Unions Holding Rochester Back?

In his controversial speech this week, Joe Klein fingered unions as one of the causes of Rochester's woes. Are unions really that bad, and how does an organization of employees hurt us? Let's do a brief recap of American unions.

During the 1800's and early 1900's employees as young as 5 worked 18 hours a day in conditions so horrendous that is was not uncommon to see bodies carried out of the jobsite with some regularity. If you were injured, you were fired and likely starved to death. By the 1970's labor unions had made tremendous contributions to America's working class and had won 8 hour work says, workers comp for injured employees, a minimum working age and numerous other worthy benefits. This rich history of fighting for the little guy was hijacked in the mid 19th century by the mafia. Corrupt union leaders and politicians realized the massive voting power of these labor groups. If you disagree I have two words: Jimmy Hoffa. Hoffa was a corrupt union leader whose mafia connections netted him a pair of cement shoes in the 70’s.

In the year 2006 we find the working world very transparent and employers are frequently honored for their working conditions. Employers who treat employees like crap can't keep good employees in this new fluid information age. Barriers to switching employers are almost nonexistent. Now unions seem to function primarily as voting blocks that politicians will sell their soul to win the support of, and as a tool to extort employers to the point of financial collapse. This is not to implicate that every union is corrupt or detrimental to business, but that it is a pervasive problem. One of my first encounters with a union employee was at the MCC automotive school in Henrietta. Much to my RIT College of Business colleagues’ amusement I elected to take a brakes and welding class. There I met a 25 year old guy we’ll call Steve.

Steve and I talked often about his job as a union employee at Delphi. Steve told me about the first few weeks on the job when the more senior employees demanded he slow down his productivity so as not to make the others look bad. His production in his first few weeks on the job far outpaced guys who had been there for years. On more than one occasion, while showing off his brand new red Corvette, Steve bragged about having only changed a few tires all day on the job. Needless to say, this pissed me off. I was paying $25,000 a year to get a degree that would land me a finance job that I drove to in a car that barely functioned. The job started at $28,000. Steve, 25 years old with no degree, was making $52,000 and shared with me that in short order he would be making nearly $90,000 as a journeyman. Clearly the union was working, employees were excellently represented. But then something happened. They priced themselves right out of a job.

A recent D&C article read, “Delphi Corp.'s bankruptcy could change the U.S. auto industry, experts say, ratcheting up pressure to produce cheaper parts overseas and forcing deep cuts in union wages and benefits and manufacturing employment. Delphi, the largest U.S. auto supplier, expects to close many of its 31 domestic plants as part of its reorganization.” The airlines are dominated by unions and are constantly going back to the taxpayer trough to get bailed out because they can’t make the business decisions needed to stay profitable. Soon GM will be in bankruptcy because of management’s blind allegiance to the internal combustion engine, inability to innovate, and the labor union’s crushing influence over tactical business decisions. UAW workers will scream about layoffs of their employees being paid $60,000+ to sit next to a robot and ensure it keeps chugging along, blind the real cause of their plight. To be sure I will investigate and discuss the platforms and impacts of our local labor organizations in future entries.