The above video has been making its way around libertarian circles regarding UPS’s attempts at getting the government to force FedEx to abide by more similar union agreements. As it stands now, since UPS relies more on ground and FedEx primarily on air, the former has much more stringent labor standards.

As I watched the video, I remember the UPS strike from several years back that threatened to derail our then-vibrant economy. It got me thinking about the position that businesses are in. Giving ground to the unions often results not in a better working atmosphere but instead in more contention down the line. I actually supported the UPS workers at the time because their demands seemed rather reasonable (and UPS was wanting to renegotiate in the opposite direction). But it’s worth noting that FedEx, despite generally conceding less to their workforce (as far as I know, correct me if I’m wrong) never had to contend with a strike.

What it makes me think most of, though, is sports. The most powerful players’ union in existence is the MLB union. They were pioneers in free agency and have managed to head off numerous attempts at salary caps and revenue sharing that would have made it difficult for big-bank teams to pay outrageous sums to players to stock up on talent. As far as athletes go, baseball players have it good. They’re less at risk for injury than other sports and (partially because of that but partially for other reasons) they have careers that last the longest and leave their athletes in the best physical condition.

My personal thoughts are on the matter are pretty straightforward: so long as the player is generating enough revenue to justify the salary, he has a right to ask for it. Teams colluding to keep salaries “manageable” is problematic. If the goal is league parity, you can accomplish that through revenue-sharing and by reserving a share of the profits to players. But keeping player salaries down to enhance profits is a problem when (much moreso in other industries) players generate them. Of course, it gets a bit stickier when the teams that pay these outrageous salaries then turn around to municipalities and say that they can’t afford to stay in town unless a new stadium is built, but that’s a decision for the municipalities to make.

Yet I find myself wholly unsympathetic to the players any and every time there is a strike. The reasons for this have little or nothing to do with baseball economics. Rather, it’s that the position of weakness that baseball programs are in is considered “lesson learned” for other sports. The lesson? Never, ever let your players union get any more powerful than it has to get. Don’t give in no matter how reasonable the demand and no matter what the public thinks. The result will not be more amiable relations between labor and management. Give them an inch, as the saying goes, they will take a mile.

A lot of studies have come out recently on the dangers posed to football players in the regular course of a season. Though they are well-padded, the result is that they use the pads to make hits that they wouldn’t dream of making without the pads. The result is that physical damage (including brain damage) is endemic. It’s all truly horrifying stuff.

Further, football careers tend to be very short. This is often because of self-induced retirement or being cut, but is often due to injury. Professional baseball and basketball players have an average career length of 5-6 years, but more importantly, when they get out they are not nearly as likely to have been as physically pounded as players in the NFL. It’ll be easier for them to find something else to do. And they’ll make more each year they play*.

I really don’t care all that much about basketball, but I definitely want football players to get more than they’re getting right now. It’s hard because a football team is so much larger than a baseball or basketball team, but I believe that there is a moral obligation there. But the constant backs-and-forths in Major League Baseball makes sure that will never, ever happen. They know that the more ground they give, the more that will be expected of them in the future and the more likely a strike is down the line.

As an issue of fairness, FedEx probably should be under whatever labor regime burdens UPS. However, it’s worth pointing out that FedEx rates among the top 50 companies in the country in employee satisfaction in 2008. UPS does not appear on the list in the article, though their mutual competitor DHL is bar-none the worst in the country. I wonder what labor agreement they operate under?

* – NFL players start with a minimum salary of less then $300k per year. The number is just under $400k for baseball players and is over $450k for basketball players. Each league has an increasing minimum depending on how many years you’ve been in the league.

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9 Responses to Union Inches, Union Miles

  1. web says:

    When basketball had its strike a few years ago, some gang member from one of the NBA’s boring, second-half “farm team” franchises (you know, the ones you probably never heard of, the ones that as likely as not failed to graduate from SoTech or a similar school prior to getting into the last 1/3 of the NBA draft) had the nerve to get on camera and proclaim how “a guy just can’t live on a quarter million a year, man!”

    I ceased having any sympathy for striking “professional athletes”, EVER, from that point onwards.

  2. john says:

    Excuse me if I don’t feel a lot of sympathy for people earning half a million dollars a year to play a game. The only real outrage in this situation are the laws that require them to play for free in college to earn their spot in the pro leagues. And at least in the NBA we’re seeing players who are finding ways to bypass these rules. Even without that, I doubt that NCAA athletes will find many shoulders to cry on. These are men who get free rides in college and also tend to be recruited, in ways we’d rather not specify, by the hottest 18-year-olds in the country. I think most of the SAT-acing, 4.5-GPA comp-sci majors would gladly trade place with them.

  3. trumwill says:

    I’m not as concerned about salary as I am about longevity and disability. Getting paid half a million dollars a year isn’t as good a deal if you get three years and end up in a wheelchair.

    Regardless of the complicity of the participants, business models that take young bodies up and then spit them out broken doesn’t sit right with me. Even if the athletes sometimes say stupid things on TV.

    That being said, the players’ union itself shoulders some of the blame. 20-something kids that think they’re invincible don’t necessarily know better, but the unions (which claim to represent the interests of the athletes) do know what the players are up against and have a better idea of what sorts of protections they need.

    They’re being well-paid, but they’re also being taken advantage of. My main concern here is football since that’s much less the case with baseball and basketball. I sort of feel the same way about professional wrestling, except that the WWE has much less regular cashflow in comparison to the NFL.

    The NCAA is, of course, worse about it. John, the reason that basketball players are making headway and the football players are not is that basketball doesn’t require that someone be three years out of high school. Maurice Clarett challenged the NFL on that a couple years ago, but he lost and it turned out to be a really bad deal for everyone involved. Clarett turned out to be an NFL dud, but I do think that he was right about that.

  4. Kirk says:

    I found that UPS video to be pretty dishonest. For example, the guy mentions how UPS’s “labor costs” are double FEDex’s. He does not call it what it is: salaries.

    As far as his term “individualized work and compensation,” this is just code for “giving all the money to the bosses.”

    As for unions losing ground over the past 60 years, I can’t see anyone saying that’s a good thing. Unless, of course, you’re against one-income families, and the middle-class.

  5. Will Truman says:

    Kirk,

    The most potent criticisms of unions are that they are antithetical to a flexible work force and that a flexible work force oftentimes benefits everybody. At Mindstorm, for example, they made everyone take a paycut. Had we been unionized, they may not have been able to do that. The result probably would have been layoffs. Or, if they couldn’t do that, deep financial trouble for the corporations.

    Unions are very beneficial when there is enough money to go around in order to make sure that the workers get their share. But when things turn south, they create problems with adaptation. So you run into situations like in Detroit when the contract terms were set during good times but now they can’t adapt and are having significant trouble with profitability. This doesn’t just hurt the shareholders, but the workers themselves and future workers who would be able to get jobs if these companies were more profitable.

    Of course, the downside is, as you point out, that employees can really get the shaft otherwise. Employers and individual employees are not on equal footing when it comes to negotiations. Without collective bargaining, it becomes extremely easy for employers to give employees the shaft to increase profits (rather than simply to become profitable). This may be good for the GDP, but for me there’s no purpose to a strong GDP if the benefits aren’t rolling significantly downward to working folks.

    Libertarians and conservatives often support anti-union measures on moral grounds (they inhibit economic freedom of contracts), though I think that’s mostly bunk. But economically speaking, inflexible job markets can be a real problem. So the official Trumwill position is, as with a lot of things, that these are priorities that need to be balanced (not just in regards to unions, but minimum wage law, benefits, and so on).

  6. Kirk says:

    Pardon my outburst, but I work in a plant where the management is outsourcing. They used to say “we’re outsourcing but won’t have a layoff,” but now that they’ve had a layoff they’ve started to just lie about the outsourcing. (I guess they figure we won’t buy the same lie twice.)

    They’re sending tooling and equipment out the door, and simply lying about it. With the big stuff (punch presses and the like) they’ve gotten creative, saying “that stuff is no longer in use”.

    Well, yeah, it’s no longer in use, as they sent out the dies months ago. Without the tooling, of course the press is useless.

    With the small stuff, they just lie. They say they’re not doing outsourcing, but they are. I see it every week.

    Anti-union arguments about “flexibility” are just more lies, as is that UPS video. We had to endure an anti-union speech at work, and it was every bit as transparent.

  7. ecco says:

    One issue about Fedex is that most of the people you think who work for fedex don’t actually work for Fedex. As an airline, fedex workers can’t unionize. So fedex workers can’t strike even if they wanted to like at UPS. I do tend to agree that unions aren’t flexible enough, but then again they’re likely not flexible enough due to bad management, although given the relative biases on this issue I doubt any conclusions will ever be reached. As an alternative, I would point to Germany as a model where trade unionism can work with a functioning business culture. I’m sure you can come up with valid personal reasons why you think it can’t or shouldn’t work in America, but they are valid systems that are working in other areas.

  8. trumwill says:

    Kirk,

    It’s not that I’m counting on the companies to be honest about their dealings. I don’t. But workplace flexibility is an important thing whether it’s the corporations or economists saying so. Further, unionization is something that can lead to outsourcing overseas. The alternative to paying people less is not necessarily paying them more.

  9. trumwill says:

    So fedex workers can’t strike even if they wanted to like at UPS.

    That was one of the main points of the video, that UPS is unionized because it’s primarily ground and FedEx is not as unionized because it is primarily air. I think that what UPS is trying to do is entirely valid in that they are at a competitive disadvantage as far as that goes. But I’m not sure that killing FedEx’s cow because UPS’s cow is dead is going to be all that helpful, in the end.

    What I would be interested in knowing is how different the wages are at each company. FedEx reports great employee satisfaction, though that could be because the unhappy people are ones that don’t actually work for FedEx. Out of curiosity, who doesn’t work for FedEx that I would think does?

    Then there’s DHL, which I assume would operate under the same labor agreement as UPS but has awful employee satisfaction numbers. Could be because DHL is struggling (I don’t know if they are or not) or because DHL outsources the less unpleasant jobs and so those remaining have the kind of mail-sorting positions where it’s hard to keep people enthusiastic.

    As an alternative, I would point to Germany as a model where trade unionism can work with a functioning business culture.

    I’m not sure why it hasn’t worked over here the same way it worked over there. I can’t remember how their models differ from ours except that I seem to recall that their unions tend to have stakes in the company. If that’s the case, hopefully our situation in Detroit will improve. Alternately, it could be because they can implement these policies on a more national scale whereas here union-friendly states tend to lose out to non-union friendly states. If Toyota in the south had the same constraints as does Detroit, would the result be a more competitive GMC or could be less cars being made in this country.

    These are things I genuinely do not know. I am probably skeptical of unions on the whole, but from more a pragmatic rather than ideological basis. I want the same things that unions want. If unions can really deliver that in the current economy, I’m completely on board with that. I don’t believe it protecting profits for the sake of protecting profits.

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