Fools Sound Off on Unions

Last month, I penned an article on labor unions, wondering whether they do more good or harm. Not surprisingly, many Fools responded passionately, both for and against unions. As someone who is far from a labor expert, my plan all along was to elicit informed opinions from Fool readers and to share them in a follow-up article. This is that article. As I did before, I invite you to continue to share your thoughts on the matter, on our discussion boards (painless free trial available).

Without further ado...

In a long discussion on our boards (pop in and read more), MegMac100 said: "Unions promote mediocrity. It's the old weakest link thing. You're only as strong as your weakest link. Instead of the whole group getting stronger because of the harder more talented workers, the atmosphere sours because you can't weed out the less capable and so job performance/moral spirals down instead of up. It's a very depressing way to work. I can't imagine anyone wanting to work like that. I adore competition. It gives me a drive to be better at what I do and so I am constantly growing as a person. Life is not boring then. And I won't even get started on the entitlement attitudes unions breed. I have work to do."

~*~

HarveyIvory added: "I have been reading much of the 'propaganda' that [my wife's] teachers union sends home, especially around elections, and it scares me how self serving they are. If the measure favors the union and teachers or the union and students, then they are in favor. But if the union is in any way threatened, but the teachers or students or schools would benefit, they are against it."

~*~

VillagerFool said: "I believe that we would not have enjoyed the living standard that we have without unions. I don't think that historically there are many debates on that score. This brings us to today. Can we exist without unions now? My answer is a hearty NO! Why do many companies pay the wages that they do or provide the benefits that they give? My answer to that is to keep the unions out of their company. Eliminate unions and what incentive is there for companies to give their average worker decent wages and benefits?

"Sure there is a case for the management and technical employees to be paid well because of competition for them. Then again look at the outsourcing of these white-collar jobs overseas.

"Wal-Mart (NYSE: WMT  ) , Disney (NYSE: DIS  ) , and other similar companies depend on low wages and benefits so they can keep profits high and cost low. Take away the threat of unions and what do you think would happen?

"Look at IBM (NYSE: IBM  ) , which I use to work for. They never had any problems with unionizing threats. This was a family atmosphere where people worked hard for the company's benefit because they knew that the company would watch out for them. Twenty or twenty-five years ago the family atmosphere started eroding away. Many recently hired employees took advantage of the IBM culture to do as little as they could get away with. Some managers started building empires for themselves instead of doing what was best for IBM. The corporate culture was changing.

"This lead to Lou Gerstner being hired to cleanup the mess. This he did but along the way he destroyed the IBM culture. Now employees have little loyalty to the company because they know that they might not be there next month. The spirit of cooperation is gone. Everyone is looking out for themselves first, IBM second, and everyone else not at all. And guess what is happening? Some locations are unionizing.

"In my utopian world everyone would be unionized but the unions would be company-wide, not industry-wide. Each union would be competing against the other unions in their industry right alongside the companies for whom they represent their workers. What would be good for the unions would be good for the companies. The union couldn't prosper unless the company did as well."

~*~

EspressoSW added, regarding the current grocery workers' strike in California: "The sad fact is that in today's economy, most baggers, checkers, and stock clerks can be replaced all too easily, and rely on the modest bargaining power of their union to prevent a 'race to the bottom' (Wal-Mart wages). This union-free outcome of exploitation-level wages wherever possible would not only be bad for the workers and their families, but the resulting further hollowing-out of the middle class would be bad for the economy, as well. In these circumstances, I think we still need unions, much as I personally would prefer that we did not. As VillagerFool pointed out, often the best outcome occurs when there is no union, but employers have to do right by their people to avoid unionization."

~*~

Kobi1000 said: "We have unions because of the misuse of power of management. Ask your grandparents about what management did during the depression or about the use of children."

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Dadyer offered links to some thoughtful web pages, and quoted criticism by Charles Baird: "I have often wondered why many politicians, journalists, members of the clergy, playwrights, novelists, and far too many others hold labor unions in high regard. From an economist's perspective, they are merely labor cartels that exist mainly to restrict competition in labor markets. Moreover, they have a well-documented history of resorting to violence when they do not get what they want. While they have benefited some workers, they have done so at the expense of other workers and consumers, not capitalists and entrepreneurs."

~*~

AirplaneGuy101 chimed in, arguing that, "In the airline industry the unions are still needed, not so much for the wages or work rules but for... the public's safety... There is often a great deal of pressure from management to get the job done in a timely manner at any cost. A mechanic has to have the union backing in order to stand up and say 'Sorry, but it can't properly or legally be done that way' without being fired."

Dadyer questioned this reasoning, saying, "Considering the overall safety record of the airline industry throughout its existence, I find it hard to believe that philosophy [of risking expensive machinery and countless lives, not to mention lawsuits] exists now or has ever existed, unions notwithstanding. If anything, unions have made the price of tickets higher and less affordable."

Goofyhoofy joined the conversation, noting that, he used "to run a daily publication for the airline industry... and it was rare that a week went by when some maintenance outfit wasn't fined for stretching hours between service, running a plane with too many flags (problems noted), using grey market (non FAA-approved) parts, or something. Hard to believe, unless you also think about the history of the coal mines, where managers were ruthless about "getting the coal" at whatever cost, including risking cave-ins because they wouldn't buy enough timber to shore up the walls properly. Ditto the steel industry, the textile industry, and ditto a lot of industries until unions came along."

~*~

Ron517 pointed to the North American Free Trade Agreement (NAFTA) and General Agreement on Tariff and Trade (GATT), saying "Companies will continue to seek refuge not just from unionized labor payouts, but from 'all' workers, be they union or nonunion, who are subject to the shifting landscape of jobs leaving the continental United States to foreign lands that pay less wages!"

MegMac100 responded, saying, "I can't help but think the lives of those worker in less advantaged countries will start to improve. And they too will have to go through the cycle of needing unions (because they are necessary -- I'm not saying they aren't).... I'm torn because on the one hand I can see the immediate effects [of American jobs going overseas] but I'd love for all those billions of people out there to have the money to make their lives better, too, and as an investor I welcome them as buyers of some of the products my companies offer."

~*~

In another discussion thread, Bob91977 said, "But, generally, unions are great for workers who are unwilling or unable to negotiate their own wages, hours, and working conditions. They are also good at stifling industriousness and competition. And they are very good at lining the pockets of union bosses. They are not so good for the rest of us who wish to negotiate for ourselves. Maybe I don't want a 40-hour week. Maybe I want 30 or 50. Similarly with vacation, health insurance, and all the rest. All work-related 'benefits' come out of the same pot as salaries and wages. They're not a gift."

Tramagli chimed in with some very good points, as did a bunch of other thoughtful Fools. Drop by our board for this discussion to see what else was said, and to share your own opinions and experiences.

~*~

And finally, note that all the responses I received didn't appear on our boards. I also received some enlightening emails -- though of course I prefer to hear from readers on our boards, where others can also benefit from their words. In that spirit, and since I'm running out of room here, I've parked a recap of emails I received on our boards, in a post. People wrote in about AMR Corp.'s (NYSE: AMR  ) American Airlines, Southwest Airlines (NYSE: LUV  ) , Texas Instruments (NYSE: TXN  ) , UPS (NYSE: UPS  ) , and more. Click here to read more.

Selena Maranjian thought the sky was lovely last night. For more about Selena, viewher bioandher profile. You might also be interested in these books she has written or co-written:The Motley Fool Money GuideandThe Motley Fool Investment Guide for Teens. The Motley Fool isFools writing for Fools.


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