Are Unions A Force for Good in the U.S. Economy?
I took a summer break from the Fortt Knox newsletter, as I've tried to retool my schedule and find time for everything. In the process, I've decided to also share occasional dispatches from another project, my On the Other Hand newsletter.
As you might know, three years ago I designed and launched a weekly segment on CNBC's Squawk Box called On the Other Hand. The idea is, I take a controversial issue in business, argue one side of it for a minute, then I say, "On the other hand," and argue the complete opposite. It's more than a gimmick —?I believe debate is an effective format to educate people on issues, and researching the segment forces me to think deeply to construct strong but reasonable arguments on two sides.
The latest topic: unions.
As I'm coming off summer hiatus, I'm inviting you to join me for the weekly debate. Sign up now at CNBC.com/OTOH. Here's a sample of what you'll get:
Are Unions A Force for Good in the U.S. Economy?
The United Auto Workers could go on strike soon if they don't reach agreement on raises and benefits with Ford, GM and Stellantis. It comes in a year where unions from Detroit to Hollywood are seeing a resurgence in a tight jobs market. It raises the question: Are unions a force for good in the U.S. economy? Jon Fortt is here to weigh in.
JON:
“Not anymore. Unions right now threaten to derail the economy with some pretty extreme demands.
Don't get me wrong, unions have done a lot for America. They practically created the middle class, ended child labor, and standardized the five-day work week.
But today they're using a tight labor market to force concessions that could destroy auto companies in a few years when conditions normalize. Example: The United Auto Workers want a 40% raise over the next four years, and a return to defined benefit pensions and retiree medical benefits.
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What's the problem? Electric vehicles have fewer moving parts than traditional cars, and a lot of the more complicated assembly's likely to happen with non-union suppliers before the parts reach a union shop. So when the big three have to compete with non-union Tesla and overseas rivals in the EV market, bloated costs will kill their profits, tank their stocks and mothball auto plants again.
I'm not against wages going up. But it shouldn't happen in a way that hamstrings companies so they can't adapt in quickly shifting industries. When unions insist on unrealistic terms in the name of worker advocacy, they become a destructive force."
Does the union's opening offer have to be that reasonable? Isn't that what negotiations are for?
JON:
“On the other hand, a resurgence in unions is exactly what we need right now.
Without them, we've got an Animal Farm economy where the C-suite Napoleons take a bigger share of profits for themselves while the working class builds the windmill.
The auto workers union started negotiations at a 40% pay increase because that's what the CEOs have gotten in recent years. And they're pushing for pensions and retiree health plans because the American worker can't just roll over and accept a life of financial and medical insecurity in older age.
Unions have become especially important now because other major stakeholders have plenty of power. Celebrity CEOs anoint themselves corporate saviors, then collect millions even if they fail. Shareholders goose share prices by pressing companies to buy back stock or lay off workers. Workers meanwhile are stuck with wages that don't keep up with inflation, benefits that get worse by the year, and now the fresh threat of obsolescence from automation, and AI, and now electrification.
The unions won't get everything they want. They probably shouldn't. But the only way workers will get anything better in this era of avarice and algorithms is articulate some principles and stand by them."
Sign up to get On the Other Hand in your inbox weekly at CNBC.com/OTOH. And look out for the Fortt Knox newsletter, restarting after a summer break!
Temporarily retired
4 个月To me it does not look like there’s any negotiating it’s looking like nothing but demands
Temporarily retired
4 个月One of the reasons that I did not go into teaching at out of college was because I was forced to join a union to do so I don’t want somebody else negotiating my pay nor getting the same pay as people who are not working hard and don’t care of the way I do I would rather negotiate my own and get paid on my own performance not on the performance of everyone else in the same position or similar position I don’t think unions are necessary and I sometimes think they do more harm than good
Director | Critical Infrastructure/Renewable Energy
1 年Unions with real workers interests at heart and having shown themselves to be run by effective cohesive leadership, yes. Let's say instead of slavery, poor Europeans formed unions that included people of color as absolute brothers and sisters and what happens ? Everyone gets paid, no slavery, more prosperity and all for the low low cost of an ego or two literally. No one gets hurt. Subsequently the midle class would have been fuller and more sustainable. More poor Europeans and people of color would have become middle class or wealthy. Indentured servitude only serves one interest and that is not the greater good. There is always a better way and at the GCE it's at the core of our corporate culture. No one gets paid unless everyone gets paid.
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1 年Oh My goodness gracious. Let's do talk about unions. In history, they were necessary and perhaps at present they may be. But they have become a political machine forgetting the very fabric in which they were created. They were not created to away votes, hold businesses hostage nor impede upon essential services. They were some umpteen years ago created to help people that were overworked and commodities take care of their families and not die from what they did. Now, it's a beast and in my humble opinion, allow senior squakboxes to manipulate the very people they represent. That is a problem. People should be grateful for employment and benefits and should show up to work.
Experienced Case Manager with a strong commitment to advocating for the social and economic welfare of individuals and families. Proficient in managing high caseloads while maintaining high standards of care.
1 年Hmmm…intrigued