assumption being that monopolies will artificially maintain high prices). Thus their token support for collective bargaining in theory but opposition to it in practice: because unions can enforce a monopoly in a specific workplace, they bar individuals from defecting from the “cartel” to seek a comparative advantage. In practice, collective bargaining is probably impossible without that power.

Empirical proof of the instability of monopolies under natural conditions.


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Is There a Leftist Case Against the State?

6 08 2010

I feel the tension between liberals and the Left. Being on the political Left in the US puts you in uncomfortable position because the national conversation is extremely narrow, and liberals focused on day-to-day governance are pinched from both sides. Those on the broader Left–the “International Left”–come across as contrarians or as puritanical. Petty liberals–those who, broadly speaking, hew to the center-left line of the Democratic Party, embodied by the Brookings Institute, the Center for Budget and Policy Priorities, and public intellectuals like Matt Yglesias or Robert Reich, and politicians like Barack Obama and, formerly, Ted Kennedy–bristle as much at criticisms from the Left as they do to criticisms from the American right wing, and often are more defensive against those criticisms as they see them as coming from an attitude of “purity” or Utopianism.

Before getting to the problems with statism, it is useful to define what I mean by “liberals” and “the Left”.

It is hard to define terms in this debate, because the political spectrum is essentially fluid and the absence of ideological parties with specific manifestos confound categorization. In general terms, the petty liberal left is redistributionist and mildly statist; petty liberals don’t dispute that the foundations of American society are essentially just; rather, they seek to use extant institutions to address distributive problems.
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