USA: Janus v AFSCME

Source: http://www.cartoonwork.com/details.php?gid=57&pid=128

Update decision has been rendered: here and the SCOTUS blog post here.

Back in front of the supreme court is the case of Janus Vs AFSCME - in essence (as I understand), the case hinges around the right of public sector unions to charge non-members' fees above basic bargaining fees. That is, can unions collect dues which then fund the unions lobbying agenda - which may conflict with the individual's political views.

A quick google search on the topic will provide a wide range of views and debate on the matter from a variety of news sources. The one(s) written by the economist I find exceptionally informative, but will be typically be blocked by a pay-wall. here is a link to an article from the BBC. Being a paper located outside of the US - I found the analysis (a little) less polarized when compared to news sources located within the US.

A recurring theme through all the articles is that if (which seems likely) the supreme court rules in favour of Janus, this will potentially cripple public sector unions in the US. This at a time while union representation is already at record lows and falling.

The question always is - is this a bad thing? we have an affinity to believe a loss is bad. from the destruction of a historic building to the extinction of some species. the fact is that throughout history the environment, society, and the economy has changed and evolved and what was necessary at one point is obsolete at another point.

Can this argument then be made for unions? That is, have unions had their time, exhausted their usefulness and now on their way out? My answer: it depends.

Side Note: My hope is to have in the coming weeks two guest authors present their views on the case and offer their differing opinions as to the implications of the expected ruling and what they view the future of unions should be. 

My opinion and I want to stress this is my normative view on the subject matter, is that unions in their current state are broken and a dying breed. unless the industry of labour representation can be drastically re-envisioned, workers will continue to question the effectiveness and usefulness of unions, while industry continues its pressure to weaken unions.

If unions are unable to re-invent themselves I believe it may be a good thing for them to go the way of the dinosaur. By far and large the majority of unions are rent-seeking firms which lack any real incentive to effectively represent their member's interests over their own.

Primarily this is because they face little if any competition. As a result, once a union is entrenched it can maintain a steady revenue stream from its member base as long as it does not grievously offend said base.  Importantly, this also means they can continue to collect dues without providing any value-add service to the membership either - in essence, they simply collect an economic rent from their members for existing.

On the flip side of the coin, my hope is that unions do not disappear but are able to re-envision themselves. In an age of growing inequality, rising importance of capital, consolidation of large companies and stagnating real wages union representation and bargaining power is required to offset the monopsony or oligopsony power presented by the firm.

Some see the problem with unions to be the system of collective bargaining itself and thus seek to destroy them. Alternatively, perhaps unions and collective bargaining serve as an important balance to the market power of firms, but equivalently need competition among themselves to prevent the complacent and rent-seeking behaviour which we currently see.

What if we were able to stimulate a level of competition amongst unions and labour representation such that at regular increments (say near expiration of each labour contract) the labour base would evaluate the performance of their current union, and solicit tenders for representation from other competing unions. In this way, we could maintain the balance of market power between large firms and the labour pool, while encouraging unions to face market forces, competing to prove their effectiveness as a representative of choice for their membership.

What are your thoughts? Are you represented by a union? Do you view the union as value-add service or rent collecting drain?

Feel free to comment below and check back in the coming weeks to see the views from by guest authors.

Sounds like the cold war is back...

Source: https://play.google.com/store/apps/details?id=com.bethsoft.falloutshelter

Over the last week, I have seen little pop-ups from time to time about "experimental new Russian Weapons"

Then today, that Russia has developed an 'invulnerable' or nuclear-capable ballistic missile which is not able to be intercepted.

All this just months after speculation that relationships with Russia were getting better.

If this is the start of the next arms race, I better brush up on my Game Theory.

What are your thoughts, feel free to comment below.