Competition between unions

Suppose you were a believer in the benefits of canoes. You want as many Canadians as possible to own a canoe. You would presumably want to encourage competition between different canoe manufacturers, so they would compete on price and quality, so that price would be lower and/or quality would be higher, so that more Canadians would want to own a canoe.

Suppose you were a believer in the benefits of unions. You want as many Canadians as possible to belong to a union. You would presumably want to encourage competition between different unions, so they would compete on price and quality [update, to make the analogy clear: of the services unions provide to their members], so that price would be lower and/or quality would be higher, so that more Canadians would want to belong to a union.

Labour economics is not my area. I do not know the laws on competition between unions. I do not know the rationale for those laws.

A close friend of mine works for a federal government department. A few years ago she and her colleagues were dissatisfied with their union. They believed that some other unions would offer a better quality service at a lower price. They wanted to switch to a different union. She said this was impossible to do directly. Instead they would have to decertify their current union, be without a union temporarily, and then invite a new union to represent them. They did eventually decertify their union, but it was a long and difficult process. They are currently without a union. They voted to postpone the decision to join a new union.

Two (sets of) questions:

1. Is it always hard to switch unions? Is this only true in the public sector? Do workers switch unions often? What are the laws that discourage unions competing with each other to represent a group of workers?

2. Why are there those laws that make it harder for workers to switch from one union to another, and discourage competion between unions?

Canoe manufacturers might want to restrict competition between themselves to increase their own profits. But those who want as many Canadians as possible to own a canoe would want to promote competition between canoe manufacturers.

This post has been brought to you by the Canadian content provision of WCI, in a hopeless attempt to offset all the news about public sector unions coming out of the US.

Comments

[Jciconsult]

Of course, the bigger issue is that there is no competition in the public sector. The union is in a monopoly position with respect to dues from its workers but also in a monopoly position with respect to the effect of the strike threat on the taxpayer. This is particularly an issue with the unionization of local government where services really affect the broad taxpayer.

[Sergei]

Unions are not in the business of making money. The analogy is not between canoes and unions but say between presidents and unions. Is it hard to switch presidents? Is it only true for a president of the country? etc.

[david]

1. Depends on your country's particular solution to the problem of industrial action. Remember that the goal is to mitigate any disruptive industrial action at all, even if this means shoring up organizations that extract rent but could pledge credibly for or against industrial action, particularly toward IA which is minimally destructive (forewarned walkouts instead of work-to-rule, plant occupation, etc.).

2. To make coordinated agreements credible even if a significant minority of workers could be persuaded (through selective benefits, etc.) to disagree. If those workers could declare their own union easily, then their former union has much less power to threaten or conversely make promises to the employer it is negotiating with.

Modelling a union as providing services to its workers is a little dubious, but let's take it for granted. Then observe that a very effective individual union is also incentivized to stage wildcat strikes or much more destructive actions against the employer, which would render it much more threatening and therefore powerful for a smaller group of higher-stakes but necessary workers. You would therefore want labour activity to be less effective on average by forcing more workers into the umbrella, until ideally the whole country's non-management workforce is under a labour congress that can act as residual claimant and any externality from labour action is fully internalized.

[Nick Rowe]

Sergei: "Unions are not in the business of making money."

We might need to ask whether that hypothesis works.

Canoe manufacturers are primarily in the business of making money (though some seems to be really keen on the benefits of canoes as well). I can understand why canoe manufacturers might want to discourage competition between themselves.

If unions were primarily in the business of making money (though some might be keen on the benefits of unions as well), I could understand why unions might want to discourage competition between themselves.

[K]

You're not being serious, of course. People want canoe company competition so we can have lots of cheap, high quality canoes. Change company to union and canoe to labour and it's pretty clear why union supporters aren't in favour of more unions.

[david]

Note that wildcat strikes (industrial action taken in defiance of your own union) is illegal in Canada, the US, and generally across the developed world, even though obviously the striking workers want the industrial action on an individual basis.

But of course disposing of your canoe for another canoe on a whim is not illegal.

[Nick Rowe]

david: Interesting point. Suppose you are right about one group of unionised workers imposing negative externalities on other groups of unionised workers with a different union. So, as you say, the solution would be One Big Union. You don't want lots of little unions. It is not obvious to me how laws that discourage competition between unions reduce the number of unions. Lack of competition might prevent stronger unions driving weaker unions out of the market.

Jci: yep, but I want to just look at the narrower point here.

[Nick Rowe]

K: "Change company to union and canoe to labour and it's pretty clear why union supporters aren't in favour of more unions."

You missed the analogy. We don't change "canoe" to "labour". We change "canoe" to "services provided by a union to its members".

[david]

Competition drives in favour of lots of little unions, not One Big Union, which is the socially optimal but non-competitive outcome. The competitive outcome is to ignore negative externalities and fragment. That is why presently existing unions would oppose any further merger (because they would lose in 'reverse fragmentation'), and why presently existing members of those unions would support even further fragmentation opposed by their union organization (which is why wildcat strikes have to be made illegal).

[david]

On the little unions vs. big unions thing, it is instructive to observe the craft unionism vs. industrial unionism dispute in the US, which highlights the problem pretty well. The craft unions deeply resented the formation of the National Labor Relations Board, pushed by the big unions and the US Chamber of Commerce, which restricted the kinds of IA very heavily.

[Nick Rowe]

david: "Competition drives in favour of lots of little unions, not One Big Union,..."

That is still not obvious to me. If there are negative externalities, wouldn't the incentive be for mergers? And wouldn't the optimal policy if you wanted to reduce the number of unions be to prevent entry of new unions, rather than restrict competition between existing unions, which seems to make exit of less successful unions less likely?

[K]

Nick: "You missed the analogy."

No, I totally got it. But you ignore the fact that to the extent that a union is a monopoly supplier of labour (see e.g. the Quebec construction industry) wages can be jacked through the roof and quality can be ignored. If Quebeckers could hire construction companies based on the union membership of their workers, they'd get more competitive pricing. And wages would fall.

[Donald A. Coffin]

I really think we're talking about a quasi-public good here. For a union to represent its members (customers) effectively, it needs some monopoly power vis-a-vis the employer. So it is not practical to have multiple unions representing sub-sets of the same group of workers. This also means that, in practice, shifting from one union to another will be difficult. It will require that a majority of workers be dissatisfied with their representation *and* agree on which new union they want as their representative. I see no way to make this as easy as (for example) changing what brand of cereal you eat for breakfast.

[Frances Woolley]

Nick, I think your question has different answers in different contexts.

In a high skill job like your friend's, what an employer would ideally likely to do is increase the salaries of all mobile and competent employees, and decrease the salaries of all immobile and/or incompetent employees. Unions prevent the employer from doing that - they force the employer to increase the salaries of all workers in order to retain the mobile and competent ones.

Clearly the mobile competent workers would prefer to move to a different union, one that said 'we'll work with the employer to reward excellence.'

Why might this be a problem? Perhaps it's not. Here's one argument that says it is: suppose, ex ante, one has no idea whether or not one will be a competent and mobile employee. In this case, ex ante, one might prefer to be part of a union, as it would insure one against the risk of incompetence, or being unable to move because of family or other obligations. Ex post, however, you know whether or not you're mobile and competent. If you're lucky, and are revealed to be competent, you'd like to tear up your insurance contract. But that's not the way that insurance works!

[Nick Rowe]

Donald: I agree that decisions made by a group of people are harder than those made by an individual. Voting paradoxes, the order of items in the agenda, etc. But committees still seem to function and make decisions despite these problems. And that doesn't seem to be a good reason to make it even harder for a group of people to decide on what union they want.

[Nick Rowe]

Frances: I think there are two questions: how you allocate individual workers into groups of workers, where all individual in the same group must be represented by the same union because they will bargain collectively; and which union will represent them. I was thinking about the second question. AFAIK, one union will often represent several groups of workers, doing a separate collective bargain for each group. I think there are several unions across the public sector, each with multiple groups. But it's hard for a group of workers to collectively switch from having one union represent them to a different union.

[Frances Woolley]

Nick: "I was thinking about the second question."

As was I. The point still remains: ex ante, risk averse workers will opt for a union that offers insurance. Ex post, when people's types have been revealed, high quality workers will want a "reward excellence" type union, low quality workers will want a "protect the worker" type union. This is one reason why it is hard for workers to collectively switch: they have different interests.

In our friend's case, the bargaining unit was comprised mostly of high quality workers - including our friend! - which is why they were able to agree on the process.

[Jim Rootham]

Talk about missing the point.

Unions are not fee for service organizations. They are political representative organizations.

If your friend was unhappy about what the union was doing, why didn't they run for office?

[david]

david: "Competition drives in favour of lots of little unions, not One Big Union,..."

That is still not obvious to me. If there are negative externalities, wouldn't the incentive be for mergers? And wouldn't the optimal policy if you wanted to reduce the number of unions be to prevent entry of new unions, rather than restrict competition between existing unions, which seems to make exit of less successful unions less likely?

No - this isn't a firm, unions don't own their membership rolls. You should be looking at non-cooperative equilibria rather than cooperative contractual ones, no Coase here.

Classical firms are monolithic entities; unions are not. Merger does not mean unity of interest. Imagine if bits of a firm could independently decide to jump off at any moment regardless of any contractual constraints and you get the gist of the problem. If you want to make it rigorous, pick your favorite mechanism-design-under-limited-information impossibility result. Notice that what real-life legal restrictions we impose on industrial activity are on what you can possibly do if you leave anyway. What large unions that exist are the result of legal protection of their institutional powers; otherwise they would become much smaller and much more violent.

As for optimal policy - well, yes. Actually you would go the Singapore route and merge everyone into one union by force, or less oppressively, go the German route and allow large unions to negotiate agreements legally binding on everyone in the industry's workforce regardless of whether or not they are in the union. Notice that in such situations it becomes plausible, and indeed practiced, to ask labour as a group to accept downward nominal wage adjustment during recessions (for example), so even demand externalities can be internalized.

But absent such benevolent social-policy making, policy is the result of what entrenched parties want, and entrenched unions don't want to become much bigger or smaller. They don't gain or lose if another industry forms a union, they wouldn't want to merge there anyway. They only lose if their own members start fragmenting off. Entrenched employer groups that negotiate with these unions share pretty much the same interest. So you get policy that reflects these desires.

[Nick Rowe]

Jim: "Talk about missing the point.

Unions are not fee for service organizations. They are political representative organizations."

1. I wonder how most workers see them? When a group of workers joins a union that acts for many groups of workers, are the workers not hoping that the union can provide them with a better service than they could provide themselves, and be worth the fees they will need to pay to cover the costs of running the union?

2. But that's exactly the point. If unions were fee for service organisations, I could easily understand why unions would want to restrict competition between themselves. If instead they are political representative organisations, why don't they compete to represent workers, like political parties do?

"If your friend was unhappy about what the union was doing, why didn't they run for office?"

There's a book called "Exit, Voice, and Loyalty", which I ought to read sometime. But the short answer is: because other unions looked better than what they thought they could achieve by trying to change their existing union. Just like sometimes we vote to change the party in power rather than running for office in the party in power.

[Determinant]

Union Raiding, that is changing the affiliation of a local from one union to another (at the behest of the union being joined) is proscribed by large labour organizations like the Canadian Labour Congress. The CAW did it a few years ago to the Service Employees International Union and got boycotted for it.

Further, locals bargain their own contracts, larger contracts are bargained only if necessary. For instance in the Public Service of Canada and at GM locals bargain local issues, national committees only bargain national issues like benefits and layoff clauses.

Since locals are democratic, they reflect their member's interests the majority of the time. The local democratic process kicks in long before a representation election has to be considered.

Further, I'll wager your friend worked at the Canadian Nuclear Safety Commission. I was considering a job there and Union websites are a good source of information about a prospective employer. The PIPSC website says that the CNSC was organized by them only three years ago after the dissolution of the previous in-house staff union (seen to be ineffective). It was the first certification of a new workplace in the federal Public Service in 30 years.

Lastly, unions bargain a single contract, the point of a union is not to runs company, but to represent workers and ensure that contracts are favourable. That means that most of the time you won't want to change things. Continuous competition over contract negotiation wrt the employer holding the contract is counter-productive in that regard. Such a situation opens up the possibility of an employer getting a favourable union against employees wishes. So unions exclude that possibility and use the democratic process to represent members views exclusively.

[Frances Woolley]

Nick, could you change risk neutral to risk averse in my last comment, please?

[Done. Yep, it makes sense now! NR]

[Nick Rowe]

Determinant: "Union Raiding, that is changing the affiliation of a local from one union to another (at the behest of the union being joined) is proscribed by large labour organizations like the Canadian Labour Congress. The CAW did it a few years ago to the Service Employees International Union and got boycotted for it."

Aha! That's an important pair of facts I didn't know.

[Determinant]

Further, your original post equated unions with private-sector firms. Unions are not firms as firms only interact with their customers via contracts and money. Unions interact with their members via the democratic process. Unless a firm is a co-op, it doesn't have anything like the democratic process for customers or employees, that is reserved for shareholders and management.

Second, "competition" between unions often led to "shop unions", unions in the pocket of the employer holding the contract and which were negligent, useless or abusive to union members. Raiding, representation elections and competition was the avenue for shop unions. Union raiding was suppressed in order to exclude the influence of employers in labour unions.

[Nick Rowe]

Determinant:

Canoe manufacturers compete for my dollars; political parties compete for my vote. In both cases I hope that competition improves my best option, even though I could also try to get a job building canoes or working within a political party if I were the very engaged type in either canoe building or politics, and thought I could do better by improving things from within. (Most canoeists, voters, and unionised workers, aren't that engaged).

Why did competition between unions lead to unions that were (in your view) bad for workers? Why doesn't (or does it?) competition between political parties lead to government that is bad for voters? Don't (didn't?) workers vote on what union to join?

[Robillard]

This has been an interesting discussion. I wonder if there has been any economic examination of student unions, particularly in light of the Quebec post-secondary education strife.

[Nick Rowe]

Robillard: a quick search on the HESA blog (I read their stuff almost daily, and it's usually very good) gives me this post. and this. And this.

[Determinant]

Because unions aren't firms. They do not exit primarily in a supply/demand framework over prices, they exist in a power framework; their reason to exist is to equalize the power imbalance between an employer and employees. Unions are not service providers, they are expressions of solidarity. You can use the services of a union without joining a union, that is the legal basis of the Rand Formula.

If you posit the union as a service provider, an entity independent of workers, you have a three-sided relationship between union, employer and workers. The union may be aligned with employees but it may also be aligned with the employer against employees. Such a case existed in the 1800's with "shop unions" which were pliant to employer's demands and neglectful to downright exploitative of workers. Employers used their inherent position of power to favour unions which reflected their interests rather than that of their employees. It's an attractive outcome for an employer so it was common enough in the late 1800's.

Union solidarity means that a union can only represent workers and workers only. It is not and must never be an independent actor but an expression of worker's needs, desires and intent. It has no agenda other than that of its members. It is not an independent entity but a vehicle its members use to achieve their ends.

More practically contract bargaining means there is a significant fixed cost in union representation, a new union cannot rip up the existing contract and start again, it has to wait until the old one expires. It's far, far easier to elect a competing slate of directors from the floor at the annual meeting, that is to effect change from within. This is what happens in practice if a particular bargaining team prove themselves to be chumps.

[Seamus Hogan]

Nick,

It depends on why you think unions are good. If the benefits of unions are to reduce transactions costs of having each worker negotiate an employment contract that found an efficient balance between monetary remuneration and work conditions, and provide effective insurance against legal bills should a dispute arise, then competition between unions for members is a good thing for delivering that service. If, however, the benefit of unions is that they enable insiders to extract monopoly rent at the expense of outsiders, then the benefit of the union depends its being monopoly. If you like the idea of letting a competitive market rather than bargaining power set the overall utility payment to workers, but having efficient contracting over how that payment is divided between wages and work conditions, with competition between unions for the right to underatke that contracting, then welcome to New Zealand labour law, at least as an approximation.

[Determinant]

Now you've set him off.

What if you view unions as a counterweight against excessive employer market power?

Union competition may lead to better bargaining, but it can also lead to labour arbitrage by employers against employees, which is why it was rejected in most places.

[Edeast]

I think clac is the fastest growing canadian union, and they are getting flak from other unions because they actually provide good services. By that I mean they have reps who show up. Not some political bloodsuckers. Fighting the clc, In the ituc. http://www.clac.ca/pages/ituc-and-clacs-international-affiliation

[Nick Rowe]

Determinant: "The union may be aligned with employees but it may also be aligned with the employer against employees."

You have missed the third possibility, which is what is at issue here. The union may represent its own interests (i.e. the interests of those who are employed by the union), and not the interests of the workers who it nominally represents. The union might charge its members high fees/dues, and provide useless service, because it is acting in the interest of those who are employed by the union, rather than its members. In effect, the union has a monopoly over its own members, and can charge whatever fees it wants and provide whatever service it wants, because those members can't leave (even collectively) to switch to another union.

Suppose I were forced to buy one canoe per year from my existing manufacturer, at any price it wanted, at any quality it wanted, and couldn't switch to a competitor, and would have to go through a lengthy difficult process to decertify my canoe manufacturer.

That is my friend's complaint. She says she and her colleagues were paying more than double the dues a competing union would have charged, for worse service (she said it was worse than useless). And it was very difficult to be able to do anything about it. I asked her why they didn't try running for office and reforming the union from within. She told me that those of her colleagues who had tried to do just that were the ones who afterwards decided they wanted to switch unions.

Seamus: "If, however, the benefit of unions is that they enable insiders to extract monopoly rent at the expense of outsiders, then the benefit of the union depends its being monopoly."

I think that misses one aspect: who are those "insiders"? Are they the members of the union? Or are they those who work for the union itself?

[W. Peden]

Determinant,

"Since locals are democratic, they reflect their member's interests the majority of the time."

Member's or members'? For once, the apostrophe makes a difference: if a union is democratic, then it represents the will of the plurality (or potentially the majority) which is a different matter from representing the will of each individual member, which is the level of decision making we're talking about when we're talking about switching unions.

Imagine a state-granted monopoly oil corporation called Megacorp. Does that corporation represent its shareholders' interests? Sure, as a plurality. However, if there were multiple oil corporations, then shareholders could move to another oil corporation if they were dissatisfied with the running of Megacorp. Most of us would be keen on moving to such a multiplicity of power. Why are most of us so in favour of concentrations of power (power of the majority over the minority workers) in the case of unions?

[W. Peden]

Nick Rowe,

"I think that misses one aspect: who are those "insiders"? Are they the members of the union? Or are they those who work for the union itself?"

Or the plurality/majority of voting members over everyone else in the union.

[Andrew L]

Nick,

Interesting. There is some competition between unions in the UK. There are 4-5 teachers' unions, for example, catering to different needs.

I wonder whether it is worth drawing on the "Law and Economics" literature here. That literature is massive, but one aspect is that the corporation is seen as a forum for competing interests, all trying to maximise their share of the benefits of their rights to the flow of profits/benefits coming out of the corporation. So it is about power (legal rights, informal and formal agreements). In that fight for maximising benefits for employees, bigger unions are likely to be better, in that they will have greater power to make agreements.

So, in your example, if there was significant competition between unions, perhaps they would all end up deciding that the best way for them to achieve their goal was to group together (collective action), so it might end up looking like one union anyway.

Should union members prefer to be part of bigger unions? In this logic, yes. But there is a fair amount of asymmetric information here, inertia in decision-making and also other competing parties have a chance to undermine unions (e.g. Thatcher in the UK in the 1980s, when unions had become too politically powerful).

You're right that Hirschman's 1970 book Exit, Voice and Loyalty is important here. Your initial assumption is that exit is the way to keep a union honest (as Hirschman points out, it's a standard assumption by economists that exit is more powerful than voice). But it's not the only way to influence organisations. Unions achieve their ends through "voice", so perhaps the goal is to maximise that voice, and exit would undermine it...? Or something like that.

Interesting. I may post more when I've thought about it more.

thanks,
Andrew.

[Nick Rowe]

W Peden: "Or the plurality/majority of voting members over everyone else in the union."

Yep, but I think that's a problem for any sort of collective decisionmaking. I don't think competition between unions over which union will represent a given group of workers (bargaining unit? local?) can resolve that problem. I'm thinking more of competition resolving the pricipal-agent problem, between the group of workers as principal and the union as their agent.

Andrew: "There is some competition between unions in the UK. There are 4-5 teachers' unions, for example, catering to different needs."

But can a group of teachers (do they bargain by county or by school?) exit one union and switch to a different union? If not, and they are stuck with whatever union they have now, there isn't really competition between unions, even if there are 4-5 different unions.

[Andrew L]

No, there is competition. Different teachers within the same school can be members of different unions. The National Union of Teachers is the most famously militant union, the NASUWT is the largest nationally, there is the ATL etc. The UK public services has national pay-bargaining (a situation which the Conservatives are currently trying to change).

I remember my mum (now retired) used to be a member of a less militant union (NASUWT perhaps?) and when the NUT was doing a half-day strike, all the NUT members used to pack up and leave everyone else working. She would never join the NUT, it was too militant.

I suppose that's an example of exactly the type of union competition you're thinking of.

The UK civil service has at least two major unions, PCS and Unison, and you have a choice of which to join, or none.

Back pre-Thatcher, it was very different. There were "closed shop" rules, which mandated that all employees in an organisation had to join one union, this gave unions much more power. I think the EU bans closed shops now.

In all of this, I wouldn't forget that exit/"market competition" is only one way to solve the "principal agent" problem. Reputation, personal pride, public service, internal checks are other ways to solve the problem, and sometimes (often?) these methods work better than financial incentives (external incentives crowd out "intrinsic motivation"). Even Richard Posner of the Chicago school wrote a good article on this in the Journal of Institutional Economics in 2010, recognising that mainstream economic theory had underplayed other ways of overcoming principal-agent problems.

Interesting, though - thanks.

[Nick Rowe]

Andrew: wow! That means there is competition at the level of the individual worker. I was just thinking of competition at the level of the group of workers (the local? the bargaining unit?), which doesn't seem to really exist in Canada.

[Determinant]

Member's or members'? For once, the apostrophe makes a difference: if a union is democratic, then it represents the will of the plurality (or potentially the majority) which is a different matter from representing the will of each individual member, which is the level of decision making we're talking about when we're talking about switching unions.

Not in Canada, the closed shop is the law in every province and for the Federal government. Same with most states the United States unless there is a "Right to Work" law in place. The law is one local per craft or workplace. Changing unions means either changing the job definition (pay code) for a group of employees or changing the affiliation of the local.

The basis of the closed shop is the Rand Formula, announced by Supreme Court Justice Ian Rand in 1946 to settle a strike at Ford in Windsor, ON. Union membership itself is not compulsory, but when an employer signs a contract with a union which covers all employees in a workplace, non-union members who benefit from that contract have to union dues as they are getting the benefit of the union's services. If Worker A and Worker B due near-identical jobs and Worker A has a union contract, worker B has to pay union dues for the benefit he has derived from the existence of the union.

In the Public Service of Canada, your union membership is based on your job. There are two main unions, PSAC, the Public Service Alliance of Canada (itself organized as a federation of unions covering various departments) which covers most clerks, regulatory personnel and assistants and the non-professional Officers, and the Professional Institute of the Public Service of Canada which covers Officer-level positions which are filled by professionals like accountants, engineers and scientists.

Executives are non unionized. The Public Service consists of three general classes: clerks and administrators, officers and executives.

[rsj]

If you have increasing returns to scale, competition results in only a single firm.

The service provided by unions is bargaining power, which increases with the number of union members per firm/occupation.

So the market outcome would be one union per occupational group per firm. With many unions, each individual union has less bargaining than if the unions were to join forces.

Other services, such as dispute resolution, are incidental to the core functioning of the union. It is all about fighting over who gets the rents created by the institution as a whole. Management wants to keep all the rents for itself, and the unions are demanding a share of the same rent.

[Andrew L]

I know - there is competition at the level of the individual worker in the UK!

Interestingly, though, union membership has declined significantly in the past 30 years. (These seem to be the best statistics on this, part of the UK govt National Statistics, so reliable) http://www.bis.gov.uk/analysis/statistics/trade-union/union-membership-2011

Union membership started a pretty major decline at the same time, roughly, as the closed shop was eliminated and restraints were put on union power. So competition actually undermined union membership.

Actually, sorry, that's probably not quite right. The end of monopoly power undermined union membership, as workers were no longer forced to join. But competition was more prevalent, which should have improved the offering to workers (in terms of better voice/influence in the workplace?). Yet despite the competition, unions were unable to make up for it through improved voice by offering a differentiated approach.

So workers have wholesale abandoned the union product, it's no longer able to offer benefits to people.

[Jim Rootham]

Given that unions are uniquely representative of the working class and that one of their major functions is to improve workplace safety, it would seem that the people who object to unions are telling the working class to shut up and die.

[Determinant]

Just one thing: there is the classic argument that "we have Workplace Safety laws now, so we don't need Unions for that." To which I respond: ROFL!!!

A union grievance committee is ten times more effective and timely than a legal complaint. Try actually asserting your legal rights such as the right to refuse unsafe work when you don't have a union behind you. See if you don't get marked for termination if you complain in the absence of a union.

And what rsj said. I'll even go along with his use of "rents".

[BD]

1. Is it always hard to switch unions? Is this only true in the public sector? Do workers switch unions often? What are the laws that discourage unions competing with each other to represent a group of workers?

It is as difficult -- sometimes more difficult -- to switch unions as it is to organize one in the first place. It's a two stage process in most CDN jursidictions: 1. Aquire enough membership cards (around 40% or so of total members in a bargaining unit) to gain the right to have a vote 2. Win the vote. This can only occur within short windows (i.e. roughly the last three months of a contract, or, in the case of BC, the last 3 months of every year)provided for in law. Thus, there is a short, very intense period, in which workers can switch. The hurdles here are the resources of time, personnel, and communication and overcoming incumbent bias. In short, competition costs a lot and the rewards aren't always considered worth it.

Also, as noted above, the labour movement in Canada is generally opposed to competition for ideological reasons. An adversarial system which sees workers pitted against capital rather than partners in cooperative enterprise requires -- in their perspective -- strong solidarity even in the face of union malfeasance or poor service. This sometimes comes across as movement first, worker second. Competition, where it does exist, tends to occur more in the private sector than the public sector. Also, in some jurisdictions (say, the construction industry in certain parts of the Maritimes for instance)there are legal barriers to competition because only certain types of trade unions are allowed to represent workers. That is, some unions are ensconced in law. Why? This is mainly a legacy of times when building trades unions were the only source of labour for major construction projects. This is no longer true, largely because of the success of other groups (CLAC and CEP for instance, but also an increasingly organized non-union labour groups like Merit contractors) in organizing their own labour pools. Saskatchewan's Bill 80 overturned such a situation in the construction industry there -- to the delight of CEP and CLAC and to the consternation of other building trades craft unions and the SFL as a whole -- to allow more competition. This hasn't happened in the Maritimes or Quebec yet.

The unions which do compete -- CAW and CLAC -- do so for different reasons. Sometimes it's to make up for decreasing market share in previously core industries (as in the case of CAW), sometimes its for legitimate concern for workers who aren't being represented by the incumbent (this is the story of CAW's takeover of a host of SEIU health-care units, I think.), sometimes its both. Sometimes, as in the case of CLAC, it's because of a different ideological approach to labour and the role of unions based more on a European model.

Overall, the competition takes place at a workplace, rather than individual or industrial level.

[slantendicular]

As a law student in BC who works for a labour union, under the BC regime it is not necessary to leave a union and be unrepresented for a time before joining another one. For example, the BC Nurses Union (BCNU) is currently raiding the classification of Licenced Practical Nurses (LPNs) from the Hospital Employees Union (as well as a few other unions). The LPNs signed cards. Enough signed cards to that a vote is being held. If the BCNU gets majority support, then all of the LPNs will switch unions. The regime eases such transfers in a few ways: allowing grievances to be transferred from the old union to the new, for instance. The concern at labour boards about proliferation of bargaining actors (e.g. to have one union representing the LPNs, another the janitors, etc.) is about industrial instability v. employee choice (the more unions, the more likely one of them may go on strike and the others won't have to cross the picket line, etc.). The BCNU LPN raid is just an example; in BC in 2010 there were 17 certification applications filed for already represented employees (i.e. raids); of those, half were successful. - http://www.lrb.bc.ca/reports/ANNUALREPORT2010.pdf at page 39

[W. Peden]

Nick Rowe,

"Yep, but I think that's a problem for any sort of collective decisionmaking. I don't think competition between unions over which union will represent a given group of workers (bargaining unit? local?) can resolve that problem. I'm thinking more of competition resolving the pricipal-agent problem, between the group of workers as principal and the union as their agent."

Sure, but collective decisionmaking problems are only problematic insofar as one is restricted to one collective. If I don't like how things are being run in the UK, I can very easily move to the Republic of Ireland and less easily to France, Belgium, Luxembourg or even French Guinea. The late Norman Barry gave some convincing arguments that freedom of movement was the most important kind of freedom, because it strengthens and enables other kinds of freedoms.

rsj,

"The service provided by unions is bargaining power, which increases with the number of union members per firm/occupation.

So the market outcome would be one union per occupational group per firm. With many unions, each individual union has less bargaining than if the unions were to join forces."

Quite probably, but I don't think it's very useful to think of competition in terms of numbers of participants. There are competitive situations with one supplier and there are monopolistic/oligopolistic situations with multiple suppliers. An example of the former would be the Chinese restaurant in my home town: it's the only one in town, but there's very little to stop someone else setting one up if there was demand for it. An example of the latter would be interstate trucking under the ICC, where there were plenty of members of the market but the licensing system was a horrendous barrier to new entrants.

As I see it, a competitive situation is one where there are few barriers to entry and where there is the possibility of losing. Competition among trade unions might not result in lots of trade unions, but it might result in more pressure on trades unions to perform well. There's already competition in the UK between different trades unions' associations, which have to be more considerate of the views of their members' views because a trade union can leave to join another association OR set up its own association.

[Bob Smith]

"If you posit the union as a service provider, an entity independent of workers, you have a three-sided relationship between union, employer and workers."

Actually, I think the union as "service provider" is the right concept, but not the way you're thinking of it. Let me describe an institutional structure for you. You have an entity, which enters into a contract (or contracts) with a client (or clients) pursuant to which its members will provide certain services. The services are actually performed by the "members" of that entity. The total compensation of an individual member of the entity is a function of how much work they do (hours worked), seniority, expertise, etc.

Now, that's a very high level description of a labour union. It's also a very high level description of your typical law firm (at least with respect to partners) or an employee owned corporation. Many of these discussions miss the forest for the trees. A union is just a different institutional arrangement to allow people (whether you call them "partners", "shareholders", members") to carry on business (broadly defined), it has a different legal form and set of legal relationships from a corporation, trust, or partnership, but is not fundamentally different from those organizations.

" Union Raiding, that is changing the affiliation of a local from one union to another (at the behest of the union being joined) is proscribed by large labour organizations like the Canadian Labour Congress. The CAW did it a few years ago to the Service Employees International Union and got boycotted for it."

Of course it is, for the same reason that law firms hate it when competitor scoop up profitable partners, or employers hate it when their competitors lure away profitable workers. Mind you, in any other context, colluding to discourage competitors from doing that would invoke competition laws (this is why Major League baseball relies on an anti-trust exemption, and why baseball players used to be tied to their teams). And in those other contexts9particularly the latter), you'd think the labour movement would have a thing or two to say about the practice.

[Bob Smith]

Nick: "I think that misses one aspect: who are those "insiders"? Are they the members of the union? Or are they those who work for the union itself?"

Does it matter? We say that a corporation benefits from being monopolist without asking whether the rents accrue to the shareholders or management. Mind you, in that context, we likely don't care because we object to the corporation being able to extract monopoly rents (regardless of who benefits). Why don't we feel the same way when it comes to the union? Is it all about labelling?

[Bob Smith]

"Unions are not firms as firms only interact with their customers via contracts and money. Unions interact with their members via the democratic process."

You're comparing apples and oranges. When you compare apples to apples, the "firm-like" nature of a union becomes clear.

Members aren't the "customer" of a union, employers are. And, funnily enough, the interaction of unions with their "customers" is by way of contracts and money. Members play the same role vis-a-vis unions as shareholders do vis-a-vis corporations (or partners do vis-a-vis partnerships. And Union executives play the same-role vis-a-vis unions as management does vis-a-vis corporations. They "own" the union, they aren't its customers.

Put in that framework, the comparisons between unions and other business organizations becomes obvious. And the problems with each of them are similar. In the corporate world, a real concern is the use of corporate funds by management in pursuit of their own ends (whether its lining their own pockets, engaging in empire building projects that detract from shareholder value, etc.). In the union world, we observe similar problems, with union management using funds to pursue their owne projects (i.e., does anyone thing that Canada's postal workers care as strongly about the Palestinian/Israel conflict, as their union webpage would suggest: http://www.cupw.ca/index.cfm/ci_id/13882/la_id/1.htm).

Similarly, we're confronted with the question I raised above. Why do we object when a corporation is granted a monopoly power (for the benefit of its management/shareholders), but have no corresponding qualms about granting a similar power to a union?

[Jim Rootham]

No man is an island,
Entire of itself.
Each is a piece of the continent,
A part of the main.
If a clod be washed away by the sea,
Europe is the less.
As well as if a promontory were.
As well as if a manor of thine own
Or of thine friend's were.
Each man's death diminishes me,
For I am involved in mankind.
Therefore, send not to know
For whom the bell tolls,
It tolls for thee.

[Bob Smith]

So Jim, to re-ask my question, based on your post. Why do distinguish between cooperative exercises in the form of partnerships and corporations, on the one hand, and unions on the other. Why is one form something to be skeptical of (at least for some people) while the other is something to be praised (for others)?

[A jackson]

unions - most of them, most of the time - are and feel themselves to be part of a labour movement with wider purposes than bargaining with a specific employer. Fighting each other to gain members undermines the goal of solidarity and reorganizing the unorganized detracts from expanding the movement. The CLC does have protocols which discourage raiding while providing a means for members to switch unions based on clear justification.

[A jackson]

I meant reorganizing the organized ...

[Bob Smith]

On the concept of a union as a business organization, I thought this piece in Today's star was interest (http://www.thestar.com/news/article/1214758--toronto-schools-pay-high-prices-for-small-jobs?bn=1)

The headline story is about public sector workers behaving badly (or, at least, about suspect internal billing practices and the suggestion that it might have been used to cover for having surplus workers), but the pertinent part of the story for this discussion, is that the arrangement that the Toronto District School Board has with this particular union looks very much like the arrangement it might enter into with a typical contractor, except remuneration is paid by way of wages, rather than fees.

Also, as an aside to other union presidents, when newspapers come calling , cursing them out is likely not the best way to manage the issue.