Unions are trying to make a comeback, but considering labor as we know it is rapidly coming to an end, it's probably best to consider collective responsibility versus collective bargaining
If there is one bastion of conservatism left in New York City its the borough of Staten Island. The southern most point of the city and state, its almost as if it's trying to flee for friendlier places like Florida, Georgia, and the Carolinas.
An odd collection of leafy suburbs, light urban commercial, woods, brooks, swamps, bogs, ponds, bridges, ferries and a single ribbon of commuter rail, it is also buffeted by mixed industry complexes on its New Jersey facing shoreline. It is here, among the car graveyards and recycling plants, that our story about a new type of recycling begins; the recycling of the "labor movement." For it is here at the JFK8 - Amazon Fulfillment Center that the "oppressed" workers of Amazon fought and won their right to organize into a union.
What the Amazon employees hope to accomplish with this unionization is unclear. Amazon employees are already paid higher than most other warehouse workers. They operate in an expanding company and seemingly have good job security, and now that they have unionized, they will have to start from scratch with regard to negotiating terms for a contract. This could potentially leave them worse off than when they started, especially when you consider the costs associated with being in a union. But this vote being made in a place ostensibly more right-wing than the rest of New York City, and also in a borough where there is still a large number of small, privately-held businesses, does give me pause. Why is it that in an era when industrial jobs have moved elsewhere, are we seeing an attempted renewal of the labor movement? And is it really a renewal or just a whimsical illusion?
According to JD SUPRA, the renewal does seem to be real. In a 19 APR 2022 piece entitled Employers Take Note! Labor’s Resurgence Could be Real this Time penned by associates at Franczek P.C. (a notable employment law firm) unique economic conditions and key initiatives at the National Labor Relations Board (NLRB), may be conspiring to make a perfect storm for the labor organizing movement. Specifically the piece points out: "For decades, companies such as Amazon and Starbucks have remained union-free. Many believe these companies have defeated organizing attempts because of their strong pay and benefit practices. However, like every other aspect of life, the pandemic changed how workers view and value their employment." I would go further; I would say that the long-standing social contract between employers and employees has been broken for a very long time, and the turmoil of the recent pandemic has only exacerbated a problem that has been brewing since at least the 1990s.
This disconnect was gradual and unfortunate, but in was in no way unplanned. With the strong push for free-markets in the 1990s starting with NAFTA, the quest for ever-cheaper labor to drive down ever-cheaper consumer good prices to fuel an ever-growing economy, had it's first and foremost effect on the former manufacturing employment pool. In an irony apropos to this essay, the unionization of the workforce was the main driver of its own demise. In a wonderful piece entitled Separating Truth From Myth in the So-Called ‘Golden Age’ of the Detroit Auto Industry (Smithsonian Magazine 09 MAY 2019) Daniel J. Clark explores the downfall of Detroit and the role unions played in that downfall. Despite the "worker's paradise" often described then (and romanticized now) the real plight of the unionized auto worker wasn't nearly so rosy. In addition to the obvious downside of wage employees loosing compensation during strikes, supply chain lay-offs were a real and persistent danger. If you are running an assembly line and one component or ten is missing, it has the same effect; down goes the line and furloughed go the employees. Unions could do little about this and in some cases, actually hurt supply lines which had a disproportionate effect upon their members versus the employers.
It is perhaps this disconnect between labor, markets and causality that undermines labor unions in the minds of most Americans. If the ostensible goal of a labor union is to improve a worker's condition, raising consumer prices, jeopardizing productivity, and threatening the competitiveness of the employer's product seems an odd way to go about it. It also encourages (intentionally or not) a further push for automation and reduced reliance on labor.
Stepping away from Amazon for a moment, Starbucks is a much better example of how unionization can potentially destroy a company and quickly. Starbucks has made a commodity (coffee) an expensive luxury item via experience marketing. People are willing to pay exorbitant sums to buy their coffee and the high mark-up has provided them with the means to be ubiquitous in their real estate presentation; Starbucks, so it seems, are everywhere. But at its heart, Starbucks is a coffee roaster and vulnerable. At some point, the cost of labor for baristas will raise their at-base commodity price to a point the market will no longer bear, and they will have no choice but to retreat from those markets where the real estate prices can no longer be justified by their dwindling profit margins. Into this breach many other experience-marketed, high-end coffee roasters will jump (and thrive) since they will be occupying retail space where local consumers are already accustomed to buying high-end coffee products.
Like Amazon though, I wonder what the Starbucks employees are trying to accomplish with their union, since they are already paid more than most other food service clerks. There takes a certain level of skill to produce a coffee drink, this I will concede, but how much will people be willing to pay for that skill in the next recession is anyone's guess, but if American cars in the 1970s and 80s are any example, not much. When cheaper foreign cars with more luxuries hit the American market in those decades, American car manufacturers and their unionized employees quickly learned they couldn't compete, and watched their market share plummet. Even when patriotism and union solidarity were evoked, it had little effect on the American consumer or its tastes. My money is that the same will happen to Starbucks and in short order, and this time the threat will come from a small competitor next door, not a foreign country.
However we choose to look at the situation, labor and management need a healthy symbiotic relationship for their mutual benefit, something that is sorely lacking in labor movements past, present and undoubtedly in the future. An antagonistic, classest approach not only stirs fears of communism, it alienates both consumers and employers, and encourages capital investments in automation. But this is not to say management is blameless either. Whereas labor can be looked at as the commodity that it is, and wage employment especially, since by its nature it is transient and tied to need; wise employers seek ways to enhance and retain employees beyond mere compensation. Companies that strive to have engaged employees, for an example, often do better with retention and productivity. According to a piece by Culture Amp entitled Increase employee engagement and retention, a Gallup study of 23,910 businesses found that businesses with engagement scores in the bottom quartile experienced an average of 31% - 51% more employee turnover than those in the top quartile.
But how to engage employees? In my former experience as an executive, I favored universal performance bonuses. Under this scheme, all employees at every level of the company were vested in making a bonus when certain goals were met, and these were not always exclusively sales goals. I once had a situation where our customer service representatives were sorely lacking in product knowledge, and then set about creating an intensive program based on improving this aspect of their engagement and our business. Incentivizing employees to stay and grow within the company requires creativity and good management, and generally speaking, if employees are doing poorly is is usually a failure of management not a failure of labor, whether that be because of hiring, training or periodic engagement. In an adversarial "us" versus "them" workplace, union or non-union, the ability to collaborate and innovate is severely curtailed, whether that's making widgets, brewing coffee or moving packages. Management working from a strictly top-down approach without the benefit of uploaded feedback, will not be seeing a happy and engaged workforce. It is very easy to bemoan failing employee work ethics, but what exactly has modern management done to mitigate these failings? The death by a million cuts of small and medium businesses, and the endless collectivization and agglomeration of mega-enterprises, sap engagement and offer in its place a lukewarm, saccharine policy brew that reeks of artifice and insincerity. Is it any wonder cynicism prevails in work environments such as these?
Of a necessity, the providers of capital will always have to retain the upper-hand when it comes to the use and management of those capital resources. Jacobean fantasies not withstanding, those who own property control its use and dispensation in a free society. But employees who feel they are ill-served and ill-engaged in their workplace, may do better to embrace capitalism rather than rejecting it, or at least, antagonizing it. If employees show a willingness to collectively contribute, they may find employers more willing to collectively reward. And if that doesn't work, they should go into business for themselves. Nothing cures persistent labor problems and perceived exploitation concerns faster than a rapidly growing entrepreneurial class. In the coming years, when transportation costs will undoubtedly rise due to carbon displacement and energy transition, and robotics will eliminate many current labor jobs, employees who are currently engaged in dying industries such as retail, might do best to pool their skills into locally owned and operated cooperatives. Hippie-esque as this may sound, it may be the best (if not only) game in town within a generation, for utilizing their customer service, point of sale and merchandising skills. The same could be send for trades-people of all types really; even utilities laborers.
Whether this latest surge of unionization succeeds or not, in the long-run, it will most likely run its course and vanish like all those that have come before it. Employees will always get the best deals when they are the best candidates for their jobs, and employers will always get the best value for their payrolls when they value their employees. Some movements may temporarily surf trends, but rarely do they supersede history.
Comments