Wednesday, November 30, 2011

Labor relations shouldn't be adversarial

Labor relations in the US are built on an adversarial basis.  Labor against management.  This seems counterproductive to me.  In virtually every other aspect of business we strive to build teams, not encourage adversarial relationships.  It is sort of like a football coach on a road trip pitting his linemen against his ball handling players to negotiate who sleeps in a motel and who sleeps on the bus, and then expecting them to go out and play as a team in the game.

We didn't develop an adversarial system intentionally.  Nobody figured out the best way to encourage productivity and competitiveness, then devised a system to make it work.  It is an accident of history.  Business people were allowed to exploit men, women and children for competitive advantage.  When the exploitation got really bad, the workers rebelled and formed unions to protect themselves.

Unions are not a really a good solution for the problem of worker exploitation.  Unions have a history of abuse by their management, they have a history of being oblivious to the health of the underlying enterprise, and many people don't like be forced to join a union to work.

We should use tax policy to encourage companies to organize themselves as teams in a way that makes unions irrelevant.  Create a qualification mechanism - if the payroll structure spreads the company wealth fairly (mean, median and Mode) and grants employees's a say on working conditions, the company can qualify to pay a lower corporate tax rate.

Qualifying for a lower tax rate will be very attractive to investors, since it makes a bigger pie available for them to take a piece of, and a little side benefit of qualification is it will reduce the ability of CEO's to use their power over the Corporation to extract excessive salaries and golden parachutes.

No comments: