The Proof of the Pudding

In a piece from his newsletter published in the New York Times David Leonhardt explains why he’s “rooting for the G. M. strikers”:

“Successful strikes beget more strikes,” Steven Greenhouse, the longtime labor reporter, writes in today’s Times. The reverse is true, as well: Failures by labor unions — and the workers they represent — lead to more failures.

For this reason, the current strike by almost 50,000 General Motors workers matters well beyond the auto industry.

Organized labor is in the midst of a modest winning streak right now. Teachers in at least seven states have staged walkouts. Last year, Marriott workers went on strike, as did other hotel workers in Chicago and health care workers in California. Many of these job actions led to pay increases, as employers decided that they would rather increase wages than continue to deal with the chaos and costs of walkouts and strikes.

A high-profile successful strike by one group of workers, in turn, encourages other workers to take the risk. “When, say, teachers in Oklahoma see their West Virginia colleagues walking out and winning substantial pay increases, there is a contagion effect,” as Jake Rosenfeld, a professor at Washington University in St. Louis, has said. “They start to believe, ‘Hey, we can do that, too.’”

Over most of the past 40 years, of course, the dynamic has been working in the opposite direction. President Ronald Reagan famously fired striking air traffic controllers in 1981, which encouraged companies to play hardball with their own workers. As more companies did so — refusing to grant raises and firing strikers — workers became afraid and disillusioned.

For years, the United Automobile Workers union — the one that went on strike this week — has been suffering from this kind of vicious cycle.

Some of its problems have been self-inflicted, including corruption. U.A.W. leaders have recently been the subject of a corruption investigation, in which a few have been convicted of accepting bribes. In some cases, they took the bribes from employers in exchange for accepting concessions during contract talks. When the U.A.W. narrowly lost an election to unionize workers at a Volkswagen plant in Tennessee this year, some workers said — understandably — that they voted against it because they were skeptical the union would really fight for their interests.

The G.M. strike is in part an effort by the union to halt this cycle of defeat. By calling the strike, the union’s remaining leaders are trying to demonstrate a new willingness to fight for their members. “A successful strike at General Motors could persuade U.A.W. members that the union is willing to take significant risks to fight on behalf of its members, potentially opening the door to more organizing in the anti-union South, where many auto plants have migrated,” Mike Elk wrote in The American Prospect yesterday.

The striking workers are asking for a pay increase and for the reopening of idled plants, among other things, and they are arguing that G.M. is now profitable enough (having earned $8.1 billion last year) to afford both. Given the wage stagnation that most workers have suffered in recent decades — and the larger import of the G.M. strike — I’m rooting for the workers to win a better deal.

I’m also rooting for the U.A.W. to solve its corruption problem and make sure its leaders are looking out for the workers rather than themselves.

I will reserve judgment but the hypothetical I would pose to Mr. Leonhardt is, what if the strike is a failure? What if it results in even more market share lost by GM? Over the last couple of decades GM has gone from the biggest car company in the world to one smaller than VW, Toyota, Daimler, or Ford.

There are major differences between the auto industry and the service sector. The U. S. automakers are in competition with every auto manufacturer in the world and GM’s workers are already less productive than their counterparts in Germany, Japan, or South Korea. Much if not all of that is due to increased automation, i.e. investment by the manufacturers. You can’t outsource having your meals carried to your table in a restaurant or your bed made offshore.

If a successful strike encourages other workers to strike to seek higher wages, won’t an unsuccessful strike discourage them?

As I say I am reserving judgment but I’m concerned that Mr. Leonhardt has watched Norma Rae one too many times. Is the reason for income inequality in the United States that workers have not been given their due by management or that so much of their compensation comes in the form of subsidized health care? To what degree is the decrease in unionization the cause of increasing income inequality and to what degree is it due to unions not providing much value to their members? How much has the adversarial relationship between unions and management, very different from the situation in, say, Japan been a contributing factor to union’s decline?

4 comments… add one
  • Guarneri Link

    There is nothing wrong with union workers negotiating the best deal they can for themselves. And vice versa.

    What appears to be lost in the debate are issues you raise. Most simply, are there other dominating exogenous factors (like health care costs) and overplaying their hand. I’m content to let the parties sort it out. (Unlike the inherently flawed pubic workers setting). But no tears down the road, please. And if I were rank and file, I’d be wary the leadership.

    As for Mr Leonhardt, he appears to have achieved his highest and best use as a cheerleader.

  • bob sykes Link

    As long as we have a free trade policy, such strikes can achieve only short term successes. Free trade and open borders (its siamese twin) drive prices and wages to the world average. I believe the world average per caput income is under $10,000 per year.

  • steve Link

    Let them go at it. If the unions overplay their hands, they lose jobs.

    “What if it results in even more market share lost by GM? Over the last couple of decades GM has gone from the biggest car company in the world to one smaller than VW, Toyota, Daimler, or Ford.”

    And that is without striking. Bad management, poor products. I can certainly empathize with workers figuring that they dont have so much to lose since they weren’t doing well with no strikes. I assume they know, it is hard to find, how much their pay has been increasing, if it has.


  • I’m not at all sympathetic with GM. I’ve been highly critical of its management here.

    I’m worried about the UAW rank and file. The goose may be laying tin eggs rather than golden ones but killing it will get you no eggs at all.

Leave a Comment