Thursday, May 14, 2015

should X unionize? (in this article, X = adjuncts and grad students)

I want to discuss this set of NYT articles and these two groups (adjuncts and grad students), but I also want to answer the question in broader terms to help people apply the principles more generally.

A union is a cartel of labor suppliers. They're striving for more (monopoly) power in their market, as they negotiate compensation (pay, benefits, deferred comp, job conditions/characteristics, etc.) with those who "demand" (rent) labor services.

1.) Is it good for X to form a cartel/union? Likely/maybe. IF they can form the cartel AND keep it together at relatively low cost-- AND IF it enhances their bargaining power sufficiently-- then the benefits may outweigh the costs for them. (The various articles do a nice job in wrestling with the practical concerns here.) 

In a word, it's (far) easier said than done-- to form/maintain an effective cartel-- at least, without the government's help. One practical concern is that the increased bargaining power may not result in sufficient gains, particularly if employers are hamstrung from compensating at an artificially high rate-- e.g., because of budget constraints in the public sector or product market competition in the private sector. That's why government is often encouraged by cartels (as special interest groups) to restrict their competition in product or labor markets, to engage in crony capitalism on their behalf at the expense of the general public.

2.) Is it good for society for X's to form a cartel/union-- in terms of equity (fairness) and efficiency (good for economic growth, society as a whole, etc.)? Unlikely, in a modern, reasonably-developed economy. Why? Because the norm in those settings is competitive labor markets. If workers are relatively free to shop around their skills, then a competitive labor market will take care of them. Even though employers would love to under-compensate, they won't be able to do so, given the presence of many employers. (Why don't engineers get paid $10/hour?) This is akin to competition in product markets-- where firms would love to charge higher prices, allow lower quality, etc., but cannot do so in a competitive environment.

That said, as labor market are less competitive, then a union can be helpful-- in both equity and efficiency terms. Here, think about the Polish labor unions bargaining with a Communist government as a terrific/clear example-- or American baseball players before "free agency". As "monopsony" power for firms increases, the door opens wider for unions to be effective and equitable.

So, how do we know? Two relatively easy tests come to mind. First, you can think through the labor market options for most of the affected workers. If they have few options, then they are more vulnerable, more prone to under-compensation, etc. Second, if you see the cartel using government to lock out competitors, then it's not monopoly power being used against them; it's their (ironic and cynical) pursuit of monopoly power instead.

Finally, so what about adjuncts and grad students? Unless they're in a large city, adjuncts have relatively few options-- in academia. But given their intellect and broad skills (right?), they (should) have many options outside of academia. Whatever the level of monopoly power in this market, it's certainly wisdom for them to have/pursue non-academic jobs and only adjunct on the side.

Grad students generally have a number of options as they enter grad school. (There are certainly exceptions for those who want to enter more specialized fields.) Once they're in a program, it becomes more difficult to leave, increasing the monopoly power of the school/employer. Then again, i
f a school (or even a department) is routinely taking advantage of students, their reputation should take a hit, harming them in the future. That said, wisdom here would be for prospective grad students to research their options thoroughly-- in particular, asking current students how they're being treated as teaching assistants and as they write their dissertations.


At May 15, 2015 at 10:45 PM , Blogger Unknown said...

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At June 9, 2015 at 2:08 AM , Blogger Unknown said...

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