May 24, 2006

George McGovern Advises Unions: Stop Asking for "More"

Marc Comtois

This can be filed under "Don't kill the goose that lays the golden egg." Paragon of the Left, George McGovern has just such a warning:

I have always been a supporter of the labor movement. Unions have a proud legacy of improving the lives of millions of workers over the last century.

But lately I have seen developments that have me worried. And I have been reminded of legendary union leader John L. Lewis, who was once asked what his miners were after. His answer? "More."

It was a funny answer, and perhaps it was honest too. But these days, it's not a very effective strategy, and we are seeing some unfortunate and unintended consequences of Lewis' "more" philosophy.

McGovern lists the problems with Delphi Corp. as well as U.S. auto makers and the airlines. McGovern also explains (As Don has previously explained on our own pages) that the financial problems for older companies is:
...driven in large part by the compensation packages and work rules that unions have won for their members, which are too expensive compared to [newer companies].... "More" has, unfortunately, become "too much" in a global and far more competitive economy.

Many of my friends will consider this view heretical. But it is based on stark reality. Some progressive union leaders, facing this economic reality, have come to the same conclusion. Others are holding fast. Their behavior is partially a function of internal politics and sheer habit. Not unlike members of Congress, union leaders are in the business of asking for more. That's what their mentors and predecessors and heroes did. It's very difficult to turn around and say that "more" is not always possible.

He even (gasp) defends Wal-Mart:
It can be galling to hear companies argue that they have to cut wages and benefits for hourly workers even as they reward top executives with millions of dollars in stock options. The chief executive of Wal-Mart earns $27 million a year, while the company's average worker takes home only about $10 an hour. But let's assume that the chief executive got 27 cents instead of $27 million, and that Wal-Mart distributed the savings to its hourly workers. They would each receive a bonus of less than $20. It's not executive pay that has created this new world. [Emphasis added.]
He adds that--despite its size--Wal Mart only makes less than 4 cents on the dollar with it's thin profit-margin (low prices, high volume), which is the norm for many businesses, both large and small. As McGovern explains, low prices only work with low labor costs and so far consumers (and job applicants to Wal Mart) don't seem to mind. McGovern--who also believes that universal health coverage is better than the current employer-centric model--wraps up the piece with this advice:
Liberals must never abandon their core principles of justice and equality. But union leaders who still see American businesses as the enemy must update that vision.
I wonder if any other progressives will listen? [NB: Michael Barone has some thoughts, too.]

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Good for McGovern! Did I just say that?

Posted by: Anthony at May 24, 2006 2:47 PM

Any bets on whether Bob Walsh, Frank Montanaro, Marcia Reback or any other RI union leader will have anything to say about McGovern's OpEd? Then again, maybe Marti Rosenberg and Kate Brewster might want to use it when they are fighting their union "allies" over the dwindling resources available for the General Assembly to spend...Bet you won't see it on rifuture either.

Posted by: John at May 24, 2006 7:58 PM