The Nexus Of Unions And Politics

Senator Jim DeMint touched on the nexus of unions and politics today during a conference call dealing with EFCA. Hot Air has a report on the call here.

Now look at some details inside this NY Times item just linked by Instapundit - watch the money, your money, go 'round.

With more than 1.8 million members nationwide, it is the largest union in Illinois, was an early and generous backer of his gubernatorial ambitions and received some important favors from him (Blagojevich). In 2005, the governor issued an executive order that enabled the service employees to unionize 49,000 in-home child care providers who were paid through state and federal funds.

Afterward, the service employees negotiated a 39-month contract that raised the child-care providers daily rates by 35 percent on average and provided them with health coverage.

What Blagojevich and the SEIU did together in this case didn't just cost you much more money for the very same services as a taxpayer, it also created a cash flow for the union, part of which then gets pumped back into re-electing, in this case, an incredibly corrupt politician.

Back to Hot Air: audio of the call here.

DeMint noted that the states doing poorly are mostly those with closed-shop rules and heavy unionization. It makes them less competitive and less attractive for investment.

True, but the politicians there do pretty well, especially given union support.

I didn't get a chance to ask a question during the brief call. What I wanted to bring up that I think needs to be addressed is how the GOP can both develop a positive message on this issue and also put forward some approach that does have serious appeal to the working class.

You can't win with simply a union bashing, embrace freedom message when the headlines like to tout select CEOs that make millions and some reliable workers go arguably underpaid and without health care.

I don't have an answer. It was a question I wanted to pose. But I think the GOP is going to have to find some way to address it if economic concerns are going to drive elections for the foreseeable future.

Comments

[IslamoLlama]

How dare you bash on the religious right, Dan. They use that government-supplied faith based initiatives money to help people.

Oh, oh, oh. You said "unions". I read "churches". My bad. :-p

"-- DeMint noted that the states doing poorly are mostly those with closed-shop rules and heavy unionization. It makes them less competitive and less attractive for investment. --"

DeMint makes a rather interesting generalization there. Unionization reduces competition and makes investments less attractive. And yet...

"-- In the retail world, labor costs in 2005 for partially unionized retailer Costco were 40 percent higher than Sam's Club, but Costco produced almost double the operating profit per hourly employee in the United States—$21,805 per employee versus $11,615 per employee. --"

http://www.americanprogress.org/issues/2008/12/efca_brief.html

More here: http://stage.hbsp.harvard.edu/hbsp/hbr/articles/article.jsp?ml_action=get-article&articleID=F0612D&ml_issueid=null&ml_subscriber=true&pageNumber=1&_requestid=7139

"-- Costco’s practices are clearly more expensive, but they have an offsetting cost-containment effect: Turnover is unusually low, at 17% overall and just 6% after one year’s employment. In contrast, turnover at Wal-Mart is 44% a year’close to the industry average. In skilled and semi-skilled jobs, the fully loaded cost of replacing a worker who leaves (excluding lost productivity) is typically 1.5 to 2.5 times the worker’s annual salary. To be conservative, let’s assume that the total cost of replacing an hourly employee at Costco or Sam’s Club is only 60% of his or her annual salary. If a Costco employee quits, the cost of replacing him or her is therefore $21,216. If a Sam’s Club employee leaves, the cost is $12,617. At first glance, it may seem that the low-wage approach at Sam’s Club would result in lower turnover costs. But if its turnover rate is the same as Wal-Mart’s, Sam’s Club loses more than twice as many people as Costco does: 44% versus 17%. By this calculation, the total annual cost to Costco of employee churn is $244 million, whereas the total annual cost to Sam’s Club is $612 million. That’s $5,274 per Sam’s Club employee, versus $3,628 per Costco employee. --"

Oops. Looks like unioned labor, better pay, and the resulting lower turnover is actually better business in the long run.

And right-to-work states have lower average salaries than their counterparts: http://www.aflcio.org/issues/legislativealert/stateissues/work/

"-- The average worker in a right to work state makes about $5,333 a year less than workers in other states ($35,500 compared with $30,167). Weekly wages are $72 greater in free-bargaining states than in right to work states ($621 versus $549). Working families in states without right to work laws have higher wages and benefit from healthier tax bases that improve their quality of life. --"

As for the bit about corruption, you don't seem to have a problem with "unions" nearly as much as you do with "individuals or organizations with large sums of money capable of corrupting sitting politicians". There's nothing magical about unions, union fundraisers, union lobbyists, and union politicial machines that separate them from their corporate counterparts. Yet you single out unions specifically. Funny that.

Indeed, Blagojevich was angling for a corporate seat for his wife as a bribe when the FBI busted him. Yet Dan doesn't seem to have a problem with the existence of corporate boards or politicians and their immediate family profiting from the membership there of. Certainly, we haven't heard a diatribe against Evan Bayh's wife who makes over $800k off of corporate board memberships. Funny that, too.

http://www.usnews.com/blogs/the-ticker/2008/12/9/fbi-blagojevich-wanted-corporate-board-bribe.html?s_cid=rss:the-ticker:fbi-blagojevich-wanted-corporate-board-bribe

[Fred Beloit]

Oh the agony, the hardship, the danger to those workers with no union protection. This courageous man must watch warriors do the fighting and then write about it. I feel his pain.
http://www.mediabistro.com/tvnewser/cnn/ware_i_dont_know_how_to_come_home_103118.asp?c=rss

Wait a second. This guy must be a union member. It is the law, I think.

[Anon]

I agree that you have to look at a lot of factors beyond salary to figure out what is really a cost effective strategy as the Cosco example shows...turnover is a big hidden cost that few companies address, easier to go for the basic cheap salary bottom line and not worry about the hidden costs of retraining,etc. Though not sure what his has to do with unions.

I find the AFLCIO's data very suspect, if I had to guess I would guess that the right to work states have generally lower costs of living and lower mean salaries to begin with, so they are trying to put forther a correlation that probably doesn't exist.

Unions have played an important role in protecting workers, but they failed to modernize, have failed to put forth any ideas of their own in terms of U.S. competitiveness and have mostly for the last 20 years been playing defense and obstructing solutions that might have done some good.

[LOL]

it's actually the Right to Work states (i.e. very little union presence) that are doing the worst. These states have some of the highest unemployment levels, lowest per capita incomes, lowest life expectancies, and lowest education levels. Some of this is perhaps skewed by the fucked up shitholes such as Mississippi and Alabama, but it is interesting the think about. States with high level of union membership are actually doing well, and--interesting fact--often pay more in taxes than they take from the government.

[LOL]

A good example is Boeing, the largest EXPORTER in the united states. It is closed-shop. Doesn't really seem to fit your mold does it wingnuts?

[Fred Beloit]

LOL, you are not a liar, I'm sure you just forgot to give us the links to back up your claims. I'll be awaiting them. May be interesting. Go to a union site. They will be glad to help you. Their members have provided them, willingly or not, with a lot of money to spend on "information".

[IslamoLlama]

"-- it's actually the Right to Work states (i.e. very little union presence) that are doing the worst. These states have some of the highest unemployment levels, lowest per capita incomes, lowest life expectancies, and lowest education levels. --"

To be fair, the financial sector certainly didn't have any unions in it, and they're doing just fine.

Oh... wait. Nevermind.

[syn]

"States with high level of union membership are actually doing well, and--interesting fact--often pay more in taxes than they take from the government."

California, New York, Michigan, Ohio are doing well?

If true, why then are these states at or near bankruptcy and are in dire need of bailouts?

I live in the Big Apple, I see 15 Bway shows already going down.....lots of union memberships (acquired predominately through nepotism) are going to be out of work for quite some time.

My problem with unions, they're never FAIR and like all plutocratic bureaucracies, by the time the union bosses pay themselves off for doing union boss work there is never any money left for the very people they promise to provide and protect.

[Anon]

It is this kind of ultra simplistic 'analysis' that killed this country. Unions want more unions so abracadabra and the reason why 'right to work' states have lower per capita earnings and higher unemployment is because of the right to work laws. Gee, that was easy. Forget about any kind of holistic look at the state, nope, it must be the right to work laws.

Doesn't anyone ever get tired of specious logic that supports their position whatever it is, irrespective of the facts?

[Lala]

Are there any union truckers anymore? Remember when they were all union and Hoffa would threaten to stop everything moving? Now, they seem to be all independent operators, what happened?

Aside from carpenters (very corrupt union) and electricians in New York, it seems that all the union people are in the public sector or in low paid jobs like cashiers in supermarkets.

New York City is canceling an upcoming Fire Dept class and is closing some firehouses at night. But more traffic enforcement officers are being hired (ticket tax). The subway fare may go to 3 dollars and tolls will be instituted on intercity bridges. Upstate New York has been in the pits for years, Hillary promised a revival but nothing happened.

[Lala]

Boeing

Besides the strike, which shut down Boeing's commercial aircraft plants and cost the company an estimated $100 million daily in deferred revenue, the replacement of certain fasteners on early production aircraft also contributed to the delay, Boeing said.

http://www.newsvine.com/_news/2008/12/11/2202133-boeing-again-delays-787-test-flight-delivery

[WBestPresidentEver]

UNIONS are nothing but a bunch of thieves, liars and scumbags. They have ruined America. The only reason they even exist is because of the democratic party. They charge all these folks DUES for their so called services and then DONATE like hell to the democratic party. Party of corrupt, liars and thieves.
The republican party has had its share of wrong doing but the democratic party is overwhelming with their evil deeds and acts.
Republicans are still and always will be the better party !!

[mark l.]

Illinois 5th congressional district...

dan rostenkowski, rod blagojevich, and rahm emmanuel.

what a 'three-fer'.

[Peg C.]

Well, it's still a free country and we are free to boycott whom we want. This family is herewith boycotting the Big 3 in favor of non-union carmakers. We've owned cars by all 3 within the last 3 years (Jeep, Corvette and Mustang) and we are done. We're German and Japanese now. Let the autoworkers go to work for them. The unions destroyed the Big 3 in collusion with the UAW and Congress - mainly due to Democrats voting the way they do and controlling the states they do. Pity.

[Peg C.]

Sorry, meant the unions destroyed the Big 3 in collusion with Big 3 management and Congress. When I say Congress, I mean the graft artists, the know-nothing mediocrities, the environmental wackjobs and the anti-business Marxists. Strangely, most of the above are Democrats.