excerpt:
What happened? The same thing that happened to workers across this great land of ours: competition from machines and competition from abroad. GM now has robots doing a lot of the work that used to be done by hand. It also faces a lot more competition than it did in those happy days when the Big Three automakers had virtually total control over the U.S. market. The company that once sold half of all the cars on American roads now commands less than 20 percent of the domestic market.
Organizing a quasi-cartel like the mid-century automakers is a very different project from organizing a company that competes with companies from all over the world. When you're dealing with a cartel, it's easy to make big wage demands, because the companies can just pass those demands on to consumers, either by raising the price or taking some quality out of the product. If the consumers don't like it, well, they can walk. But when you open up that market to competition, consumers have another choice: They can buy a product that isn't produced by your union. Your company loses market share, your members lose jobs.
In a competitive market, the price is the price is the price. You can rail against it, you can jawbone people about it, you can complain that it should be otherwise. What you cannot do is change it. If you try to force the price above the market-clearing level, you can do so only by sacrificing sales. GM managed to hide that fact from itself for a while, because it lowered the quality of its cars rather than raise the sticker number. That let it run things out a while longer, though at the price of eroding its brand. When the market figured out that the cars weren't as good, the price became the price again, and its market share fell accordingly.
Ironically, the International Longshore and Warehouse Union is a beneficiary of the same forces that are killing unions everywhere else: Its workers are the folks who unload the stuff that comes in from abroad. Those workers are sitting right at the bottleneck through which all that foreign competition flows to the U.S., and due to some smart planning by the union in earlier decades -- such as insisting that the West Coast ports would bargain as a bloc so that they can't play different locals against each other -- they can cork that bottle anytime they want. That gives them the ability to extract a little tariff on all that trade. Their rake-off is a tiny fraction of the overall flows, but that still translates into substantial sums for the few thousand workers who are holding onto that cork. The more trade, the better the concessions the ILWU is able to extract -- and the worse workers in other unions do.
Where Have All Our Wages Gone?
What happened? The same thing that happened to workers across this great land of ours: competition from machines and competition from abroad. GM now has robots doing a lot of the work that used to be done by hand. It also faces a lot more competition than it did in those happy days when the Big Three automakers had virtually total control over the U.S. market. The company that once sold half of all the cars on American roads now commands less than 20 percent of the domestic market.
Organizing a quasi-cartel like the mid-century automakers is a very different project from organizing a company that competes with companies from all over the world. When you're dealing with a cartel, it's easy to make big wage demands, because the companies can just pass those demands on to consumers, either by raising the price or taking some quality out of the product. If the consumers don't like it, well, they can walk. But when you open up that market to competition, consumers have another choice: They can buy a product that isn't produced by your union. Your company loses market share, your members lose jobs.
In a competitive market, the price is the price is the price. You can rail against it, you can jawbone people about it, you can complain that it should be otherwise. What you cannot do is change it. If you try to force the price above the market-clearing level, you can do so only by sacrificing sales. GM managed to hide that fact from itself for a while, because it lowered the quality of its cars rather than raise the sticker number. That let it run things out a while longer, though at the price of eroding its brand. When the market figured out that the cars weren't as good, the price became the price again, and its market share fell accordingly.
Ironically, the International Longshore and Warehouse Union is a beneficiary of the same forces that are killing unions everywhere else: Its workers are the folks who unload the stuff that comes in from abroad. Those workers are sitting right at the bottleneck through which all that foreign competition flows to the U.S., and due to some smart planning by the union in earlier decades -- such as insisting that the West Coast ports would bargain as a bloc so that they can't play different locals against each other -- they can cork that bottle anytime they want. That gives them the ability to extract a little tariff on all that trade. Their rake-off is a tiny fraction of the overall flows, but that still translates into substantial sums for the few thousand workers who are holding onto that cork. The more trade, the better the concessions the ILWU is able to extract -- and the worse workers in other unions do.
Where Have All Our Wages Gone?
