Trade Offs

Sunday, February 20, 2011
I have been following events in Wisconsin with some interest, and I have to say, they've led to a small shift in my worldview.

I've never been a huge fan of Unions. While I recognize their historic contribution to the safety and well-being of workers in this country, and their continued contribution in dangerous and exploitative occupations, they have one fatal flaw in my view: They never, ever, encourage a meritocracy.

The military is the original meritocracy, at least in the enlisted ranks. It doesn't matter where you come from, who your parents are, or how much money your parents had. Your success or failure depended entirely on you. I came of age in that environment, and so my first experience working in a union shop was quite the shocker. I could never understand why someone who did (literally) 5-10% of the work that I did made more money than me, simply by virtue of having been with the company longer.

This has always bothered me, on a fundamental level. Let's call it a corollary of the "equal pay for equal work" concept - if "equal pay for equal work" is a moral truism, then how is "less pay for more work because that's the way the contract is written" even remotely ethical? Such a work environment encourages mediocrity, and you can bet I got out of there as soon as possible, moving into management where my pay treatment was based in large part on my performance.

So while I thought Governor Scott Walker was a sniveling little tool for threatening to call out the National Guard if public employees dared to exercise their Constitutional rights, I thought the right's position contained a point worth discussing - larger contributions from public employees for their health care and retirement.

But then I read a post by an online friend who works as a professor in the public sector in Wisconsin, and like a lot of things Dave writes, it made me think, and reevaluate my position.

I'm not sure I agree with the idea of using the public sector's bargaining power as leverage for forcing private industry to pay more in health care and pension benefits. I tend to think of the former is the responsibility of the federal government and the latter a combination of personal planning and federal government assistance. However, Dave did bring home another point that bore closer examination: The idea that public sector employees get better benefits and greater stability in exchange for lower salaries.

So to the Internet I went. I used educators as my example, and discovered that the median salary for postsecondary teachers in this country is $58,830.00. The average salary for college professors is $79,439.00. Now that's pretty good money. Except when you compare it to what these people would make if they took their education and went to the private sector. As David notes, public sector employees engage in a trade off - they trade the higher salaries their education and skills would earn them in the private sector for the stability and better benefits they get by working in the public sector.

I choose to work in the private sector. Even without the advanced degrees a professor has to have, my monetary compensation is higher than theirs. Because I work in sales, the disparity is actually pretty considerable. But there's a trade off - my job is risky. I can be fired at any time for any reason (or none). My pay fluctuates on a monthly and yearly basis based on how much my team sells. In times of economic hardship, my job is always at risk. And while my own company has excellent health benefits, I still pay a certain amount out of pocket for them, and I have no pension. This is the choice I've made, and I'm satisfied with it.

I don't think that educators I've used as an example should be vilified for making a different choice. I can live with the risk I've assumed in exchange for higher compensation, and (for the most part), I love the work I do. I have to assume that Wisconsin educators have reached a similar equilibrium with their own circumstances. If the state chooses to treat them like private sector employees in terms of their benefits and job security, then I suspect they're going to have to pony up and pay them like the private sector, too. Either way, the Wisconsin budget is still going to be upside down, and the Governor is still going to be up the creek without a paddle.

Let's see Governor Walker call the National Guard out on that.

17 comments:

Eric said...

Janiece, I cannot think of another general sector in private nor public employment other than your example of the enlisted ranks of the Armed Forces in which "It doesn't matter where you come from, who your parents are, or how much money your parents had" and "Your success or failure depended entirely on you." While there may be individual corporations and government agencies in which meritocratic principles prevail, in most human endeavors one is faced with office politics, institutional politics, nepotism, favoritism, prejudice, etc., etc., etc.

To that extent, ironically, unions can lead to something with a slightly greater resemblance to meritocracy: receiving greater pay for less work because you've put in oh-so-many years at least has some resemblance to acknowledging the idea that an employee has paid his or her dues, whereas receiving more pay for less work because you're the CEO's nephew has no bearing on what one has or hasn't invested in the job. In other words, part of the point of a union is so that ordinary schlubs can leverage their collective power to shut a company or agency down and it doesn't matter so much if none of those schlubs are somebody's cousin or in-law or kid.

The other thing your analysis doesn't seem to touch on is that employers and employees are not necessarily looking towards the same goal, even in the public sector. As a general premise, an employer is likely to be looking at extracting the maximum benefit for the minimum cost, whether the benefit in question is shareholders' profits, votes next November, or something that government is actually supposed to be concerned with like the quality of roads. The result is that employers and employees frequently have an innately adversarial relationship in which the sole power of the workers is to not work while the employer is in a position of some power (note that the sole power the workers have in fact derives from self-sacrifice: the workers need the jobs, so if scabs are available and willing, the workers don't even have the power not to work and will lose more than they can possibly gain by exercising their only "advantage"). That shouldn't be the same kind of issue in the public sector because the workers in question are also citizens, but Wisconsin is a demonstration to the contrary.

Of course, it's possible for employer and employees to have a symbiotic relationship instead of an adversarial one... in a completely different culture in which employers and employees feel a sense of honor and duty for each other's well-being and a responsibility towards society-at-large.

As a personal footnote: I am a public-sector employee in a right-to-work state in which collective bargaining by public workers is illegal. This means I am stupid, Janiece (I'm not kidding), because I accept less compensation than I would be making in the private sector (indeed, it's fair to say that after 13 years, I'm making what I might have been making fresh out of law school), my benefits package hangs by a wire (and indeed has shrunk since I began employment) and I can be fired at any time. My pay doesn't fluctuate, but I haven't received a raise--not even a cost of living raise--in quite a long number of years and one of my benefits--longevity pay--was almost cut a year ago, which would've been the equivalent of a 10% pay cut in my case (people with longer careers with the state would've suffered proportionally larger cuts--e.g. 25% for a 25-year employee). So why I do what I do has very little to do with job security or compensation. Just sayin'.

My solidarity is with the Wisconsin public employees.

Eric said...

Oh, two more quick thoughts on top of a long comment, or maybe it's one connected set of thoughts:

1) What Walker is doing is very much about scoring points against the unions, and not right and wrong. This is a direct outgrowth of the American right demonizing unions to punish the unions for mostly supporting Democrats, with the incidental bonus of putting corporations in a position to maximize profits by cutting one of their most basic costs: labor.

The right's position on this, in other words, is only accidentally about merit pay and equal pay for equal work. What would suit them just fine would be if the Democrats no longer received union support and the equal pay for equal work was sweatshop wages for sixty hour workweeks (i.e. if most corporations could bring Chinese labor practices back to the U.S., they'd no longer have to outsource).

2) In similar fashion, the right has demonized government employees. We're not citizens who are heroically serving our communities (unless we're in the Armed Services, natch), we're lazy bureaucrats who cause trouble and lap up our awesome benefits that we gouge the taxpayer for. (Never mind that we're taxpayers, too, which means we're actually paying our own salaries, basically.) This is Reagan's great legacy to the people of the United States--"government is not the solution to our problem; government is the problem." Here, again, Walker is scoring easy points with his base. (Ironically, by going after his own: isn't the governor the ultimate public servant, at least in theory?)

All Walker and his ilk are doing is they're going after two of the right's great bête noires, unions and the public sector. Any merit to their arguments is purely incidental to publicly flogging those two demons.

Janiece said...

Eric, you make some good points.

I realize that nepotism and other non-objective criteria are far more prevalent in both the public and private sector are far more common than anyone admits. But if you think the military enlisted promotion system has no basis in office politics or institutional politics, you're dreaming. Everywhere there's people, there's politics, and while the military does a far better job of instituting and maintaining a meritocracy, it is not immune. I just think it's much farther along than any labor union you can name.

Please note that my issue with the Union revolves (almost) entirely around the "seniority is king" mentality, without taking any consideration for job performance, productivity, or other variable, objective performance measures. So basically I think conducting layoffs (for example) based solely on seniority without regard to performance or productivity is an incredibly stupid way to run a business - and a Union. On a cultural basis, it encourages the wrong kind of behavior in terms of fostering success for individuals, the Union, or the company.

I think the adversarial relationship you refer to is, in fact, "the natural order of things." But I also think compromise is the order of the day. The Governor of Wisconsin is a douchebag not necessarily because he wants to renegotiate benefits - in the adversarial relationship you describe, that's kind of his job. He's a raving, flaming douchebag because he doesn't want to negotiate - he wants to accomplish his goal by imperial fiat. Thank you, King Walker.

Finally, I think you're right on the money in terms of the right's demonization of the public sector. There's always some entitled spooge out there who claims that those who feed at the public trough aren't allowed to complain about the quality of the food. It never occurs to any of these Ayn Rand apologists that perhaps some percentage of these folks are doing the work they are because it's a vocation, and they feel called in some fashion to serve others.

And since I wasn't clear in my post - my solidarity is also with the Wisconsin public employees.

David said...

I'm flattered that my writing makes you think, Janiece. I have dedicated my life to making intelligent people reconsider their positions on what they believe they know, and whether they change those beliefs in light of what I say or continue to hold them for better and more sophisticated reasons, I consider my job done if I can get them to think long and hard about why they think what they think.

As I tell my students on day one: I don't care what you think. My job is not to tell you what to think. My job is to make sure that you're thinking. This is not the same thing. WHAT you think is up to you. THAT you think is my goal.

So thank you.

One point I want to bring up is that you say the average salary for a college professor is $79k. In the UW Colleges - the 2-year transfer campuses where I teach - the average is around $50k, or a bit less than 2/3 of that national average. That's still good money in this day and age, but a lot less than we could be making in the private sector.

Further, consider - my wife has been teaching in this system for 18 years. She is fully tenured and has nowhere to be promoted to. She makes considerably less than $79k. She will never see that "average" salary.

I am not full time. I am an ad-hoc lecturer. I get paid $3200/course, which works out to $200/week, or roughly $10/hour. On the plus side, I can take care of my children without paying for childcare.

We make this trade for the stability and benefits, which we get even though we are not unionized. We are not allowed to join unions. But the blood and labor of those who did before us prepared the way for us, and I will not betray that trust.

We turn our back on unions at our peril.

nzforme said...

I am another one of those government lawyers (also constitutionally prohibited from unionizing) -- I've been at my job nearly 17 years, and my friend in private practive for about 3 makes astonishingly more money than I do. This does irk a bit, but it's part of the choice I made to do the job I'm doing. (Which, as it turns out, I actually love.)

BUT, in the midst of our current state budget crisis (furloughs), I've started to think about government pensions as almost a deferred pay arrangement. I mean, having money NOW is always better than having money LATER (thanks to the time value of money) and the flip-side is true as well: paying money later is better than paying it now. This may even be the guiding principle in government budget creation -- i.e., "We don't HAVE the money now, so let's just defer the debt, and hope we have more money later." (It isn't NECESSARILY as stupid as it sounds, since, when the economy looks good, the government does take in a lot more revenue in taxes.)

So, the government struck a bargain with me and all the other government employees. That bargain is: We can't afford to pay you what you're worth now, so we'll give you more money later. (I seriously doubt that the financial remuneration will ultimately equal what I could have had in the private sector, but it's a start.)

The problem, as we all know, is that governments (from municipal to federal) all over the country have put off so many of their financial obligations (not just pay) that the interest on the debt alone is crushing, and they're starting to realize that if they keep going this way, they're never going to be able to pay everyone everything that's owed. Resulting in what we're seeing now: attempts to get out of (or at least restructure) the current obligations, and reduce the obligations they're taking on in the future.

I understand this; I really do. And, in some situations, I can see where restructuring the bargain is necessary. Hell, when the alternative is government bankruptcy (where NOBODY gets what's owed to them), everybody ought to sit down at the table and restructure the agreement so that it's actually liveable. Which kind of strikes me as EXACTLY what we need unions to do.

jen said...

Here in Ohio, the budget deficit's about $8 billion. Firing every state employee would cut that deficit by less than $2 billion. So what's the Governor's big proposal? Let's make sure that state employees can't go on strike.

Um, yeah. Somehow, somewhere, someday that idea'll save the state a million or two. But how exactly do you propose to fix the deficit?

Janiece said...

David, I used the national average from the BLS because it relieved me of the burden of doing a cost of living conversion between Colorado and Wisconsin and also of me invading your privacy with speculation about your annual income. I did not mean to imply you were unjustifiably upset about the proposed benefit cuts because you and your wife were "making the big bucks." I do realize the vast majority of educators don't get rich teaching - hence my consideration of such as a "vocation."

And my issue with Unions - that they discourage innovation and meritocracy for individual contributors - is a personal one. I would prefer never to work in a Union job again because the culture it engenders makes me profoundly unhappy. That doesn't mean I don't see the historical value in their work, or even that I lack an understanding of their current value against the right wing whackaloons.

While being "pro-union" has traditionally been a liberal position, I don't think I have an obligation not to criticize them just because I self-identify as a liberal. Both you and Eric have left me with the impression that you believe my specific criticisms of Union culture somehow means that I'm in the Governor's corner on this one, and that's simply not true. I think (a)he's a douchebag; (b) the Unions encourage mediocrity on an individual level; and (c) compensation packages for public and private sectors are not comparable (for good reason). None of those positions are mutually exclusive.

Janiece said...

Welcome, Jen.

It does seem like there's a lot of scape-goating going on, especially on the right. But I'm a dirty, dirty liberal, so I'm probably biased.

Steve Buchheit said...

David beat me to the punch. That $79k sounds great, but my wife is also an adjunct (not by choice). She makes significantly less than that while teaching a full load by working at several colleges).

I'm also a union member (although my position is no longer a union position). During our last contract negotiations (when I was in a union position) we tried to give our employer the functions to get rid of some employees that we knew weren't carrying their water, but our compromise, because it came from us, wasn't acceptable to them. So, instead, we changed our overtime rules to remove the process those employees were using to spike their pay.

Unions have the public face of being belligerent and selfish, from the inside I can tell you that isn't the case. We want our companies to succeed. We like our jobs.

As for the seniority issue, it's not like companies haven't been known to lay off older, more expensive workers (both in pay and benefits, especially health care) to adjust their bottom line. The seniority rules a specifically in place to stop that practice.

Sometimes that is used by some employees as an excuse not to work as hard. But that's not in every case.

Janiece said...

Please note I'm not responsible for the BLS numbers. :-) They seemed high to me, as well, but I'm not sure where else to go for unbiased values in terms of median and mean pay.

Steve, I recognize what you're saying about companies engaging in age discrimination to be true. And I'm not against seniority playing some role in determining pay and job security. As Eric notes, there should be some reward for sticking it out for many years, contributing to the success of a company.

My objection is that in many contracts, it's the onlyarbiter of pay and/or job security. And that's inherently unfair.

In the Navy, enlisted promotion for E4-E6 is based on a point system. Points are given for performance evaluation, major awards, test scores, and yes, time in service and time in grade. This formula is then used to determine who gets promoted - if there are 10 slots open for a specific promotion, they put the candidates in score order, count down ten spots and cut off the rest as not promoted.

It's not a perfect system, but it seems eminently more fair than a "seniority only" system.

What I don't understand is, why aren't more Unions interested in such a system for both pay and job security? It would only increase the quality of the people on the job, while still giving credit to those employees who have a long tenure with a company.

I don't get it.

Eric said...

Janiece, I know you're not in Walker's corner, and I apologize if I left the impression I thought you were.

I think, though, that part of the success of the post-Reagan-right's dominance of the discourse (how's that for alliteration!) is that the unions get a bad rap for things that don't have a lot to do with the unions. E.g. the fact that seniority may bring privileges that appear unearned is more a matter of custom and of workplace politics--it happens in non-union workplaces just as much--union rules on that point simply codify it; indeed, I think you can make the point that by codifying it, the unions make such things more fair: you get the privileges customarily associated with a term of service, and can't be denied them just because the manager doesn't like you or something about you, and the contract sets forth what you can reasonably expect so that the rules can't be arbitrarily changed such that the person before you who had ten years gets a benefit that you don't when your ten years are in.

No doubt there might be abuses: there always are. Then again, having negotiated-and-agreed-upon rules may foster loyalty and a certain amount of return for the employer up-front, since an employee who knows he's guaranteed an opportunity to work less in five or ten years may be more willing to put in the extra effort to keep his job during the first year.

I think David's comment, "We turn our back on unions at our peril," hits the nail on the head: even in strongly anti-union states like my own, we continue to get the benefits the unions reaped in the first half of the 20th Century that have become custom, such as guaranteed vacation time and the forty-hour week. It's so very easy to forget that what some on the right want to return us to that I think many conservative voters won't realize what was at stake until the unions are gone and their own employers are telling them to work harder for less pay or starve.

David said...

David, I used the national average from the BLS because it relieved me of the burden of doing a cost of living conversion between Colorado and Wisconsin and also of me invading your privacy with speculation about your annual income. I did not mean to imply you were unjustifiably upset about the proposed benefit cuts because you and your wife were "making the big bucks." I do realize the vast majority of educators don't get rich teaching - hence my consideration of such as a "vocation."

I know. :)

I was not criticizing your use of the national numbers and I'm sorry if I gave that impression.

My point - and believe me, I've had to break it out a lot here in Baja Canada over the last week - is that those numbers are misleading. I have had any number of people tell me how wealthy I am recently, none of whom seem to be aware of the differences between public sector academia and private sector academia, or even the distinctions between flagship public campuses like UW-Madison (where the average salary for a tenured or tenure-tracked professor is higher than ours) and those of us in the freshman/sophomore campuses.

Those national averages hide a great deal of variation. Governor Teabagger and his ilk hide behind that when they make their accusations. That needs to be highlighted.

You were not doing that.

I had absolutely no quarrel with your post as it was written.

David said...

You were not "hiding," the way the Governor is.

NOT "you were not highlighting" the variations.

Sorry.

I'll get the hang of this yet.

Tony said...

"Private Ortheris's Song", Kipling*:

"I served my time for a Corp'ral,
An wetted my stripes with a pop ...

I served my time for a Sergeant,
The Colonel 'e sez 'No!
The most you'll see is a full C.B.'
And the very next night 'twas so!"

C.B. in this instance is some type of punishment detail I think, not Companion of Bath. :)

That snippet reflects my experience with as an enlisted infantryman in the US army (2001-2006, exited as an E5). E1-E4** was automatic (assuming good behavior) based on time in service and time in grade.

E5 and E6 were points as you describe for the Navy, based on awards, TIS/TIG, tests, etc. Points were assessed by a Battalion level board (I think it was the Bn XO, the Bn sergeant major, and the company first sergeants). E7 also had a point system, but was centralized...

OK... so far so good. In practice however, the points required for promotion in my MOS were so low, that if you appeared at the board at all, TIS/TIG got you enough points to make the next list for E5/E6. The decision to send a soldier to the board lay in the hands of his team leader/squad leader. I personally didn't suffer as a result of this, and still believe that 95+% of NCOs are trying to serve their country and the service as best they can.

But I can think of at least one soldier, whose only chance at seeing the board would have been to PCS. "We will send you to the E6 board." was offered as a re-enlistment incentive to me - and to every other E5 I knew who reached ETS. E5 was offered to every E4. These are not really things that should happen in a meritocracy.

In everything else we did- from who got picked for details, to who got which bunk when away from barracks, to who went on an assault and who stayed to behind to watch gear the catchphrase was 'Seniority is Everything'. I work for a non-union shop, but I'm pretty sure if I crossed the road my experience would be more like the Army, than less.

-TF
(oh, and Hi! I arrived by lurking through Eric's blogroll.)

*- Maddeningly, my copy of "Rudyard Kipling, Complete Verse: Definitive Edition" doesn't say where or when it originally appeared.

**- I think E4 in the Navy is an NCO? In the army, most E4s are 'Specialists' and not NCOs, though we have a few Corporals who are. Spec. to Corp. could be done by either the Company or Bn commanders' discretion, I can't recall which.

Steve Buchheit said...

Janiece, it also has to do with the offers are "dump all of seniority" or "keep it all in place." This was the case in all the negotiations I was a part of, it also was the major thrust of the recent education squables. Sure, they want to have merit pay, but to do so management wanted to throw out all of the seniority rules.

Just so you know, in case you don't remember I was caught out on seniority rules two years ago. That is, I was last in, and the shop I worked for needed to lay off positions. Because of recent changes to our pension plans (union pensions are just as suseptable to adjustment as everybody else's) two people the management expected to take retirement (no buy-out offered, BTW) couldn't afford to. So my job was on the chopping block. Fortunately for me, someone the management didn't expect to leave did, and that opened up the opportunity for me to move laterally (which I did).

So understand that when I'm arguing in favor of seniority, I am supporting a system that screwed me over. However, I've also seen how some of the older employees would have been let go for nothing more than negotiating well and calling out the management for failure to live up to the contract. Seniority protects whistleblowers. It also works to the benefit of employers (one employee they wanted to get rid of only needed the opportunity to retrain, he then became and employee management relied on to anchor their 2nd and 3rd shifts).

Also, in the military, you have some more protections in your job that many private sector employees don't have. Sure, a commander who took a dislike to you could make your life hell. In the private sector (as I'm sure you know with your current job), you would just be fired.

And again, we were willing to negotiate these things, but management just wanted to end all seniority. Seniority, and the protections that come with it, are really at the base of unions. Without seniority, there's not much a union can offer to potential employees.

Also, as to payment, for my contract (when I was under contract) we were all paid the same for the same job. There was no pay difference for long term employees. Not all contracts are written the same.

Janiece said...

David, we're good - we may not agree on everything (who does?) but I think agree on the core issue.

Welcome, Tony. I am somewhat familiar with the Army's promotion system (the Smart Man is an Army vet), and I think it's somewhat more prone to abuse than the Navy's, but YMMV.

Steve, we may have to agree to disagree on the issue of seniority. Because while Union negotiators claim it's management who won't compromise on the issue, guess what management's saying? In my view, neither side has very much in the way of credibility, and my own experience has left me less than impressed with the status quo.

Rachael Acks said...

I was actually a member of the CWA for several years, and my dad was a union steward for a long time until he got promoted out of craft and into management. I was going through a weird Fox News style "conservative" phase when I was in the union, so at the time I didn't really appreciate it.

I think Unions definitely do have their problems. The biggest one is that they protect slackers who are basically wastes of carbon and oxygen just because they have seniority. But I've also seen the power of unions to protect good employees from the capricious decisions of bad bosses. After I got laid off from my union job, I got fired from my next job for reasons that are still a mystery to me. If that one had been a union job, it wouldn't have happened that way, which sure would have been nice.

I also think there's a lot to be said for the collective power of workers to force change in untenable conditions. One argument I've heard a lot against unions is the "magic of the free market" argument, where if conditions are so bad, people will just seek employment elsewhere. Which a lot of times, people simply don't have the choice. We're seeing that a lot now since jobs are so scarce. And unions are honestly very weak in our country these days.

The other thing I think about is how crazy my European friends think we are, for how little vacation and how few benefits we're often willing to accept from jobs. I have a feeling that can ultimately be attributed to the weakness of our unions as well...