Thursday, January 3, 2008

Notable & Scabby: Scrap the Unions

"I think the aim of unions, in theory, is admirable. Especially given the working conditions that existed in America during the industrial revolution. But today they serve only to fatten the pockets of union leaders, raise prices, and destroy companies." Henry Gómez, "Voyeuristic Thrill," Babalú, January 3, 2008

Henry is a wellspring of unpleasant surprises. Is he seriously in favor of dismantling unions? During the Industrial Revolution, the robber barons' private armies and sometimes the U.S. Army itself or the local police massacred striking workers at the owner's bidding. Then, Henry admits, unions were "admirable" at least in theory. Now, they are not even palatable to him in theory.

In the 1950s, Cuba's unions were the freest in the world and the most powerful. They secured Cuban workers paid maternity leave 50 years before that notion even entered the American lexicon. They obtained for Cubans a 35-hour work week for which they were entitled to 40 hours compensation; paid vacations and a Christmas bonus amounting to a month's pay, the famous aguinaldo, or 13th month.

Castro's first act was to destroy the independent labor unions and eliminate all the rights which they had secured for the Cuban worker.

Does Henry envision a future democratic (?) Cuba without labor unions? Does he want American companies to exploit workers in Cuba as they do in Asia and elsewhere in Latin America? Does the mere notion of Americans enslaving his parents' countrymen fill him with a "voyeuristic thrill?"

Oh, Henry! What a frightening piece of work you are.


Mamey said...

Yikes! So early in 2008 and already Henry's at it? Just what kind of democracy does he envision for Cuba? Cubans fought hard for fair and progressive labor laws before the Castro dictatorship made mince meat out of them (both the laws and the workers). Henry appears to be like some of those poor U.S. American working stiffs (and saps) who go around wearing tee-shirts that say "Corporations are people too." Succesful and smart enterprises do not trample their workers--greedy capitalists and communists do.
P.S. Happy New Year Manuel.

nonee moose said...

Within the seeming extremism of Henry's position, he does have some valid points. Or shall we all deny less noble characteristics of unions and their entrenched leaders, all in favor of the memory of important achievements long past?

I am not a union-buster. Neither am I an avid supporter. They have had their key moment in history, and lest Santayana be correct, should have their place in the future secure. But please, not too big a place, for now.

Rene M. Grave de Peralta said...

...and destroy companies." — Henry Gómez

Hmmm, lets see. New York has been the most heavily unionized state since forever. IBM, American Express, Bristol Myers, Colgate-Palmolive, AOL, Alcoa, the list is too huge to continue. California is a heavily unionized state, Google, Chevron, Hewlett Packard, Intel, Safeway, Oracle, Levi-Strauss, again, the list is too monstrous to continue. Washington is also a heavily unionized state, Microsoft, Costco, Weyerhaeuser, Paccar, Boeing (oh that's right, they moved their HQ to Illinois---another heavily unionized state), Safeco, Starbucks and on and on.

Florida, on the other hand, is a "right to work" state, with between 5 and 9 percent unionization. Congratulations, you have Burger King and Checkers AND Hooters. Wow, impressive.

nonee moose said...

Rene, it sounds like you are referring to corporate headquarters. My 11-year-old daughter said that the relationship between the location of corporate headquarters and "union laws" is only slightly less than the relationship between scuba-diving and playing the trombone.

Me? I'm not so sure. I think playing the trombone could make you a better swimmer. That counts, right?

Rene M. Grave de Peralta said...

I'm not surprised your 11 year old daughter thinks that, but I am surprised you would quote her in your defense. All those companies were little companies at one time. Starbucks started in Seattle with one store in an office building and they had to hire baristas, janitors, etc. When Ray Kroc started McDonalds in San Bernadino, CA, he had to hire soda jerks and hamburger flippers. When William Boeing started Boeing in Seattle, he had to staff his factories with workers. The same goes for all the other great companies. They all had to expand their workforces to become as huge as they did. Even Henry Ford, the father of efficiency and cost cutting, paid his workers a generous wage, "so that they could afford to buy my cars". Not to mention so that they could afford to give their kids a good education, thus creating an educated worker pool, which everyone knows (well maybe not you and your 11 year old daughter) is a much bigger attraction to businesses that are serious about becoming world class than cheap labor. I just hope that when the great day comes, Cuba doesn't follow Florida's penny wise and pound foolish, low wage, low education policies.

nonee moose said...


You don't know my 11-year-old...

Perhaps you should run your posts by your 11-year-old, if you have one. Maybe he/she will decipher your point re F-500's having corporate HQ in NYC and the relevant levels of unionization in each. Are you suggesting that the unions somehow were responsible for a company's relative ability to locate HQ's near the seat of capital markets?

Tell me more. This is a theory I have not heard before, and it intrigues me. Maybe for your next trick you can solve the mystery of the missing squadron of PBYs that disappeared over the Triangle.

I'm not arguing the importance of humane treatment of the labor pool, mind you. I think on that we can agree. But the way you connect the dots...

Rene M. Grave de Peralta said...


Sadly, my 11 year olds are now in their 20s. They've turned out great, but I miss their younger versions.

Now be honest, do most companies place their HQs "near capital markets"? Obviously financial companies do, but were there any significant capital markets in Seattle when Boeing got started? In 1903, when Henry Ford launched his business, was Detroit a significant hub of capital markets? Is it today? Silicon Valley is a significant capital market these days only because the venture capital firms and investment bankers followed the tech companies that spin out of Standford there, not the other way around. I could run a huge list of examples, but this has nothing to do with what I said. My attack was on the notion that unions "destroy companies". All the red herrings you are raising have nothing to do with my point. Which is that unions are good for a state and/or country and in the long term even for most companies. Yes, there are times when they are detrimental to a particular company in a particular time period.

The impetus of my concern is that I don't want to see Cuba be a two or three trick pony when Democracy and capitalism finally return to the island. Sure, at first tourism, fruit and sugar agriculture and construction will be the lifeblood, but as rapidly as possible I'd like to see a strong middle class who educates their kids, who in turn create new companies and even new industries. It's near impossible to do that on minimum wage jobs and low investment on education.

Florida has sunshine and beaches and makes it's living off retirees that made their money elsewhere, snow birds and general tourism. With the exception of the financial hub and trade nexus with Latin America that the Cuban community built, Florida seems content with just collecting on it's natural resources like some banana republic and making little investment in it's people or in the diversification of it's economy.

nonee moose said...

If you're only point was to express concern over a future Cuba without labor safeguards, then why didn't you just say so? That's like motherhood and casquitos de guayaba. Instead, you created the implication that because more, or most, F-500's were located in New York rather than Florida, that fact somehow proved your point that the relative pro-labor environment was better in NY. That may be true, but your logic is flawed, which didn't leave you with much of a point.

You forgot Wal-Mart. They're not in NY either. Nevertheless, whether or not a future laborer gets exploited in a free Cuba will have absolutely nothing to do with whether Florida is a "right-to-work" state. And Henry's rather simple point fell victim to his Gekkoesque penchant for hyperbole. Do unions destroy companies? I think in a world as big and effed up as this one, the examples of that case would abound. Does that make the evils of unionization axiomatic? No. Does organized labor stand as an obstacle to rational economic behavior? Absolutely. Is there more to life than rational economic behavior? Yes. Unionization, in part, serves as a humanizing factor to such rational behavior. Taken in moderation, I see that as a positive.

But even too much guayaba can make you sick.

Rene M. Grave de Peralta said...

I'm starting to think there is little or no disagreement between us moose man. I love your statement "Is there more to life than rational economic behavior? Yes."

I am a capitalist all the way, but I see capitalism as a tool, a servant of society. I find it rather bewildering the way some people treat it as a religion.

My point was not just about F-500 companies, but very successful state economies in general. Take away Florida's beaches and sunshine, pick it up and put it in the mid-west and you have another Mississippi. "Right to work" is just a marketing term for union busting. Every time I read something about Florida, it is referred to as a "low wage state". According to the "religion", this should be attracting business and giving a competitive edge to Florida and yet, all the new and exciting business and even emerging industries are being created elsewhere.

For example, how is it that freaking New Jersey is leading the charge in solar power and the "Sunshine State" is never mentioned in articles about that industry? Solar is going to provide high paying jobs. How is it that Florida is never mentioned in articles about biofuels when sugar cane is a better source of ethanol than corn is? How is it that there is no biomed industry to speak of in Florida? Or software industry?

Because Florida does not invest in its people. This is reflected in its union policy, its tax policy, its education policy and its reliance on its natural resources to provide wealth for the few at the expense of the many.

Cuba, like Florida, needs to go beyond that if either is going to avoid a certain level of "banana republicness" (I just invented a word!) I love to see people get rich, become millionaires, but not by endlessly exploiting finite resources like oil and beaches which run out and degrade, but by creating new solutions to problems and improving lives with new products. Not by creating arcane financial products and usurious fees to squeeze the last drop out of the consumer, but by offering genuine value.

I don't know if this clarifies where I'm coming from. You may disagree with my diagnosis of Florida's ills and that is fine, I just want it to be a real disagreement and not a misunderstanding. Either way, thanks for the dialog, you seem to have a first rate mind and be well informed. I like to argue a lot, but my main (although I enjoy "winning" an argument as much as the next guy) motivation is to test my own beliefs and opinions, to see if they need revising or even overhauling.

nonee moose said...

No fundamental disagreement, Rene. I too enjoy the argument. If I may:

For example, how is it that freaking New Jersey is leading the charge in solar power and the "Sunshine State" is never mentioned in articles about that industry? Solar is going to provide high paying jobs. How is it that Florida is never mentioned in articles about biofuels when sugar cane is a better source of ethanol than corn is? How is it that there is no biomed industry to speak of in Florida? Or software industry?

Please tell me you don't buy the notion of letting marketing principles drive energy policy. Assume your assessment of the sum total of FL's natural resouces (beaches) is correct. Assume further that tourism is the killer application of our economy. Is there any other name that would work better as a brand than "Sunshine State"? Even if, statistically, the myth and the truth are not even in the same overpriced condo building? Solar energy production is a difficult sell here because it is not cost-effective here. Solar energy technology has not developed cost-efficient storage alternatives, and as I alluded to before, it ain't always sunny in FL. So the solar farms are, at best, part-time generators, and expensive ones at that. But it is getting better, both on the cost and tech side.

The sugar industry in FL is controlled by two very large concerns, which enjoy very healthy price supports, as long as the sugar is in the agricultural stream. The current incentives for ethanol, whatever they are, do not compare. That too could change.

Biotech? Scripps, Torrey Pines, Burnham, and the Max Planck Society are all on their way.

Software engineers are a little pasty. I don't think they like all the sunshine here...

We'll talk again.

Rene M. Grave de Peralta said...

I'll close this particular thread by just laughing out loud at; "Software engineers are a little pasty. I don't think they like all the sunshine here..."