Unions: Still Mattering

This post of Megan's strikes me as quite weird. " My sense," she writes, "is that...unions are often the most aggressive right before they expire." Damn dude. Read about Walter Reuther. Back when unions were ascendant, the organizers were getting the shit beat out of them, even getting murdered. And they kept coming. Dignity means something. Indeed, on some level, it means almost everything.

Which is why Megan doesn't get the Writer's Strike. She surveys the scene, judges the industry in decline, decides there's a narrowing pool of profits from which workers can extract gains, and can't figure out why anyone bothers. Forgetting whether the economic analysis is correct (I don't think it is, and, in any case, don't imagine it relevant to the writer's demands, which are for a percentage of a new revenue stream), she's treating individuals too much like rational economic actors, and not enough like human beings. People care about fairness, too. About being paid appropriately for their work and being treated with respect and dignity. And when the bosses are transparently trying to fuck with them, they want to stand against it. When Megan thinks of unions, she thinks of corrupt labor bosses extracting the maximum dues. But that's not what unions are. Unions are this guy:

Till you understand him, you don't understand unions.

Strike!

James Surowiecki's article on the mechanics, historical probabilities, and behavioral economics that go into a strike is fantastic. After running through research showing that strikes rarely end with large gains for workers, that both sides tend to systematically overstate the strength of their position, that the longer a strike goes on the less likely it is to end well, and that, in the end, strikes are rarely economically rational once you factor in the lost wages, Surowiecki gets to what I think is the exact right bottom line:

Justice matters quite a bit in strikes, which often turn more on questions of fairness than on strict economics. Fairness doesn’t matter much in conventional economics, which assumes that, if you and I can make a deal leaving us both better off, we’ll make it. But, in the real world, if the deal seems unfair to me I may very well reject it, even if doing so leaves me worse off. The quintessential example of this is the so-called ultimatum game, where participants offered a share of a ten-dollar bill by a fellow-participant will actually turn down the free money if they think their share isn’t big enough. In the same way, a capuchin monkey who’s being rewarded for working with another monkey will often refuse to participate if she sees her partner get a better reward. And in a series of experiments run by the economists Simon Gaechter and Ernst Fehr people prove willing to pay in order to punish those who act unfairly. Readiness to pay a price in order to enforce an idea of what is right is part of what keeps sides from settling: writers accept the loss of paychecks because they believe they deserve a cut of the revenue from their work, and producers accept the loss of business because they believe that TV shows and movies are their property. The paychecks and the profit-and-loss statements may indicate that the writers and the producers should be able to resolve their dispute quickly. But in labor relations the bottom line isn’t always the bottom line.

Or, as Labor types would put it, strikes are about dignity and justice. There's also the argument that the threat of strikes, and the occasional demonstration of one, ensure better treatment in non-strike conditions (i.e, negotiations take place with the threat of a strike in the background), and so they're rational in a long-term sense, even if few individual strikes make much of a difference.

Why Labor Matters

I've still got my problems with Wal-Mart, but the health care offerings for their valued "associates" do seem to be getting better.  This is, of course, entirely a function of the pressure unions have exerted on Wal-Mart -- pressure exerted despite the unions having almost no hope of actually unionizing Wal-Mart.  Organized Labor has expended tens of millions of dolalrs over the past few years on this campaign, and while it hasn't increased union density one iota, it has given a hundred thousand Wal-Mart workers health insurance, spurred Wal-Mart to launch an effort to drive down prescription drug prices, drove them into the "Divided We Fail" health reform coalition, and contributed to the company's focus on greening their stores (they needed good press to counteract all the bad).  This is why we need Organized Labor.  They act as a countervailing force to make corporations think seriously about their roles in our society.  No other powerful actors do that.  But it needs to be done.

Are Guild Writers Overpaid?

From union strike captain John Aboud comes this interesting factoid about the pay distribution across the Screenwriter's Guild:

In fact, the median earnings of all members of the Writers Guild is only $5,000.

How can that be? About 48% of members do not earn any money from writing in a given year.

Of those writers who do make some money, one quarter earn less than $37,700 a year.

A recent study concluded only 20% of writers already employed would be employed on a TV series for all of the next five years. Another 20% would not be employed at all in the next 5 years.

Overpaid? Nope. This fight is not for the elite writers who are household names. This is for the average writer who just wants to make a living in what is a thriving and growing industry.

And even if the pay distribution were more equal, and the median much higher, why would we care? As Atrios says, "The main issues for the WGA are rather simple - when the studios repackage their work until the end of time in new and exciting media formats, how much residuals should they get (if any). If you fail to 'sympathize' with striking writers, you think that management should just expropriate the value of their work forever."

The question as to whether they're "well-paid" is dependent, of course, on who you're comparing them to -- they're well-paid compared to cashiers, and poorly paid compared to the studio executives they're battling. But whatever your denominator, that's not at issue here. The dispute is over residuals, and the question is whether the pay structure management is seeking to set up is fair. Whether the writers are well-paid is immaterial -- the residuals aren't being proposed as some sort of charity to help supplement the income of underpaid scribes.

My Commenters Is Smarter Than I: Union PR Edition

TCM writes:

I think that a large component of this problem (the poor public image of unions) is due to the fact that just about the only unions left (ironic pun intended on that last word) are the amazingly successful ones (or at least the huge and durable ones).

To be sure, there's strength in scale and the amalgamation of individuals and small groups -- but just as the same dynamic plays out in corpoorations, you end up having to root for the Goliaths of the world.

It's not so much that US unions are victims of their own success in this regard, but that the scale required for them to negotiate against similarly scaled corporations has led the mega-unions to focus ever more narrowly on maintaining the status quo.

All of which is *not* to say that the solution to the PR problem is "smaller unions." Honestly, I don't know what the solution is.

I think that's true to some extent. On the other hand, there really are roughly two types of unions at this point: Status quo unions trying to retain the gains they've made, and expansionary unions trying force their way into new sectors. The latter are, to be sure, somewhat more sympathetic. But just as the rich get richer in business, the dense get denser in organizing. The ability to call sympathetic strikes, to create strike funds, to run massive political campaigns, to have a well-funded organizing operation -- these all require a large union movement, and mean that preexisting unions make future organizing campaigns more likely. Density builds on itself.

Unions and Corporations

I've been thinking a lot about Chris Hayes' essay on the obsession with "bad unions." Unions are, fundamentally, dumb creatures. Just as corporations seek profits, unions seek gains for their members. Within that generalization are a fair number of specific deviations, ranging from the respectful treatment of workers at Costco to the corporate alliances sought by SEIU, but it's a fairly good rule on the overall.

Now, there are times when you don't want a dumb beast pursuing its biological imperatives. When insurance companies turn profits by pricing out the sick, for instance, that's a bad thing But so much as you may want to argue against corporate excesses, most agree that you do want a critical mass of companies pursuing profit and thus experimenting, innovating, developing new products and distribution strategies.

And that's much what union supporters believe. Only, unlike in the corporate world where the critical mass is safe and the excesses need be tamed, labor has long ago lost its critical mass of unions pushing for the rights, wages, and dignity of workers. So while I agree that it's a problem when teacher's unions agitate against pay boosts for teachers working in high-poverty areas, it's not near my top concern when it comes to the state of labor relations, or what sort of commentary I should produce on union issues. The loss of bargaining and political power among the working class in this country is a major problem. But the focus that educated, well-off elites give to the small-scale excesses of individual unions, and their total inattention to the macro picture, would be astonishing, were it not so obviously self-serving. When you hear more about the health insurance of the UAW than you do about the $1.6 billion compensation given to insurance industry CEOs, something's gone terribly, terribly wrong in the commentariat.

What Are Teacher's Unions For?

Over at TAP, Richard Kahlenberg, author of a new biography of union giant Albert Shanker, argues for the relevance of teacher's unions and reminds us of their original purpose:

In the 1950s, prior to when Albert Shanker and other New York City teachers forged the modern teacher union movement, teachers engaged in "collective begging" rather than collective bargaining. They were poorly paid (making less than people who washed cars), forced to eat lunch while supervising students, and told to bring a doctor's note when they were out sick. Collective bargaining increased wages, attracting higher-caliber candidates. Unions also pushed for reduced class size and better discipline policies, which most studies find help students learn better. While many teachers initially feared that joining a union was "unprofessional," most became in fact convinced that lack of voice contributed to their degrading treatment.

As he says, certain reforms would be welcome, including the loosening of some work rules, the institution of a peer review system, and certain types of merit pay. But the reason teacher's unions have -- against all the evidence -- become the causal factor in the decline of our schools, is the same reason that Republican politicians are so concerned about union member's dues going towards politics, or that trial lawyers are making too much in profits. It's because teacher's unions are a powerful part of the Democratic coalition:

The other big winners [in a world without teacher's unions] would be supporters of privatized education, and opponents of the American labor movement. No single organization is as responsible for the defense of public education in the United States as teacher unions. Other groups oppose private school vouchers, but only teacher unions have the political muscle and organizational and strategic capacity to beat back privatization plans. Likewise, the death of teacher unions would snuff out one of the few bright spots in an otherwise desperate landscape for the American labor movement.

If there was any evidence -- any at all -- that teacher's unions actually accounted for our suboptimal educational outcomes, then the case could be made that the bizarrely ferocious opposition to their existence was sincerely motivated. But that evidence doesn't exist. Indeed, charter schools, the policy innovation meant to free education from the teacher's unions, have, according to RAND, demonstrated "no measurable impact" on student achievement. Even in the face of this evidence, the loathing for teacher's unions persists. Which is no surprise: The Republicans who go after them do so to improve their electoral chances, and the quasi-liberal pundits do so to prove their independence. The educational outcomes just aren't the issue.

Debunking the "opt out" myth

By Kathy G.

Today I want to write about a new paper on the labor force participation of married women in the U.S. The paper is of interest in itself, and also for the light it sheds on the so-called opt-out question (the debate over whether women are opting out of the work force).

First, a little about the study. It's in the current (July 2007) issue of the Journal of Labor Economics and it's by Francine Blau and Lawrence Kahn, two Cornell labor economists who are among the foremost experts in the economics of gender. (The article is available by subscription only, but if you email me I'™ll send you a copy.) They look at married women's labor force participation rates between 1980 and 2000, and they found two very important results:

-- There was a dramatic increase in the labor supply (as measured in hours) of married women between 1980 and 1990, but only a relatively small increase between 1990 and 2000.

-- Married women'€™s labor supply was significantly less responsive to both their own and their husbands' wages.

Now, what does that second statement mean? Traditionally, women'€™s labor supply has been much more elastic than men'€™s. In economics elasticity refers to the percentage change in one thing with respect to a 1% change in another; in the case of labor supply, it refers to the percent change in employment induced by a 1% increase in wages. Historically, men's labor supply has been inelastic -- they'€™ll work about the same number of hours no matter what, whether their wages go up or down.

Women's labor supply, however, has been more sensitive to wages. If the wages they can earn increase, they will work a lot more; if they decrease, they will work a lot less. Their labor supply elasticity has worked in the opposite direction with respect to their husbands'€™ wages --€“ if their husbands wages increase, they will work less, and vice versa. The reason economists give for the difference is that women are much more likely than men are to substitute home production (childcare, housework, etc.) for market labor.

Blau and Kahn report that, over the 1980 to 2000 period, women's labor supply elasticity with respect to their own wage decreased by 50 to 56%, and their labor supply elasticity with respect to their husbands' wage fell by 38 to 47% in absolute value.

The authors use alternative models and estimation methods, but the results are robust to each specification. They also look at various subgroups, including age groups, educational groups, and mothers of young children, and find the same basic results. They write that the decline in women'™s labor supply elasticity

was pervasive and dramatic across a variety of dimensions, including education, race, age, and marital status. It appears that women in general have either become more committed to the idea of working or anticipate spending a larger portion of their lives without spouses, with both phenomena implying reduced own wage labor supply elasticities. The similarity in the decline in elasticities across subgroups suggests that this commitment or expectation cuts across skill levels and even family type.

One of the subgroups the authors looked at is mothers with young children, and here is where the opt-out debate comes in. Over the last several years, there have been numerous articles in the media purporting that women are "opting out" of the workforce. The New York Times, in particular, can'€™t get enough of these stories, which invariably focus on married women who are highly educated, upper middle class, and white.

The problem with these reports is that they tend to be based on anecdotal evidence that has little or no support in social science data. And since these stories are at the same time heavily hyped and thinly sourced, it raises real questions about media bias and reporters' ideological agendas. Experts who are familiar with the data, such as Claudia Goldin, the Harvard economist who is the leading scholar on the economic history of women, have repeatedly debunked the opt-out myth. But many journalists, and even some feminists like Linda Hirshman, continue to propagate the idea that career women are leaving the workforce in significant numbers. And while I find Hirshman's work stimulating and provocative, and agree with a lot of it, the fact that it's based on a false premise is highly problematic.

To be fair, not all of these media reports were pulled out of thin air (or "ex rectum," as a friend of mine likes to put it). A few of them mentioned actual honest-to-goodness data, like the statistics included in this BLS report, which do indeed show a decline in the labor force participation of mothers of young children between the late 90s and early 00s. But Houston, there is a problem here: the BLS reports raw numbers only, and that'€™s not the right way to analyze this question. Just looking at the raw data in isolation can provide a misleading picture.

For instance, if the composition of the labor force changes, something may look like a time trend which in reality is just an artifact of there being more of group X in the population relative to group Y. And indeed, some groups of women with children, like Hispanic women and foreign-born women, now constitute a larger share of the population, and are significantly less likely to be in the labor force than non-Hispanic and native-born women, respectively.

Another issue is the business cycle -- if a recession occurs that causes a decline in employment for both sexes, but you ignore that and just look at the employment of women only, it will look like a supply-side decline, when actually it's a decline that, like the decline in male labor force participation, is a demand-side phenomenon.

So, what has the actual data had to say about women's labor force participation, and particularly the labor force participation of mothers with young children? The afore-mentioned BLS paper claims that the labor force participation for married mothers peaked in 1997, then declined for several years, and has been more or less stable since 2000. But none of the studies I'm familiar with that model for labor force participation and control for population trends, the business cycle, and other issues (like measurement error, selection bias, and omitted variable bias) back up that claim.

The Blau/Kahn paper, for example, finds that, €œat least through the 2000 period, "married women with young children appeared to behave very similarly to married women overall" --“ i.e., they increased their labor supply throughout the entire period, decreasing their labor supply elasticity with respect to their own and their husband'™s rapidly in the 1980s and more slowly in the 1990s. Their paper only looks at data through 2000, and it'€™s possible that women's labor force behavior changed after this date. But according to the BLS paper, the decline in labor force participation among young mothers began in the late 1990s. The Blau and Kahn paper covers that time period but doesn't find evidence of this. (I should point out that these two papers use different datasets -- the BLS uses the monthly CPS data and Blau and Kahn use the annual March CPS survey).

Another paper by Heather Boushey, an economist with the Center for Economic and Policy Research, looks at the issue using a different methodology. (Like the BLS paper, Boushey's paper is based on the monthly CPS data. Unlike the Blau/Kahn paper, this one has not been published in a peer-reviewed journal). Boushey models what she calls the "child penalty"€ on the likelihood of labor force participation, and finds that "after controlling for changes in demographics and the labor market, the negative effects of children on women's labor supply fell between 2000 and 2004." Though the raw data shows a decline in women's labor force participation during this period, according to Boushey the reason was the business cycle, and "œwhile women had previously been more insulated from cyclical unemployment, compared to men, now they appear to be nearly as vulnerable, although it remains the case that men'€™s employment rates fell further than women's over the past few years."

The bottom line appears to be that, controlling for demographics and the business cycle, the labor force participation of mothers with young children has slowed in recent years, but not declined. Perhaps we should be concerned about this slow-down, and in any case we should strongly support policies like government-mandated paid family leave and publicly provided child care, which better enable women to combine work and family. But the media-driven hype about women leaving the workforce and embracing more traditional roles is not grounded in empirical reality.

More on the vaycay question

By Kathy G.

The results of the time use study I wrote about in the last post might seem to confirm the conservatives’ argument that Americans don’t want or need mandated time off. The logic would be that economic growth has enabled us to purchase more leisure, in the form of labor-saving devices and outsourced domestic work. So it could be argued that we’ve chosen to take our productivity gains in the form of higher wages rather than more vacation time.

There may be something to this, especially for workers with families. Given the choice of a) few or no vacation days, but higher wages, which can be used to outsource domestic work, which in turn provides more leisure time to be with their kids on a daily basis, b) lower wages, more domestic work, and less time with the kids on a daily basis, but more extended time with them (in the form of a long vacation), I suspect most people who have kids would choose a).

But ultimately I'm not buying this argument. The fact is that no one really knows what employees’ preferences are, because no one has asked us. Few workers have the power to negotiate this kind of thing directly with their employer. And even those who do may be reluctant to take time off, because of the collective action problem Ezra described in his piece. There's a wonderful book called Time Bind by the sociologist Arlie Hochschild that documents this phenomenon. It’s a case study of a company that had great work-family policies, but few workers who were taking advantage of them. It turned out that, although corporate policy said one thing, the corporate culture was to work long hours, and most employees who wanted to get ahead put in lots of overtime and took very little time off.

The institution best suited to communicate employee preferences to employers is, of course, a union. But very few U.S. workers belong to unions, and this state of affairs is unlikely to change any time soon. I’m not a lawyer but I do know something about labor law – I took a law school course in it. And one big problem with American labor law is that it doesn’t allow any employee organizations except unions. No workers’ councils, no advisory committees, no nothing – it’s a union or nothing at all.

Apparently, most employers and most unions want it that way. But there’s a good case to be made that this works to the disadvantage of the American worker. In fact, the economist Richard Freeman makes this argument in a very interesting book. However, to have worker committees that could discuss employment conditions with management, we’d have to substantially rewrite labor law, and that will probably only occur if we have a Democratic president, a Democratic House, and at least 60 solid Democratic votes in the Senate.

The Underworked American?

By Kathy G.

Lots of great posts here, but not a single really wonky one since Friday. Being that this is Ezra’s blog, that’s a state of affairs bordering on scandalous. So I thought I’d write about an important new study on trends in leisure time in the U.S.

Last month Ezra wrote an article lamenting the fact that the U.S. is the only advanced economy in the world that doesn’t guarantee its workers any vacation. That led to a discussion in the comments thread about whether Americans have more or less leisure time than they used to. I strongly implied that we have less (partly because of a well-known book from the 90s that argued this). Well, I was wrong -- it turns out that on average Americans today have significantly more leisure than they did 40 years ago. However, there is growing inequality in leisure, with less educated workers having significantly more leisure time than their more educated counterparts. I’ll explain.

The study, which is by Mark Aguiar and Erik Hurst, appears in the current Journal of Quarterly Economics Quarterly Journal of Economics. You can find a newspaper article on the study here. The journal the study was published in is subscription-only, but I’d be happy to email a copy to anyone who requests one.

Detailed study results after the jump.

Here are the main results:

-- Using the narrowest definition of leisure, women on average gained 4.9 hours of leisure per week between 1965 and 2003. During that time, their total hours of work (which includes both market and nonmarket work) declined by 7.8 hours.

-- For men, again using the narrowest definition of leisure, leisure on average increased by 6.2 hours per week, and work declined by 8.3 hours.

-- Women’s market work increased by 2.5 hours, while men’s decreased by 12 hours

-- Women’s nonmarket work decreased by 10.3 hours, while men’s increased by 3.8 hours

-- Conditional on having a child, time spent on child care increased by 5 hours per week on average (this figure is not broken down by sex)

-- Over time, there was growing inequality in leisure that mirrors inequality in wages. The most highly educated workers had less leisure and workers with less education had more. For example, in 2003 male college graduates had 0.2 fewer hours of leisure than that group had in 1965, while male high school drop-outs had 12.2 hours more. Among women, college grads had 1.3 more hours of leisure in 2003 than in 1965, while high school drop-outs had 7.9 hours more.

-- What are we doing with all this extra leisure time? Mostly watching more television, apparently.

Critics quoted in the Globe article say one problem with the study is that it does not distinguish between voluntary and involuntary leisure, and I agree that this is a problem. Yes, there’s all that increase in leisure at the bottom of the income scale, but a lot of that comes from people, men especially, who can’t find good jobs. The authors counter that half of the increase in leisure comes from people who are employed full-time.

Others make the point that by focusing what’s going on “on average” we lose sight of the fact that certain groups are working a lot more. One expert in the article points out that there’s been a significant increase in the number of individuals who work more than 50 hours a week, and also the number of couples who work more than 100 hours a week.

Here are some more strengths and weaknesses of the study.

First, the strengths:

-- It’s based on detailed time diaries, which are more reliable than other data that has been used, such as BLS data where subjects are asked to estimate how many hours they worked in the past week (people are notoriously bad at estimating this kind of thing in retrospect).

-- The sample sizes are large – between 1600 and 15,000 for each decade’s worth of data (it’s based on five separate surveys taken in 1965, 1975-76, 1985-86, and 1992-94 and 2003).

-- The authors control for changing demographics, so we can feel more confident that these are real time trends we’re seeing, and not results that are driven by there being relatively more or less of certain groups in the population.

-- They use differing definitions and measures of leisure, market work, and nonmarket work, and their basic results (that on average Americans have more leisure) are robust to these alternatives, no matter how they’re defined.

Now the weaknesses:

-- There’s a question as to whether people who are willing to fill out time use diaries are a self-selected sample. If they have the time to do this in the first place, there’s reason to suspect they may have more leisure than the actual population does.

-- No people over 65 are included, and since many people are retiring later these days, this may have biased the results. I worked as a research assistant on a study of low-wage workers at a retail chain, and a good 6% or so of our monthly sample of about 1500 was over 65, with some workers as old as 86! In the past, I doubt that very many people that old were still working.

-- Although the authors are careful to use alternative measures, it’s often difficult to say what, exactly, is leisure, and what is work. Socializing is classified leisure, but if you go to a party mainly because you want to network with people in your field, isn’t it really more like work? Also, cooking is counted as nonmarket work, but for some people, it’s more like a recreational hobby. There are many other examples of this kind of ambiguity.

-- This isn’t a criticism of this paper per se, but it would be nice if we had more studies like this one. However, this is the only big, recent diary-based time use study in the U.S. that I know of. A study this huge and this detailed is extremely expensive and work-intensive – I mean, can you imagine inputting and coding all that data, from thousands of subjects? In general, though, it’s best to have more than one study or dataset on a particular subject, because if there’s just one there’s always the chance that it’s an outlier. Though the fact that the sample size for this one is so big by and large puts those fears to rest.