Thoughts on Management and Labor

Of the many pendulums (pendula?) about to swing the opposite direction is the balance of power between Management and Labor.

Many of those who voted Democrat in the most recent election did so primarily out of a belief that big corporations have become too powerful, to the point of abusing their workers in the name of free-market capitalism.

Fundamentally a conservative, I've paid close attention to this particular issue over the years. And the conclusions I've reached don't toe the party line for either side. Actually, I find myself agreeing with each side about 50 percent. If that makes me an economic moderate, maybe so.

Business executives are driven by the bottom line. They are mostly compensated on their ability to grow their companies and maximize profit. Therefore, if they can get the job done by implementing lower cost alternatives to the means of production, they will do so. Concern for individual worker welfare has no seat in today's board room.

In the 80's and 90's I was personally involved in displacing perhaps hundreds of clerical and data processing workers through installation of new systems that improved efficiency overnight. I remember one particular project I led in the 80's that replaced the old "batch" system for Accounts Payable with an efficient new interactive solution. Less than a week after the new system went "live", 80 percent of the Accounts Payable department were laid off.

I felt badly, as if I was personally responsible for each of those people losing their livelihood. But after awhile, I realized it was the price of progress. If the company failed to implement these new systems, they would fall behind the competition and eventually be forced out of business because they could no longer produce their products profitably.

The next stage happened in manufacturing, where US plants closed and relocated in third-world companies across the globe. Plants relocated to places like Mexico failed due to massive corruption that made it impossible to do business, and now the vast majority of manufactured products seem to come from the Far East. Especially Communist China.

These days the technology advances have slowed somewhat, with technological efficiencies less dramatic than in the 80's and 90's. But what we have seen in this decade is a move to replace the high-tech workers like myself with cheaper alternatives. India has become the new center for technology workers, as corporate America has dumped their high-salaried U.S. techs for Indians, saving as much as 70 or 75 percent.

The Bush Administration famously told us for the past 8 years that all this progress was good for us. Globalization and free trade ultimately lifts all boats.

I'm not sold. If China, which is an adversary of the United States politically, has succeeded in replacing the manufacturing sector of this country with their own, then what happens if we suddenly find our relations deteriorating? All of a sudden, we can't produce our own manufactured products or war materiel that might be needed to protect ourselves.

There's Free Trade and there's Fair Trade. Free Trade has meant unfettered trade, with little regard for the fact that China steals trade secrets, software, entertainment, and intellectual property from America with impunity. The Bush government cared not at all that China manipulated their currency to make sure nobody could compete with them on the price for their goods.

Many suspect that NAFTA is designed more for the benefit of Mexico and Canada than for the U.S. To the extent that may be true or not, I can't say. I do think the silliness of the hassles I get at the border when entering Canada to do my software consulting are sort of ridiculous - If I was entering Canada for a job, then absolutely I should be scrutinized. But entering for a few days to teach people how to use software developed in the US should not be at issue.

I could go on, but want to get down to the real issue of Management versus Labor.

The "Card Check" legislation being pushed in Washington on behalf of the Labor Unions is designed to tilt the balance of power away from corporate management toward labor unions in a return to the 70's. I remember those days, with the bad economy made worse by incessant union strikes. So many companies had to close simply because their Unions demanded too high a price to keep the companies solvent.

I worked in a Union shop in the 80's and was stunned at the gross inefficiencies embedded into the daily activities at the company because of union work rules. I have a funny story about getting the florescent light bulbs changed in my office (it took over a week), but will get to that later.

Don't get me wrong, I fundamentally have no issue with the idea that employees can form a union for the purpose of negotiating fair pay, benefits, and working conditions with their employer.

But I do object to the business-killing effect of unions that become so powerful that they can practically dictate those terms to the employer. And I object to the pervasive corruption inherent in the Union bosses. Want to put yourself in danger of physical violence? As a member of a union, just ask the union boss for a financial statement showing how the members' dues are spent.

Management hates unions, understandably. I've been in the room to hear executives proclaim that they will close the company before they will allow a union to get in. I've been privy to unceremonious firing of employees based on no more than a rumor that they might have been overheard discussing unionization with a co-worker in the break room.

I had a friend back in the 70's and early 80's who told me that if he could just get into a certain Union, he could land a job that would pay double his current rate and be secure for life (that turned out to be wrong). But to get into the union, he had to know the right people. Because, to get on that gravy train, you had to be brought in by a friend or relative. The union was the gatekeeper to those high-paying jobs with amazing benefits.

There's the problem. Give either side too much power, and they're probably going to abuse it. If Management and Labor were both always fair-minded, honest, and ethical, there would be no problem.

Hmm, back to that morality theme again. What was that about all our societal problems sharing the same root?