Opinion and Forefront

MARCUS: Labor's vast potential going to waste

August 4, 2012

Morton J. MarcusToday, unions are being peeled so that they become smaller. They are being sliced and diced in an attempt to get rid of them. But they are not being used to good advantage.

They are being blamed for America’s declining dominance of world trade as well as the perilous finances of local and state governments. These unrealistic charges fail to get at the core issue.

Inept management is as pervasive among unions as among corporations and not-for profit agencies. Too often, unions and firms see the other as their enemy rather than their partner in a highly competitive, rapidly changing environment.

Instead of focusing on how the firm and its workers can advance their mutual interests in the success of the company, they battle over small issues. The petty grievances of employees and the equally petty rigidities of employers form the day-to-day interactions of the two parties and the image the public has of both.

Unions must define and protect the interests of their members. They give voice to workers who are often at a disadvantage in dealing with employers.

However, often that means taking the side of a worker whose behavior is contrary to the well-being of the firm and reduces the productivity of other workers. Yet, the union might argue, for example, rigid starting times for work fail to account for the day-to-day vagaries of life that might prevent workers from being “on time.”

This simple example reveals a conflict of cultures. Being on time is of consequence when work is interdependent and temporally coordinated. For some persons, however, on-time is virtually a moral issue.

Others see other priorities that keep people from being on time: children who need attention, or unusual traffic delays. They are more relaxed about obedience to the clock and have no internal need to worship a timepiece.

Some labor experts argue that the union and the firm must educate the worker so they share the same set of values. Those values are the ones that promote the well-being of the firm, requiring labor to accept the balance sheet and the income statements as the measures of success.

Few suggest that the employer might be the problem and the one to require education—a reorientation to the realities of the modern workplace. How interdependent are the jobs in that company? Do they truly require simultaneous arrival and departures to be efficient? What benefits are gained from flexibility?

It is easier for a manager to set an arrival time for all than to explore actual work flows and balance them with respect for the employees’ variable circumstances. The larger picture on which the firm’s existence depends requires a different framework.

Perhaps labor needs to be seen as an integral part of the firm, not as merely another input in the production process. It means a firm that closes a factory and moves production elsewhere is a failure, not a success with executives who deserve bonuses.

Can sustaining jobs really be a higher priority than return on equity? Of course it might require employees to show up, on time, for a serious day of work.•

• Marcus taught economics for more than 30 years at Indiana University and is the former director of the university’s Indiana Business Research Center. Send comments on this column to ibjedit@ibj.com.

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