Outline
Social Stratification and
Bureaucratic Organizations: Unions
I.
II.
I.
II.
From “Invisible Hand” to “Visible
Hand”
Wages, Hours and Conditions
Collective Bargaining
III. Tyson Chicken
A. Income: who gets what and why?
Next weeks readings: Week 15 and
Immigration and Race
Winners and Losers
Institutional Changes: Unions are Weak and Workers
Are No Longer Sharing In Economy’s Productivity Gains

Translation:


1975 Joe produced 200 widgets a day and was paid $200
2003 Joe produced 400 widgets a day and was paid $205
The New Inequality: Stakeholders and
Compensation
So what’s up with these things called
“Unions”

Adam Smith envisions a society as a web of atomized self interested individuals
engaged in market exchanges…


Weber noticed the emergence of Bureaucracies



All pursue self interest, Invisible Hand generates stability & prosperity
a type of organization marked by clear hierarchy of authority and the existence of of
written rules or procedure and staffed by full time officials. (D)
Bureaucratic organizations form in the economy that will assert interests of
stakeholders …Let’s explore…
Stakeholders

All the parties that have an interest, financial or otherwise, in a company, including
shareholders, creditors, bondholders, employees, customers, management, the community
and government.(Economist.com)
Invisible Hand or Visible Hand in the Labor
Market?

Chaplin’s situation as typical…now that my labor has
been commodified…now that I’m forced to sell it in
order to survive…
 What
will my Working Conditions be like?
 How many hours will you have to work?
 What will your wages be?

These are sources of CONFLICT in the labor market
 Different
stakeholders have different interests.
Invisible Hand or Visible Hand in the Labor
Market?


Chaplin’s situation as typical…now that my labor has been
commodified …now that I’m forced to sell it in order to
survive…
What will my Working Conditions be like

How fast will the assembly line go?

Will there be fire exits in the factory?

How many patients per nurse?

Note next slide on California
The Terminator vs. The Nurses …

Perhaps someone should
have warned Arnold
Schwarzenegger that
nurses are no pushovers.
For weeks, California's
famously tough Governor
has been locked in a
furious feud with the
state's R.N.s over his
decision to suspend new
state rules that would limit
the number of patients a
nurse must care for.
Invisible Hand or Visible Hand?

How many hours of labor will a person have to sell to survive

In Carnegie’s Steel mills, men worked 7 days a week, 12 hours
a day…Earned the nickname the “twin pillars of barbarism”

Will there be coffee breaks? Weekends off ? Paid Vacations?
Paid sick days? Maternity Leave? Paid maternity leave?

Will there be mandatory overtime…big issue for nurses

Will Chaplin have to clock out to go to the bathroom?

Will he be allowed to go…(NOTE next slide)
Labor Markets Create Conflict

Boss orders female staff to wear red bracelets
when they are on their periods By Ian Sparks Last updated
at 5:36 PM on 30th November 2010







A boss in Norway has ordered all female staff to wear red bracelets
during their periods - to explain why they are using the toilet more
often.
The astonishing demand was revealed in report by a workers' union
into 'tyrannical' toilet rules in Norwegian companies.
'Women quite justifiably feel humiliated by being tagged in this way,
so that all their colleagues are aware of this intimate detail of their
private life.'
The report, which did not name the firm imposing red bracelets on
female staff, has now been passed on to Norway's chief comsuner
ombudsman Bjorn Erik Thon.
He said: 'These are extreme cases of workplace monitoring, but they
are real.
'Toilet Codes relating to mentrual cycles are clear violations of privacy
and is very insulting to the people concerned.
'I hope and believe that this is not representative of the Norwegian
working life in general.
Invisible Hand or Visible Hand?

Wages…
 if
labor power must be sold
for survival…obvious
questions emerge…
 How
much will be people
be paid for selling their
labor power?
 How
will the economic pie
be divided between
various stakeholders?
How should the economic pie be divided?





Recent GM Contract:
Workers wanted a 3% increase in
pay for 3 consecutive years
Translated into a cost of $2.26 billion
for GM
For stockholders, an estimated loss of
$1.10 to $1.15 in dividends per
share
Money can’t go to both places…Where
will it go?

Wall St or Main St…
Wages, Hours, and Working Conditions
are open questions…
Your family has just been forced off of the land in Ireland. You head to Dublin,
hoping to find a place to sell your labor. Nobody wants to buy it. You get on a
boat and go to America, and upon arriving learn of a Mr. Eimer who is buying
labor for his blanket factory. You apply, and he hires you. You work 12 hours a
day, 7 days a week. You receive no vacations, and are paid $1 a day, which is
barely enough to feed your family. Eimer makes 2,000 times as much as you.
Working for Mr. Eimer sucks. It is dark, dirty and dangerous. He has his
managers look in the toilet to make sure you’ve actually made a turd. You tell
Eimer you are not satisfied with your wages, hours and working conditions, but
he tells you to beat it. “Don’t let the door hit you in the back of the head.” This is
troubling,& you worry about your family. You wonder if this is what life is
supposed to be about

How might Adam Smith suggest that self interest and the “invisible
hand” could improve the conditions in this workplace? Use class
concepts: self interest, competition, exit, etc.
Invisible Hand Self Regulates
Adam Smith Says: Quit or Exit
Individual choice drives system
 Factory sucks, individual worker should quit
 If Eimer’s workers keep leaving
 Eimer will either have to change or go out of business
 Invisible hand will correct situation
 Firms with bad working conditions will ultimately disappear
 No need for outside intervention


In the long run, the invisible hand will regulate things
Some respond… “In the long run, we’re
all dead…”



Invisible hand will take too long
sort situation out…if it even
can…
In the real world, how realistic is
it to expect that all workers will
quit all the bad jobs and make
them disappear?
What kind of things make it
hard for people to quit bad
jobs?
One Reason People Keep Lousy Jobs
Wages, Hours, and Working Conditions
are open questions…
Your family has just been forced off of the land in Ireland. You head to Dublin,
hoping to find a place to sell your labor. Nobody wants to buy it. You get on a
boat and go to America, and upon arriving learn of a Mr. Eimer who is buying
labor for his blanket factory. You apply, and he hires you. You work 12 hours a
day, 7 days a week. You receive no vacations, and are paid $1 a day, which
is barely enough to feed your family. Eimer makes 2,000 times as much as
you. Working for Mr. Eimer sucks. It is dark, dirty and dangerous. He has his
managers look in the toilet to make sure you’ve actually made a turd. You tell
Eimer you are not satisfied with your wages, hours and working conditions, but
he tells you to beat it. “Don’t let the door hit you in the back of the head.” This
is troubling,& you worry about your family. You wonder if this is what life is
supposed to be about

How you use the concepts of collective action, voice and some of other
concepts to tell you how to address your situation?
Visible Hand Regulates…


Job sucks…exercise VOICE instead of quitting.
Join with other workers to build a bureaucratic
organization that can exercise “collective voice” to
demand better hours, wages and working conditions

Let’s all agree that nobody will work for less than $X…

Provide us with $X, or we’ll strike (none of us are going to come to
work…none of us will sell you our labor power)


Use the Threat of collective exit will increase voice
Try to reduce competition between workers and increase
cooperation
Modernity generates new bureaucratic
organizations called Unions

As modernity unfolds workers form unions and when
the New Deal emerges, unions grow significantly
Unions encourage Voice instead of
Exit…

We call these new bureaucratic organizations that provide workers
with voice in the workplace UNIONS…


an organization representing workers that collectively bargains
with management over wages, hours and working conditions. (D)
What do I mean by Collective Bargaining?

Adam Smith thought market competition between individuals
should regulate wages…individuals cutting bargains with
employers…


5,3,2,1…
How are wages set in a collective bargaining setting?
Unions encourage Voice instead of
Exit…


UNIONS…
 an organization representing workers that collectively
bargains with management over wages, hours and working
conditions. (D)
Collective Bargaining

a method for determining the terms and conditions of
employment via negotiation between an employer and a
union (D)

Wages are not set solely by market forces…but through negotiations
Temple nurses set March 31 strike
deadline (Phil Inq Mar. 20, 2010)


Invisible hand: if an individual doesn’t like
what Temple offers they should quit
Visible hand: individuals collectively bargain
and if they don’t like offer, they refuse to
sell their labor…they strike.

Nurses at Temple University Hospital have set a
March 31 strike deadline if progress is not made
in their contract talks with the hospital.

The nurses and other health-care professionals at
the hospital, who are represented by the
Pennsylvania Association of Staff Nurses and
Allied Professionals (PASNAP), have been
working without a contract since September.

They are at odds over wages, benefits, staffing
ratios, and a provision the hospital is demanding
that would limit what the union and its members
could say publicly about management and
hospital staff.
Collective Bargaining and Wages
MEDIAN WEEKLY EARNINGS OF FULL-TIME
WAGE AND SALARY WORKERS, 2000
Sectoral Breakdown of Union Advantage,
1995
Employee Group
Union Advantage By %
All Wage & Salary Workers
16.7
Private Sector
9.1
Public Sector
2.7
Construction
30
Mining
16.6
Manufacturing
16.4
Transportation, Communication,
Utilities
20.5
Wholesale & Retail
5
Finance, Real Estate, Insurance
4.3
Public Administration
6.4
Services
3.9
Collective Bargaining and Benefits
(Pct.
Of Workers, March 2003) http://stats.bls.gov/news.release/ebs2.t01.htm
All
Ret:
Plans: Defined
Retire Benefit
ment
Benefi
t
Retire:
Medical Dental Vision
Defined
Care
Care
Care
Contribution
All
Workers
49%
20%
40%
45%
32%
19%
Union
Workers
83%
72%
39%
60%
51%
37%
NonUnion
Workers
18%
15%
40%
44%
30%
17%
Unions in America



So unions impact wages, hours and working
conditions…
That’s why many workers like them, and many
employers don’t…
What has happened to union density (percentage of
workers in unions) in America over the last several
decades?
Unions in Contemporary America


For many workers a move from Collective Bargaining
back to Individual Bargaining…
Though this general trend varies by economic sector…note
next slide
A Changing Labor Movement…

Private Sector- GM
autoworkers, Walmart
workers, Taco Bell Workers,
Citibank, etc,
40.00%
Percent Unionized
35.00%
30.00%
25.00%
20.00%
Private
15.00%
Public
10.00%
5.00%

Public Sector- City Cops,
Teachers, Nurses, Secretaries
at Public Universities, Forest
Rangers, Firefighters, etc.
0.00%
1950 1970
1990
A Changing Labor Movement…

Unions decline in private
sector, but grow in public
Sector

A smaller percentage of private
sector workers are in
unions: autoworkers,
steelworkers, machinists
cashiers, etc.
Percent Unionized
40.00%
35.00%
30.00%
25.00%
20.00%
Private
15.00%
Public
10.00%

A much larger
percentage of public
sector workers are in
unions: Teachers, Cops,
Firemen, Nurses, University
Staff, DMV workers, prison
guards, etc.
5.00%
0.00%
1950 1970
1990
Who Gets What and Why? Winners,
Losers and Power



Power- the ability of individuals or the members of a group to
achieve their aims or further their interests, despite opposition
from others (D)
Video Clip on the Tyson Corporation and the United Food and
Commercial Workers
As you watch, jot down notes about the way different people
in the video think pay rates should be set in society
Interests Collide…

Stakeholders


All the parties that have an interest, financial or otherwise, in
a company, including shareholders, creditors, bondholders,
employees, customers, management, the community and
government. (D) (Economist.com)
Tyson wants to reduce starting and top pay

New entry level: $18,720 a year…


New top pay($11) lower than old starting pay ($11.10)
Poverty Threshold for a family of 4 in 2003: $18,810

Less than that and the government considers you poor
Bureaucratic Organizations Representing
Different Stakeholders Collide

1. What is the position of the United Food and Commercial
Workers union with regard to the ideas that Tyson should pay
a living wage? What reasons are given to justify their position?
Bureaucratic Organizations Representing
Different Stakeholders Collide

2. What is Tyson’s position with regard to the idea
that it should pay a living wage? What reasons are
given to justify their position?
Bureaucratic Organizations Representing
Different Stakeholders Collide

4. With regard to chickens and immigration: In
theory, if the wage offered can’t attract workers,
what is a company expected to do? What did
Tyson do at their chicken plant? How does this
impact the workers in Jefferson?
Bureaucratic Organizations Representing
Different Stakeholders Collide

3. How does the pay and benefits offered by
Walmart impact workers employed by other retail
stores?
Bureaucratic Organizations Representing
Different Stakeholders Collide

5. In your opinion, is it okay to
pay a wage that is so low that
workers qualify for food
stamps, Medicaid, and other
forms of public assistance that
are paid for by taxpayers?




Tyson’s position
Taxpayer’s position (note slide)
Prevalence of such wages
requires a more nuanced view of
poverty and “welfare” in
America…
Large number of the poor are
the “working poor” and their
kids
Most poor families have someone
working…

The Work History of Families in Poverty, 2000
Work History
No full time worker
1 full time worker
2 or more full time workers

Source: US Census; Poverty in the US, 2000 (2001: Table C) in Kerbo, p.259
2000
46.1%
44.5%
9.4%
Bureaucratic Organizations Representing
Different Stakeholders Collide

6. In your opinion, should corporations be required
to pay a living wage? If no, why not? If yes,
why…and how might such a goal be achieved?
Living Wage Laws



January 30, 2006, University Memorandum,Series 4 - #8
ARAMARK Update
Last spring a group of students and faculty asked that the
university consider its responsibility regarding the wages of
individuals hired by contract employers such as ARAMARK.
Since that time, I personally spoke with ARAMARK hourly
employees about their concerns and had several conversations
about this issue with my faculty and staff colleagues, members
of the Board of Trustees as well as student leaders
Widener Living Wage

I am pleased to announce that ARAMARK and
Widener have agreed to set the minimum hourly
wage for ARAMARK employees at or above $8.50
per hour beginning in September, 2006. In addition,
there will be an annual inflationary increase so that
within a year the minimum hourly rate for all
ARAMARK employees will be approximately $9.00 an
hour. Increases for current ARAMARK employees will
be based on the performance reviews of the
individuals as set by corporate policy in the future.
Corporate Power vs. Union Power

Power- the ability of individuals or the members of a group to
achieve their aims or further their interests. (D)

UFCW & Tyson: How did it end? Predictions?


Could the workers refuse to sell their labor and thus give up
their income longer than Tyson could go with reduced
production?
Law allowed Tyson to permanently replace the workers in
order to maintain pepperoni

Ted is on strike…Tyson gives Ted’s job to Bill…Bill gets to keep job
forever
Corporate Power vs. Union Power

UFCW & Tyson…How did it end? Predictions?


Strike ended in January 2004. Union lost.


Could the workers give up their income longer than Tyson could go with
reduced production?
8 months is along time to go without pay…
CA Grocery Stores and UFCW. Union lost.

“In the biggest confrontation in years, a 138-day dispute involving 59,000 California
supermarket workers, the companies trounced the union, obtaining a two-tier contract that
means lower wages and fewer health benefits for new employees. (NYT 3/10/04)

The just-ended California supermarket strike and lockout erased more than $235 million in
combined fourth-quarter profit at Kroger Co. and Albertsons Inc., but they said Tuesday that
the labor contract they won was worth the price
Unions & Modern Society…

Currently 17.8 million unionized workers
in US


13.7% of all workers, down from 35% in
1950s
US labor movement remains an important
force in society

Though smaller and weaker than it once
was

Pay attention to the Employee
Free
Choice Act currently in Congress

US labor movement is smaller weaker than
in most other advanced industrial capitalist
societies
Society as complicated…Interests
collide


Which side are you on…maybe it will depend and which hat you
wear…
When Walmart or Tyson pay low wages and/or offer few
benefits

Owners and shareholders get more money

Workers get less money

Taxpayers pay for public assistance

Consumers get cheaper pepperoni, chicken, toasters and groceries
What’s the Best way to address the conflicts that
emerge in the labor market?

Should the primary mechanism of adjustment be EXIT


Should the primary mechanism of adjustment be
VOICE


Individuals making choices about where they want to work
Groups bargaining over wages, hours and working
conditions
Reasonable people have, and continue to, disagree on
this…
Next…

We’ll see…