Tuesday, September 25, 2007

Job Security

The Newshour had two interesting reports. The first was a piece on the UAW strike. The second was a report on how the US Army is equipping American soldiers with the antiquated M16.

The UAW strike apparently is primarily about job security. GM wants greater ability to re-align its workforce to fit current market demands. The UAW wants to assure job security for its members.

The report on the M16 concluded that the primary reason our soldiers have antiquated equipment is that the people involved in procurement want things to stay as they are for job security.

The great machine of the industrial military complex is willing to send American soldiers onto the battlefield with antiquated equipment for the job security of the Government contractors and government employees sitting at comfortable desks.

When job security is elevated to an ideal it seems to lead to mediocrity.

I think the UAW is looking at the wrong issue during their strike. The UAW is looking at the job security of its specific current members. The UAW might do better if they broadened their perspective. Rather than looking at the job security of a specific group of people, they looked at the overall health of auto workers as a whole (both current and future auto workers) they might find that the ability of GM to realign its workforce in response to market demands will approve the quality of life of the autoworker as a whole.

Instead of approaching the job security issue with the demand: "we want this particular group of people to have good paying jobs for life;" The UAW could try approaching the question by saying, "We want x number of good paying union jobs to be in the United States." GM would then have the ability to open and shut plants as markets demand.

The great fault of unions is that they end up magnifying internal political dissent within a company. This political infighting ends up being to the long term detriment to both the employer and worker. Professional societies are at their best when the focus on the health of the health of their profession as a whole. They are at their worst when they end up with a favored group that tries to force an untenable demand on the market.

The demand that GM give the current crop of workers a job for life puts in jeopardy the ability of others to hold good paying GM jobs in the future. In this case we find the demand of job security of one group of autoworkers has the potential to harm American autoworkers as a whole.

Anyway, I found it interesting that the Newshour would follow a report on the UAW strike for job security with an interview that concluded that job security leads to mediocrity in military procurement.


Charles D said...

If the UAW allowed GM to "realign its workforce in response to market demands", GM would shut down all its US plants and build it's cars in China.

GM's big concern is health care costs, because the company not only agreed to generous employee benefits programs, it agreed to pay for the benefits of all GM retirees - a cost that represents about 1/3 of the price of each car. What GM should do is use it's clout to get the Congress to enact universal health care which would save them hundreds of millions of dollars each year.

The job security issues in the military procurement arena are quite different. The military contractors have carefully spread their subcontracting out so that any significant weapons system "creates jobs" in key Congressional districts. Thus Congress will always vote to continue any weapons system because if they don't, they will lose jobs in their district.

y-intercept said...

So your proposal is that we tax all our the janitors, nurses, day laborers and teachers so that we can give free health care to our autoworkers.

That sounds brilliant.

The ability to realign the work force is not a code word for sending the jobs overseas. The sending of jobs overseas is something that is already happening. To stay competitive, our domestic job market needs flexibility.

If the UAW were to make the total number of US jobs their arguing point and not the security of a specific group of workers, they would end up giving GM US autoworks greater flexibility while providing better security for US autoworkers as a whole.

Concentrating on the job security of a group of individuals has the effect of calcifying our workforce and increasing the chance that GM will fail and we will loose the whoe she-bang of employer and employee to the more dyanic Asian market.

Scott Hinrichs said...

This last point should be obvious by now. If these people insist on guaranteed jobs for life they will likely kill off GM and end up with no job anyway.

GM may not end up sending its jobs overseas. Instead, people will buy better and less expensive cars that are built overseas, as is happening now. Or they will buy a foreign named car that is built in the U.S. and that has higher quality and lower cost, like the my Toyota. Or perhaps GM will be purchased by an overseas concern.

Charles D said...

No, my proposal is that we tax everyone to provide health care to everyone.

Job flexibility is another way of saying we want to hire temporary workers, preferably without benefits instead of permanent workers with benefits. Since GM has already sent a large percentage of its work overseas, it is reasonable to expect that they will continue.

The UAW is not looking for guaranteed jobs for life, they are looking for steady employment with fair work rules and protection against arbitrary terminations. Primarily this strike was about employee and retiree benefits, not protecting a specific group of workers. GM signed contracts guaranteeing lifetime health insurance to UAW retirees back when business was good. Now they want to get out of their commitment.

y-intercept said...

Contractors tend to get paid more per hour than permanent employees. Generally what happens is workers negotiate down their wages in trade for job security.

There is some merit to what you are saying. In many cases, permanent employees build up some equity in their job in the form of seniority. Seniority is a form of political capital (as opposed to legal capital).

The problem is that seniority is not quite as contractual and solid as people would like. You work really hard building up a sense of ownership and gaining security. Since the sense of ownership is vacuous, it can and likely will be traded away.