Unions and Corporations
So I support unions, even government unions, because in the system we have there is no reason not to support unions. We accept all sorts of economic distortions. Corporations are legal entities, sanctioned by the state. Why should we be any less sanguine about unions than about corporations? Corporations pool capital and resources, unions pool labor. What’s the difference?
It’s the cronyism and protectionism that irks me, and any institution – union, corporation, non-profit – can have a hand in that. So our critique should be broad enough to not set unions up as some sort of anomaly.
We should also be wary of unions the same way we’re wary of corporations. Power is power after all. I think we can be critical of unions and still support them, much as we can be critical of corporations and still basically believe that corporations have a role to play in the economy.
We should support the reform of unions and corporations as well, working to transform them into more fluid entities. A highly decentralized economy is a good thing, but it requires change. Progress even. It probably also requires something like single-payer health insurance because right now we’re all slaves to our employer-provided healthcare.
And hell, union members are also sort of bound to their union-negotiated healthcare. And we could probably move to single payer and still run a cheaper, more efficient healthcare system. So everybody wins!
How about we get to the point where the GOP politicos can bitchslap corporations with as little trouble as Democratic politicos bitchslap unions, then we can worry about the “power” that unions hold?Report
This is actually a really good point dressed up in hyperbole.Report
Is that just a name you made up or are you named after Stillwater, OK?Report
It probably also requires something like single-payer health insurance because right now we’re all slaves to our employer-provided healthcare.
I’m not. I quit my job some time back and purchased insurance on the individual market. My premium is under $100 a month. I’m only 30, and I get that it’s more for older people or people with pre-existing conditions, but it could go up severalfold and still be a fairly small percentage of my total living expenses. Of course, if I were older, I’d have more money saved up.
The idea that health insurance is the main reason people can’t quit their jobs strikes me as silly. The biggest problem with not having a job is that you don’t have an income, not that you don’t get a health insurance subsidy worth a fraction of that income you aren’t getting.Report
Unless you’d been sick, or had been older but didn’t have money saved up.Report
If I didn’t have any money saved up, then I wouldn’t be able to pay any of my other living expenses, either.
My point is that for all but the very ill, health insurance premiums are a tiny to smallish fraction of total living expenses. The idea that health insurance is a unique obstacle to entrepreneurialism seems to me to be on very shaky ground. Do you also think that we need single-payer housing and single-payer food?Report
I respectfully submit that your experience is limited. What’s your industry? Are you single?Report
Or had kids, or a wife who was dependent on it. That Brandon doesn’t “get it” doesn’t change reality. It’s nice, though, that he was able to find cheap insurance. I do wonder what his deductibles/copays are, and how he affords $100 + many times that (since his $100 is a fraction of his monthly expenses) without a job.Report
At $100/month, I have to seriously wonder about the level of coverage you’re receiving.
Before making sweeping conclusions like your final paragraph, you might check into the cost of an individual policy for a married couple with one or more kids that’s as comprehensive as a typical employer-sponsored plan.
As a professional in my 40s with a wife and kid, the presence or absence of employer-provided health insurance is a *huge* factor in my choice of employer, and pretty much eliminates self-employment as an option.Report
The coverage is adequate for my needs. There’s a $3500 deductible and $5000 out-of-pocket limit, which is fine because I want insurance, not a middleman for routine expenses. And the premium is actually offset by the tax savings for the HSA the plan qualifies me for, so I’m basically getting the insurance for free.
Have you actually researched the cost of obtaining health insurance on the individual market? What would it cost you, as a percentage of the total of your other living expenses?Report
Looking it up online, a plan roughly equivalent to my current employer-sponsored plan, to which I contribute around $200/month, would cost just under $1,700/month.
A $1500/month surcharge to work at a startup or go self-employed is a significant disincentive. It does appear that I could cut that surcharge roughly in half if I’m willing to go your route of a high-deductible-plus-HSA plan and jump through all the extra bureaucratic hoops and record-keeping that entails, but either way I would take a significant hit to net income without employer-provided health insurance.Report
That’s about what I expected. Maybe a bit more. I don’t really see that it invalidates anything I’ve said in this thread.
First off, you seem to be assuming that if you were self-employed, you’d be making what you make now, only without the health insurance. I don’t see any reason to expect that particular outcome. It’s not like your employer gives you an insurance subsidy as a gift because you’re such a swell guy. As part of your total compensation package, it comes out of your cash income.
Assuming that you’d be just as productive on your own, you should expect to make as cash what your current employer is paying for your health insurance. Of course, in reality you might be significantly more or less productive, and you probably don’t know for sure what you’d actually be making. I mean, unless the nature of the market for whatever you do is such that you can accurately predict what your income would be if you were self-employed.
Really, though, I would think that the uncertainty about how much you’d be making if you were self-employed should be a bigger factor than the health insurance costs.Report
You really think income is directly proportional, or even strongly tied, to productivity?
In my field, going self-employed or working at a startup would entail a significant income cut initially in favor of the potential for much larger gains in the future.
Without arguing my anecdotal situation further, your previous assertion that health insurance is not a significant factor in people’s employment decisions is just plain incorrect. The cost differential in the individual market does provide a strong disincentive for many people, particularly those with families or chronic medical conditions (even non-serious, treatable ones).Report
But this isn’t an option for all fields of work. I’m a teacher. I can’t start my own school. I suppose I could go the “mercenary” route and negotiate year-to-year with my current or new schools, eschewing the traditional contracts they use but, I have yet to find a school that function in this way (and I’ve only worked in privates, so there is no union to speak of). My last two schools have actually required that I have insurance, one way or another. In part because they have a strong incentive for me to be healthy (if I get sick, they still have to pay me and pay a sub) and because they offer the money they would put towards my insurance as salary if I don’t use it, but they don’t want people forgoing insurance for a salary bump (because of the aforementioned problem). So, not everyone has the options you suggest, not without making major other changes to their lives/careers, all of which are likely detrimental, at least short term, to income.Report
If self-employment isn’t an option for you, then my comment wasn’t about you. I was specifically responding to the claim that the cost of health insurance is a particularly insurmountable barrier to entrepreneurialism.Report
… the cost of not having health insurance IS much more of a barrier than the actual cost of health insurance.
I claim that many people do not qualify for private health insurance (including people with a history of visiting psychologists).
But any barrier to entrepreneurs is tough, when you’re starting up. $1500 a month may not seem like much, but… many startups don’t make a profit for years…Report
“I’m a teacher. I can’t start my own school.”
Could you provide private tutoring services, or hire yourself as a consultant to homeschoolers who lack subject-matter expertise?Report
Brandon, for any woman who has had a c-section, the cost is infinite. Preexisting conditions are a reason for termination of contract.Report
It might be impossible for someone who’s older and with certain pre-existing conditions to get insurance at any price.Report
In the state of Washington, at least, I don’t think insurers are even allowed to ask about pre-existing conditions if you’ve maintained uninterrupted coverage. And all states have COBRA, and most have high-risk pools for people who have been denied insurance on the individual market.
And really, how many people meet all of the following criteria?
1. Can’t obtain health insurance on the individual market.
2. Are healthy enough to start a business.
3. Want to start a business.
4. Are ineligible for COBRA coverage due to employer size.
5. Live in states which do not have high-risk pools and which permit insurers to ask about pre-existing conditions for people with continuous coverage.
I can see how people who already think that single-payer health care is a great idea might regard this as a killer argument in its favor. But there are solutions to this problem that don’t involve socializing the entire health insurance industry.Report
Are you sure that applies to individual coverage? PECs never matter with group plans so long as you have uninterrupted coverage, but I’ve never heard of that with individual plans. I can actually think of scenarios where it would be unfair to insurance companies for this to be the case (get low-grade coverage until you need expensive medication, then change carriers with a more comprehensive plan).Report
I did some more research, and it turns out that Washington’s in the minority on this. All but a handful of states do allow insurers to ask about pre-existing conditions, even for those who’ve maintained continuous coverage.Report
In Michigan they can ask you, but they cannot deny you based on it. However they can charge you more if you have PEC’s, which as a totally unemotional math teacher I can understand given that PEC’s are known quantities that are ~going~ to cost money and cost it ~now~.
Anyone can get diabetes. Let’s say that it’s 30%. So that means you have to charge people who don’t have it around a third of the cost of treating it to ensure that you have enough money in the pot for when one of them ~does~ get it eventually. But with a PEC you’ve got a 100% chance that that person has that condition and so you need to be sure that there’s money to treat it.
The only way around that is to have a system, insurance or otherwise, where everyone pays the same ammount regardless of health risks, life’s history, and family medical, lifestlye, etc.Report
since when does a c-section 20 years ago cost you money now? Since when does a miscarriage 20 years ago cost you money now? Since when does a history of Major Depression cost you money now?Report
It doesn’t cost the money now, but it increases the likelihood – if only by correlation – that it will cost them money in the future. Not unlike how a bad credit history doesn’t cost auto insurers any money if you’re paying up front, but it correlates with the likelihood that you will get into an accident or otherwise make a claim, which is why insurance companies charge people with bad credit more. I’m not defending the practice on fairness (to the consumer) grounds, and in fact I think the practice should be banned or at least made a lot more transparent when it comes to credit/auto, but it sort of makes sense in its own way.Report
yeah. it makes them money (corporations are clever like that, also immoral). just like having a red car in your past means that you pay more on auto insurance.Report
While I won’t comment on the morality of it, I can say that at the end of the day it’s the job of corporations, profit or non profit, to not go broke. At the very least, a non profit health insurer such as Michigan BC/BS has to be sure that when they assign someone a premium that those premiums total out to what they’re going to spend that year on people’s care.
So they do a LOT of stastitics. They look at a LOT of factors. They try to figure out how much they’re going to spend, and on whom, and then spread it around as best they can.
The thing is if they don’t try to charge some people more, such as asking smokers to pay a higher premium do to an increased risk of cancer, then those who do live healthy lives a) pay more than they otherwise would to be sure there’s enough money in the pot and b) complain about having to pay for other people’s bad life choices.
Which itself isn’t totally fair. Few women have the kind of control over a vaginal birth vs Cesarean. It’s kinda up to the baby what’s happening there, having been there when the choice was made with my son. So you can’t ~blame~ them for it, and it seems horrible penalize them with higher rates since men don’t usually need to get any kind of such procedure done. But this opens a totally different debate:
What factors are we allowed to morally consider? Or are there none and everyone, regardless of lifestyle, history, family, and personal choices, should simply pay the same flat premium as everyone else? Because at the end of the day, the $ in has to at least match the $ out….Report
Again, you ignore people who work in industries that prevent or severely limit the opportunity to start their own business. There is also a limit to how many “small businesses” a society or community can support. If every construction worker decided to open his own construction business, the market would become over-saturated and would not be able to support all of them. You could call that the “free market at work” but, regardless of what you call it, it demonstrates the limitations on people to take the route you have.Report
Brandon, I like single payer. I want a better solution. But having a c-section 20 years ago is a preexisting condition. And COBRA costs 1000 at LEAST.
It was my udnerstanding that all states allow companies to ask about pre-existing conditions if you’re not getting group insurance. I don’t live in washington.Report
The cost of COBRA depends almost entirely on how much you and your employer were paying before (there can only be a marginal administrative upcharge on top of that). Outside of that, it’s not really a set amount. My personal coverage on COBRA last time around was about $350/mo. My wife’s was closer to $600 from her job. Obviously, it easily enters four digits when a couple and kids are involved. And I would imagine in some parts of the country it may be that way for only one person if it’s a place where health insurance is expensive. My COBRA insurance was out of a southern state (I wasn’t living in said southern state, but my employer was based out of it) and my wife’s was in the Pacific Northwest (where we were living). So it’s going to vary.
The second big problem with using COBRA when starting your own business is, the first being that comprehensive insurance is expensive to begin with, is the general lack of flexibility. You’re limited to whatever options your previous employer provided. So in addition to comprehensive insurance being expensive, you can’t easily change to catastrophic insurance unless you live in a place apparently like Washington where they can’t ask about PEC’s (and you’ve had continuous coverage).Report
I think on the whole people who keep their jobs for the health insurance have children or spouses in mind—or are sick or with a preexisting condition.
Maybe you’re just way smarter than everyone else though.Report
See my other comments in this thread for a response to your first paragraph.
Maybe you’re just way smarter than everyone else though.
Apparently you and Corey Robin think so.Report
On vacation these past two weeks and have been checking in sporadilly, but I couldn’t this slip by.
Almost all group insurance programs I am aware of are somewhere between $500-700 per month if you include the employer paid portion. I’m not sure the conditions surrounding your coverage, but suspect it is not actually this cheap – unless you are in something like a catostrophic tporary policy, which is common for young people between jobs but does not require renewability.Report
The biggest problem with not having a job is that you don’t have an income, not that you don’t get a health insurance subsidy worth a fraction of that income you aren’t getting.
I read the comment, but this (quoted above) seems to be the extent of your argument.
Is it really this thin? This entirely reverses the traditional horse/cart ordering of things. If people find themselves in such dire straits that an income of any kind is more important than health insurance, the system has already failed not only them but everyone who is an observer of that situation.Report
yawn.
Person A quits his job to start a small business. Except he don’t, because he can’t get private health insurance, so he would die from lack of cheap insulin/HIV drugs/etc.
Person B wants to be a writer! Except she hears about all the writers’ inability to stave off medical expenses, thus causing the deaths of either themselves or their loved ones. (we’re talking good, published writers here, the kind who write books.)Report
Lots of writers (even professional ones) have other jobs.
Very very few make it to the level where writing is all they do for a living.
Go to a writer’s workshop sometime. Very often the first words you hear are “Don’t quit your day job”.
See also musicians.Report
… yes, because the ones that don’t have day jobs die. or their wives do, and then they stop writing. I’m referencing particular people here, some of which are quite recently dead. (not that that statement is intended to imply that you’ve been oblivious, because you haven’t.).
I would like to make the point that if writers could write for a living, without fear of healthcare problems, we’d get more books and ideas. Which, imho, would be a good thing.Report
I would love to be a full time writer. I do not pursue that because of health care concerns. I do it because I fear an inability to support my family’s other needs such as food and shelter.
Healthcare is actually low on my list of reasons I don’t try to write full time.
However, in the name of full disclosure, one of my (until recently) points of solace with nutty crazy hours during the 10 months I work (because really I work most of June and the last week of August) has been that I have kick-ass health insurance and that itself is “worth” the significant less money I make in salary than my younger sister who has less post HS education by several years yet tops me in salary by 30%.Report
I wonder if you could have widespread unions that also functioned kind of like temp agencies today. You would belong to a union-agency that found you work, helped manage your benefits, ensured your pay, negotiated with potential employers, and helped you deal with abuses when they happen. If a significant chunk of the work force belonged to them, they’d have much more leverage to negotiate wage rates and benefits.Report
I’ve actually been thinking a lot along these lines and have been mulling over a post on the subject. I actually wonder if we’re headed for a future where everyone more-or-less works for an employment agency. Of course, without the leverage you refer to, the agencies are ultimately agents for the employer because they need the employer a lot more than the employer needs them.Report
Of course, without the leverage you refer to, the agencies are ultimately agents for the employer because they need the employer a lot more than the employer needs them.
The leverage could be provided by the unions training and upgrading their workers so that workers remain skilled and outcomepete their competitors. This also has the added benefit of adding flexibility to the workerReport
The thing is… if the unions don’t train them, then they will go into debt training themselves at no cost to the union. Or they won’t, and the union could benefit from the shortage.Report
The main barrier to this is the same problem often encountered with outsourcing and offshoring — the destruction of institutional memory and specific domain expertise.
There are still large numbers of positions where labor isn’t completely fungible with very large transition costs in changing out workers.Report
I think this is true. It sure seems like with somewhat rare exception, employers do not think this is true. Or not true enough to actually act on.Report
+1Report
Woohoo! Someone saw through my ultra-sloppy wording!Report
Sounds like you’re advocating for something more like the medieval trade guild system.
Trade guilds, or their more informal equivalents, have persisted and worked moderately well in certain industries. The non-chain restaurant industry largely functions this way, for example.
There are good reasons trade guilds mostly died with the industrial revolution, though.Report
Actually, this is precisely the type of union that I belong to.
There are several of them.
They are known as “referral locals.” With this type, you receive a referral from a business agent. Last year, I worked for Proctor & Gamble, Ford, Bayer, and WE Energies.
The other type, where you go to apply for a job at a company, is known as a “solicitation local.”
Some unions have both referral locals and solicitation locals.
The same local might operate by referral for some things and solicitation for others.
My union is heavy into maintaining certifications, and the referrals are quite often by requesting specific certs. Some other unions, not so much.Report
because in the system we have there is no reason not to support unions
Certainly misogyny and racism are reasons to not support unions!Report
Not to mention some unions’ association with organized crime.Report
As opposed to corporation’s more recent associations with dictators and death squads?Report
Jesse:
Ah yes, our favorite union violence apologist. Do you ever tire of excusing their actions?Report
Jesse:
Here is another amusing union anecdote.
http://www.reuters.com/article/2011/08/30/us-labor-day-wisconsin-idUSTRE77T64220110830Report
No, I meant as motivating reasons to not support unions.Report
It was funny, to other types of liberals.Report
A hope of mine as an intermediate step was that the kind of insurance or pension benefits that unions fought for would be converted to something that the unions themselves could run, via converting the benefit from the employer to enough money to establish programs outside of any specific company. Not quite sure how to pursue that nowadays though, tbh.Report
My union runs the pension directly. Part of it goes to national, and part of it goes back to the local.
The insurance (ie, health & welfare) is administered through a separate entity. For my local, it’s administered through the National Employee Benefits Association in Jacksonville.
How much is paid in is according to the contract of the presiding jurisdiction. Right now, I’m working through one of the Indiana locals. The H&W portion of the benefits package is $7/hr; $7.18/hr toward the pension. Earlier this year, I was working for one of the Illinois locals. There, it was $4.40/hr in H&W and $8.36/hr toward the pension.
As for the employer, they simply pay it out and wash their hands of it.Report
In this post you advocate single payer as the remedy to our employer-provided healthcare slavery (even though, as you know, the employer-healthcare link is a government induced distortion in the market in the first place.)
I’m interested because I find it hard to dispute the argument in your earlier post that, programs for the poor are poor programs and I do support basic welfare. Following the various links to your thoughts on healthcare I see that you support universal healthcare where the government pays the bills and you desire a system that makes use of a pricing mechanism and that is largely deregulated. But I can’t see how you can have a valid pricing system when someone else is picking up the bill. Or a centralized payment system that isn’t highly regulated. What are your thoughts on how to go single-payer and get the deregulated, price driven system you want?Report
HSA’s a la Singapore. I’ll go into greater detail later.Report
I like that idea, or a version.
You’d have universal catastrophic insurance paid for by the government (probably a mix of federal and state funding, with state administration). That would be coupled with everyone getting an HSA in which part of their taxes are deposited every year, which they can use to pay for costs below a certain point.
If you wanted to, you could go even further and allow people to spend part of their HSA money on supplemental insurance.Report
That sounds like a much better option than the status quo.Report
Just about anything is better than the status quo – except for the things we are most likely to replace the status quo with.Report
Sounds about right.Report
Congratulations, you invented Cat-Health. Which didn’t really go so well.Report
I’d prefer Italy’s system.Report
I suppose the point of the graphic is not that the EPA has regulated jobs out of existence? 🙂Report
Alternatively: Social Realism is PEOPLE! It’s PEOPLE!Report
EDK back on the union train! Good news. Unions aren’t perfections of market efficiency, to be sure. But that isn’t a mark against em. At least if you’re actually keeping score.Report
Presumably, only individuals are “perfections of market efficiency.” Unions, like any collective (including corporations), will reflect market inefficiencies more than they will create them.Report
Exactly, when corporations get together to fix prices that is bad but when people collude to set wages it is good thing. Let ‘s also not forget how unions skew the market when they prevent corps like Boeing from relocating to SC to take advantage of a cheaper labor market to increase efficiencies.Report
… beggar thy neighbor strategies are not to be confused with actually cheaper markets. When you (voluntarily!) pay for something, you’ve got the right to be pissed that they’re stealing your job too.Report
Kim:
No, without union wage extortion in SC, labor is cheaper regardless of any incentives a state gov’t may offer.Report
… because they’re using slave labor? Are you really trying to say that debtors prisons are a good idea?
… or can we just say that some incentives that a state might offer could overcome “union wage increases”?Report
Kim:
Boeing can escape union wage extortion by moving some of its operations to SC which frees up capital for other uses. I’m not sure where you get the debtors prison talk. Why should states subsidize union wage extortion by offering incentives to make up for it?Report
… debtors prisons are being demoed in the south as we speak. coming soon to a plot of land near you!Report
As we all know, if unions ask for higher wages under the threat of striking, it’s extortion.
But, if corporations ask for tax breaks under the threat of moving their business, that’s just capitalism.Report
The solution is simple.
Make the shop in SC a union shop.
Scale would then be according to the contract in place in So. Carolina; still much lower than in Washington.
Alternatively:
Bring in the Steelworkers or the SEIU or someone to organize the shop. Then they could simply pay prevailing wage.Report
The post from E.D. was pretty broad and generic (I suspect on purpose to generate another rowdy League discussion) so I’ll just throw in my two cents:
The biggest problem I have had with unions is that the ones that are catering to low and unskilled workers do nothing to push those workers farther up the food chain. What I have advocated previously is for those unions to form partnerships with trade unions to help move workers OR to create skills training programs to make those low and unskilled workers more valuable within their own industry.Report
Mike:
I agree. E.D. talks about unions reforming themselves but I’ve never seen one do it voluntarily.Report
Union reform does happen from the inside. But, ironically, it’s hard for a democratic union (and most of them are functioning democracies) to reform, because the rank-and-file are, like most people, usually resistant to change until the need for it becomes overwhelmingly obvious.Report
Mr. Levine, is this you? Fascinating inramural union battle.
http://www.uniondemocracy.org/UDR/194-Recording_musicians_clash_inside_AFM.htmReport
That’s me all right. The good news is that the good guys won the next election. So I feel I’ve got some personal basis for stating that union reform can happen.
UDR is a wonderful publication, by the way.Report
http://www.uniondemocracy.org is fascinating for anyone who wants a peek behind union doors. The entrenched Old Guard vs. the insurgents, manipulating the voting rules, the ins vs. the outs.
Congratulations on your victory, Mr. Levine. From what I skimmed, you were the good guys, although I’m sure the other fellows think otherwise.Report
They do. And, to be fair, the positions they took were neither without merit nor completely unprincipled. There were genuinely different concepts of union governance and how to deal with foreign competition in play.Report
Here is another example of union honesty and how they cheat us.
Union leader draws lucrative pension perk based on false information – chicagotribune.com
http://www.chicagotribune.com/news/watchdog/ct-met-pensions-villanova-20110902,0,1997273.storyReport
“Here is another example of union honesty and how they cheat us.”
I always wonder what the point of such anecdotes is. Unions are human enterprises, and as such are flawed. Are unions more morally flawed than large corporations, or universities, or the Catholic Church?
Union finances are far more closely monitored by the government than are the finances of those entities, by the way. I’m president of a very small union (under $150K annual gross revenue), and the DOL came in a couple of years ago and spent several weeks combing through every receipt and every disbursement for the preceding 2 years or so, as part of a routine compliance audit. I don’t see the IRS doing that with churches or small businesses.Report