This is not a post that is likely to win me a lot of friends. But the goal of this post is not to make enemies but to point out limitations. You see a while back a friend of mine asked me a question about unions. He asked me why unions had to force membership on all workers. It is a good question, unions for the most part force membership on its members. I have another friend who asked why liberals, who are in favor of increased taxes, don’t just voluntarily pay more. This is another decent question, if I as a liberal feel so strongly about increasing the revenue of the government why don’t I just do my part to add more to the government coffers voluntarily? The question is though is volunteering such a good thing? Don’t get me wrong, I’m not against volunteerism. I just wonder if it is the best way to set up our society.
The Fallacy of Charitable Giving
My grandfather was not a fan of the churches on 125th street in Harlem. He didn’t have a problem with church or religion per se, but he did have a problem with the number of churches. He felt that all the money collected from the poor community by the church was doing more harm than good. In essence he was pointing out that several individual entities serving one community can result in a duplication of effort, without necessarily increased success. Now some amongst you might be thinking that multiple entities striving for the same goal sounds like competition. This is true they are competing for the resources of the community; however the incentive structure is entirely different for churches, or for that matter any charitable organization then it is for more traditional markets. Charities are not profit driven; in fact, failing charities are often able to increase donations by pointing out that they are on the verge of extinction. This means there is often little reckoning for poorly managed charities as long as the donors are unaware of the organizations short comings. A good example of this is the Susan B Komen organization, one controversy surrounding the breast cancer awareness organization is that the branding has been hijacked by corporate sponsors who give very little to the organization in exchange for the massive positive publicity they receive.
The Uncertainty Problem
The most obvious problem with relying on volunteers is the uncertainty of their participation. From a simple logistics stand point if you are running an organization that relies on volunteers you have to budget resources based on assumptions. This is okay for short term projects that last a few months or at most a year maybe. Arranging for that kind of commitment is difficult but manageable. But imagine a multi-year project. In fact you don’t have to imagine you can look up volunteer efforts in third world countries like Haiti. In areas like Haiti there is a desperate need for the fundamental infrastructure of modern society. This has been the case for decades, but the not too long ago earthquake only exacerbated this need. After the earthquake though there was tremendous outpouring of relief efforts. Not to be crass but it became in vogue to throw a save Haiti fund raiser. Two years later though while there are still efforts to support the rebuilding of Haiti, with tragedies all over the world the popularity of Haitian relief efforts has waned. This has left many efforts to rebuild half started much less finished. The reason is simple, while it is easy to devote a day, a month, or even a year to a cause you believe in without compensation eventually you have bills to pay, a family to feed, and a life to live outside of your charitable cause. As a result people need to be hired to do the actual work, and those people need to be paid regularly, and volunteered money is a very difficult way to make sure that happens.
The PBS Tote Bag Conundrum
I can already hear people saying but wait there are a ton of charitable organizations, people have careers in volunteer organizations, and there are systems that work. Again, this is not a knock on charities, or volunteerism. These organizations strengthen ties to communities, build empathy, and have other numerous other benefits that for lack of a better term I will call soft benefits. However, when you look at the dollar for dollar economic models, and ask should we orient our society this way there are limitations. One limitation is the need for short term tangible results. Without a stable multiyear revenue stream organizations must limit their scope to what is achievable to what resources they have on hand at the time. To put this in perspective imagine getting rid of student loans, and expecting high school students to personally pay for their college education. This would most certainly change the number of people beginning careers in the medical profession given the payback period is on the order of 20 years. On the other hand organizations like PBS and NPR have been around for decades based mostly on the generosity of its donors. While this is true, this also has limitations that are salient. Organizations like PBS and NPR have learned over the years that in order to continue to receive donations they often have to incentivize the donation by offering tote bags filled with stuff. These things obviously aren’t free and the cost of these items needs to be accounted for. Now to be clear all organizations have operational overhead, i.e. the cost of keeping the lights on, but these aren’t overhead costs these are the cost of giving away gifts.
Americans are Horrible at Assessing Long Term Risks
Few things are greater to the core to understanding and shaping a society than understanding one aspect of Americanism. This is part of the perversion of the American Dream. Since America is the land of opportunity, everyone will be given a shot at prosperity. As a result Americans are always of the belief that tomorrow will be the start of their new and infinitely better life. For the most part I think this has mostly positive consequences, it creates a spirit of invention and innovation that is probably key to our ability to stay at the top of development. However this almost blind optimism has the side effect that very few people worry about long term problems.
This inability to measure risk is important to understanding unions. Contrary to popular belief the days of overpowered unions disappeared back in the 80s. Unions these days are in a constant struggle to maintain existence let alone demand major concessions from management. The last thirty years of organized labor has been a steady stream of give backs, with few outliners of significant gains in compensation for their members. The success of the auto bail out a few years back is in part due to the major concessions and sacrifices labor made in order to help maintain their industry. However the purpose of the union is not to merely continually push for increased compensation. It is to ensure that members receive equitable treatment from management. This is where the lack of risk assessment comes into play. Very few people believe they will be unfairly targeted by management during their career. Therefore why would they need to be a part of a union who, as many believe, act as a protection racket for bad employees? The problem is what if management does treat you unfairly? Don’t get me wrong, I know many members of unions act irresponsibly, just like many people in general act irresponsibly (including people in management). The role of the union is not to protect irresponsible behavior, but to ensure that management takes the steps necessary to actually determine that irresponsible behavior took place. This can only be accomplished if labor is organized.
Right to Hire
The alternative is something called “right to work.” The innocuous phrasing is supposed to evoke a sense of wrong doing by unions on independent workers. The idea being that though you are able bodied and capable you will be denied the ability to work by the union. At least that is how it is sold. It should, however be understood as “right to hire.” What right to work does is allow management a method of undermining this majority. It allows management to hire people not bound by the union agreement and exert pressure on these hires to prevent them from joining the union. Non-union workers get all the benefits the union has fought for without paying the dues that allow the union to sustain itself to obtain those benefits. So the calculation is simple for the average worker, pay to be seen as against management’s goals, or don’t pay and lose … nothing. At least at first, because that’s the thing this is a knowable experiment, places that have implemented right to work have seen wages fall after implementation. Still should people be forced into membership? People tend to overlook that unions are democratic bodies. From there formation throughout their continued existence this will always be the case. The decisions made by the union, for good or ill, represent the majority. If the union is damaging to its members then the union members have the power to change it.
This brings us to the most recent case of unions “hurting” workers. When Hostess announced it would be filling for bankruptcy they claimed striking workers as the reason the 90+ year old company would cease to be. While it is convenient to blame the union for the job losses of its members, it is important to note that 92% of the union voted to strike. Delving into the details of the dispute it is easy to see why. Management wanted the union to agree to a 32 percent pay cut over five years. This is on top a previous pay cut a few years back, and management deciding to no longer contribute to the pension system. This was not a case of unions bullying to the detriment of its members. No, this was the story of a failing company grasping at straws to maintain solvency by imposing brutal cuts on labor. Right to work would not have kept Hostess going, at least not to the benefit of its workforce.
The Engagement Deficit
There is one aspect of our government that does rely heavily on volunteerism, Our Military. Far be it from me to cast aspersions on the quality of work performed by our soldiers. Quite the contrary, I’d be hard pressed to point to a group that achieves their level of professionalism. That said I would say their volunteer nature changes the jobs they are assigned to perform. The war in Afghanistan is the longest ground force engagement in US military history, and only 1% of the population participated in the conflict. Because they represent such a small portion of society the decision of when and how we decide to end the war is merely a red herring for politicians to use because few Americans are truly engaged in the activities of our military. We acknowledge their sacrifice, but it’s just that, their sacrifice. Given how long the conflict has gone on there are few people who spend more than a moment thinking about it because they do not have to worry about it becoming their sacrifice. This lack of engagement from the public leaves the decision makers for military action with little responsibility to achieve tangible results in reasonable time frames. In America there is very little downside politically for military excess and this is not only bad for our government in terms of spending; it is bad in terms of our moral standing.
The Soft Benefits of Giving
I am all for looking at the systems, structures and institutions that have been created over the centuries of societal evolution and asking should we keep them. That is the point of this site. I think there are weaknesses throughout the system and the only way we can uncover them is to be willing to look at them through fresh eyes and ask if they are needed and if so how can we make them better. I think charitable giving helps millions across the world. I don’t think AIDS research would be where it is without charities for instance. I don’t however feel that we should set up our society to work like the Museum of Natural History in a pay what you wish fashion. I think this changes the dynamics of society because the people who give a lot expect a lot more of their wishes granted specifically because they don’t have to give, while the people who give little or nothing are completely unengaged. In fact this is precisely what is wrong with the way we allow politicians to campaign for office, but that will have to be saved for another post.