Saturday, December 13, 2008

uaw or walmart

My father had to deal with union workers at his plants and whenever he would come home during or after the negotiations he would be alternately pale or red, exhausted and short tempered. When I was a little older, he started talking and this is basically what he said, " we have guys who haven't done a thing for 20 years making $30 an hour (this is 1980). They don't show up to work, they file for workman's comp if they catch a cold, they cost us a fortune and we can't fire them or the union will shut us down. We can barely make a profit, and the guy who hasn't showed up for work this year has taken home more pay than me." The reason we hate unions is the same reason we hate welfare, there are enough slackers and losers who are gaming the system to corrupt , or at least make it appear as if the whole system is compromised. We don't really object to union workers making a living wage do we? $22 million was paid in executive compensation to the CEO at Ford in 2007 when the company posted a $2.7 billion dollar loss. Ford's CEO earned the equivalent of 354 senior union workers. What really gets our goats is the imbalance - whether it is a guy making $60,000 a year for not showing up to work, or $22 million for riding his company into bankruptcy.

We hate welfare, we hate unions. We resent food stamps, we don't want to offer bail outs. We fear that taking steps towards social responsibility is the path to installing Stalin in the White House. And yet, we still cling to the ideal that fair play and hard work can and should be rewarded.

Time has come for some serious rethinking on our compensation philosophies and weirdly enough the model that is most intriguing right now is professional sports. There formulas for dividing compensation by class - workers and managers have created asset pools that are allocated or divided based on performance. Creative thinking is what is needed if we want to do real problem solving for labor unions and to address the tenure system in our education system. If the goal is to have an optimally productive work force, then that workforce has to be invested in the success of the company. A system that fosters investment in the company by workers, would necessarily require investment in the workers by the company.

This interlocking of interests is so basic and fundamental it compeletely escapes me why more unions are not taking it up as a model. Part of the reason is that the screaming is so loud at the negotiating table, no one can think clearly. And the other is that most labor unions have for far too long followed ridiculously incompetent leadership. Not ill-intentioned, but hopelessly over their heads when it comes to matching up with the talent on the management side. And so workers are represented by tacticians who are sometimes honest, but who rely on stupid and ugly. In this time of the resurgence of appreciation for smart and nimble, maybe its time the unions, following the model of the NBA, NFL and MLB get themselves some union leadership smart enough to sit at the same table as corporate management.

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