Tuesday, December 10, 2013

Union self destruction and the demise of Detroit

I've been following a fellow by the name of Gregg Shotwell for a while, due to his union activism and local roots. He used to publish a newsletter called Live Bait and Ammo, offering a dissenting view (from union leadership) during the meltdown of automotive unions in the latter half of the past decade. His newsletter, no longer published, has apparently disappeared because the Soldiers of Solidarity site, which used to host it, appears to be out of commission. I was able to find an archive of his newsletters. It was interesting to read an angry insider's view of the union meltdown.

I decided to check up on Shotwell to see if he was still publishing his newsletter. I had a hard time finding out what was going on with him because all the web sites that seemed to publish his papers were gone. Come to find out, Gregg retired and wrote a book, which appears to be a compilation of his newsletter writings, and he got some local press when it was published. One such event was an interview earlier this year with Z Magazine. The full, extended interview is also available online.

The reason I'm bringing this up is to demonstrate exactly what happened to unions in America and why they imploded. In the interview, Shotwell laments the loss of worker autonomy as automation took over:

*Piascik:* In *Autoworkers Under the Gun*, you talk about how workers had far more control of the shop floor 30+ years ago than now. Can you elaborate on that?
*Shotwell:* Automation and lean production methods, which are an intensification of Taylorism, have successfully sped up and dumbed down the jobs. In the Seventies, auto production required a lot more people power. Our sheer numbers gave us a greater sense of influence on the job and in society at large. Workers had more control over the production and pace of the work because manufacturing depended more on workers' knowledge, skills, and muscle.
Today, everything is automated, computerized, and heavily monitored. As a result human labor is devalued and workers feel less important. Thirty years ago, we also had a union culture that advocated confrontation rather than cooperation with the boss. There was a clear demarcation between union and management. In the Eighties, management attempted to blur that difference and the UAW went along with this ridiculous idea that the boss was your friend rather than someone who wanted you to work harder for less. It's been a painful history lesson and one that UAW President Bob King has failed to acknowledge despite the overwhelming evidence that concessions and cooperation do not save jobs.
In my early years, whenever management would start to crack down, we retaliated by slowing down production. The bosses learned quickly that if they wanted to meet production goals, the best way to do that was to treat the people who did the work with respect. If I was running production and the boss gave me a hard time, I would create a problem with the machine and write it up for a job setter, who in turn would shut it down and write it up for a skilled tradesman. When I told him the boss was on my back he would ask, "How long do you want it down?" This wasn't something that we organized, it was a part of the shop floor culture. We agreed never to do someone else's job, we had clear job definitions or work rules and we adamantly refused to violate our contract. Today, the UAW promotes speed up, multi-tasking, and job definitions or work rules which are so broad they are worthless. Workers today enjoy less autonomy because they have less support from the official union and a shop floor culture of cooperation rather than confrontation with management.

Anyone who hasn't worked in a union shop, particularly in the 70s and 80s, is probably scratching their head (me included). Shotwell is lamenting the loss of a work culture where, to "get back" at your manager, workers would conspire to slow down work and harm the company. He also points out that union members relied on very specific work rules and wouldn't do someone else's job. He complains that union work rules are now too broad so that workers are expected to do multiple things.

That, folks, is what happened to unions and, by extension, Detroit. Of course a company is going to fail when that is the predominant culture. Confrontation, lack of cooperation, and unwillingness to do anything but exactly what the "contract" says. But Shotwell doesn't seem to draw the dotted line between this behavior and the failure of unions at the Big Three.

Shotwell also correctly points out that the Big Three's leadership failed, big time, by failing to produce quality designs as foreign competition stepped up. But he is completely blind to the union's failure to be a positive part of that equation. Shotwell advocates more confrontation with "management." He doesn't grasp that it's counter-productive and destructive. Apparently he believes that the country can return to the "good ole days" where there was no foreign competition, the US was the exporter of the world, and unions had limited economic constraints.

Well, the world has changed. Automation has done more to reduce manufacturing jobs than foreign competition over the last decade, and private-sector unionism is dying. But through the writings of Shotwell, we can see the roots of failure of Detroit.

Friday, December 6, 2013

The full Detroit bankruptcy eligibility court opinion

For your reading pleasure, enjoy how Judge Rhodes smacks down the unions in their arguments against Detroit's bankruptcy.

Read the full opinion.

One small example:
The Contracts Clause of the United States Constitution, which is Article I, Section 10, provides, “No State shall . . . pass any . . . Law impairing the Obligation of Contracts, . . .” AFSCME argues that chapter 9 violates the Contracts Clause. This argument is frivolous. Chapter 9 is a federal law. Article I, Section 10 does not prohibit Congress from enacting a “Law impairing the Obligation of Contracts.” Id.

Wednesday, December 4, 2013

The statists of Grand Rapids get all sad over their portrayal

Courtesy the Grand Rapids Press
Last week the Grand Rapids Press ran a story about how the city of Grand Rapids is looking to hire a parks director at the rate of around $50 per hour, pursuant to the $4.4 million annual tax increase passed earlier this month for parks. The story was accompanied by several photos of the tax increase's supporters partying it up at an election-night party after they learned the tax increase passed. They were so excited to be extracting an additional $4.4 million from the residents of Grand Rapids, to cover the fact that they gave away the farm over pensions decades ago, that they broke out the champagne.

The local statists of Grand Rapids weren't so pleased that they were portrayed as getting all excited about raising taxes and spending other people's money on overpaid bureaucrats. So they complained bitterly about it on facebook.

josh leffingwell, jon dunn, mike ewer, christopher reader, amanda wilkinson-brown
Wah wah!

Keep in mind that these are the same folks who were very upset earlier in the year when another of their facebook conversations was exposed as they were gloating about how they were successful in preventing a private landowner and job creator from expanding his business. The business owner didn't fit within their "plan" for the city:

“Ain't nobody tearing down buildings on Lyon! Martha's request is denied!” Josh Leffingwell posted on the salon urbanist meetup page after the Thursday, July 12, vote.

Anyways, back to the story. Apparently these folks have enough pull at the "conservative" Grand Rapids Press that they were successful in getting the party photos removed from the original parks director article! You'll notice that the article now features lovely generic photos of children playing on park equipment. For your reference, we saved a screenshot of the original article here.

We're not really surprised. The Grand Rapids Press hasn't met a tax increase it didn't love and consistently supports the political establishment elite of Grand Rapids whenever they want to increase spending, taxes, or bigger government. But hey, when these local statists get called out by the rare article showing who they are, they go crazy and claim that the GR Press is "conservative." LOL.

Tuesday, December 3, 2013

Unions in Grand Rapids looking for a contract, still don't get the pension problem

I wrote nearly four years ago that the city of Grand Rapids has a serious pension problem. While I plan a more in-depth post soon, I wanted to quickly check the numbers and see how they were doing since that last post. Well, it's worse than I thought. Please go back and review my previous post, and then come back here.

The city's general pension fund released its latest annual actuarial valuation report in June of this year. You can read the whole document here. Pay special attention to the graphs on page A-12. I've reproduced them below:

You'll note in my 2010 blog post that the number of active employees was still higher than the number of retirees who are drawing on the city's pension system. Now you can see that the number of retirees outnumbers active employees. According to the report, there are now 0.7 active employees for each retiree.

Even more shocking is that "benefits as a percent of payroll" chart. In 2010 it cost the city about 40% of payrolls to provide benefits... now that number has skyrocketed to over 60% and is approaching 70%. That's absolutely, incredibly, shockingly high.

And now the unions are complaining that they deserve a fair contract. Sorry folks, the city is sitting on a ticking time bomb of unsustainable benefits, and it has to stop eventually.

Not to worry though, the city's pension system expects 7.5% annual investment gains for eternity. Nothing can go wrong, right?

Thursday, November 28, 2013

Kinda sorta back

So I've taken a bit of a hiatus lately. You know, life happens. I'm making an effort to get back to more regular blogging.

While I was on mental vacation, a few important things happened:

  • The charter school cap was lifted
  • The city of Detroit filed for bankruptcy
  • The "stimulus" didn't do much of anything
  • The federal reserve has printed trillions of dollars to produce a few percentage points of GDP, and
  • The city of Grand Rapids is still hurting from its pension mess
I plan to take on these topics, and more, in the upcoming months. This site has been around since February of 2004, so we're coming up on 10 years of GR Punditry.

I've also migrated hosting for GR Pundit over to blogspot. It's easier to maintain and no longer needs my dedicated server. It also ensures that the archive will be around as long as Google is around.

More to come!