Friday, June 17, 2005

More on unions

As promised, unions and globalization.

The Economist points out that unions tend to decrease the number of jobs offered, making a country with strong unions less competitive than those with weaker unions. It is by this logic that Kansas has laws which do not grant unions the right to represent every worker in a shop. By weakening unions, the legislature hoped to attract industry.

I've discussed this with economist friends, and I think there's another angle that can't be ignored.

Yes, unions increase the cost of labor, which may decrease employment. It also will make it harder to hire and fire employees, which introduces inefficiencies into the labor market. Those are fair points, and I see no need to deny them.

I think that society is better off for having unions. I like weekends, I like 40 hour weeks, and I like overtime when you have to work longer. I've worked 80 hour weeks as a carpenter, and everyone pretty quickly started talking about what was involved in organizing a shop.

The problem isn't that unions cost jobs. So does a minimum wage, worker safety, Social Security, child labor laws, etc. The question is whether the loss of economic efficiency is worth the benefits to society. I don't know anyone who would say that America hasn't benefitted from the expanded middle class that came with the growth in union power.

So where's the beef?

As I noted yesterday, the older unions are the ones in the fastest decline. The steelworkers, miners, textile workers, auto workers, and the rest of the manufacturing unions are declining because their factories are closing and moving to areas where unions don't exist, and where worker safety, minimum wages, and childhood are not protected.

Because they see how free trade and globalization are allowing their jobs to go overseas, these unions, and the AFL-CIO in general, tend to oppose free trade agreements.

I think that's foolish, though there's an important kernel of logic there. As long as jobs can chase from unionized nation to nonunion nation and abandon commitments to workers along the way, there's no hope for American union labor. Even if you put massive punitive tariffs in place, it would still be cheaper for Walmart to buy cheap Chinese underwear than to pay union labor in America to sew them.

So fighting globalization is a strategy that can't save American jobs or American unions.

The solution is to use things like the WTO, NAFTA, and CAFTA to export American values. Labor should pledge to support CAFTA if it allows a mechanism by which union and workers' rights will be protected. If we export strong union rights throughout South and Central America, and export our unions to those countries, it makes labor stronger, and it levels the playing field.

If unions make economies a tiny bit less efficient, it's only a problem if some nations accept those costs and the concomitant benefits and others don't. So let's use our economic power to enforce our values.

As a nation, we value honest pay for an honest day's work. We value the opportunity to rest on the weekend and in the evening. We value a child's opportunity to go to school, rather than being forced to work.

If we're going to run a ghastly trade deficit, we should get to dictate some of the rules.

Here's how I'd enforce this. An treaty member commits to a series of labor (and environmental) standards. If their standards don't reach the level offered by a trading partner, the partner may impose a tariff that incorporates the true costs of the product if it were manufactured by the standards current in the importing country.

Two countries without labor laws would have completely open borders, but borders between the US and a nation without strong labor laws would only be semi-permeable. Unions or other stakeholders in the importing nation could sue to demand those tariffs.

Rather than opposing free trade, unions should see trade as an opportunity to broaden their base across borders.