Solidarity and Making Things People Want

In These Times publishes an excerpt from American labor lawyer Thomas Gheoghegan's new encomium to social democracy, Were You Born on the Wrong Continent?, which I've blogged about before:

It’s no accident that the social democracies — Sweden, France and Germany, who kept on paying high wages — now have more industry than the United States or the UK. During the ’70s, ’80s and ’90s, the Anglo-Americans, the neoliberals, The Economist crowd, and the press generally, would taunt the social democrats in Europe: “You’d better break the unions.” That’s the way to save your industry.

Indeed, that’s what the United States and the UK did: They smashed the unions, in the belief that they had to compete on cost. The result? They quickly ended up wrecking their industrial base. But Germany, Sweden and France ignored the advice of the Anglo-Americans, the Financial Times elite, the banking industry: Contrary to what they were told to do, they did not wreck their unions.

And it was the high labor cost that pushed those countries into making higher “value-added” things. Where is Germany competitive? It’s in high-end, precision machinery, made by people with the highest skills. It’s in engineering services. People look at Germany and say, “What about the German unemployment?” But no one in the United States ever says, “What about the German labor shortages?”

Even in 2008, precisely because of “globalization,” Germany had a serious shortage of people able to fill high-skill, high-paying jobs, especially engineers. In the United States, engineers complain they can’t find work; many of them just end up in sales. In the union-free, lower-cost United States, we don’t create the kind of jobs engineers can do. Germany’s problem? It has too many such jobs. It’s our whole globalization thesis turned upside down.

That leads to a seeming paradox: Higher labor costs can make a country more, not less, competitive. In many ways, the United States and the UK got out of manufacturing because their labor costs were too low. I have spent my life watching plants close in Milwaukee and Waukegan, where skilled labor was paid $26 an hour, only to reopen in Georgia and North Carolina, where it was paid $8 an hour. While still fighting over severance two years later, we get the news: The company is bankrupt. The products it makes so cheaply are now crap.

In another part of the article, Gheogegan points to the fact that tens of thousands of young apprentices in skilled trades are eagerly joining German unions and protesting with their older comrades. It's called solidarity, a concept that has become almost irrelevant in the U.S.

Not so in Germany. Just last Tuesday, there was a warning strike on railroad wages -- Germany's (relatively few) private train companies want to continue paying their workers 20% less than unionized employees of the national train company Deutsche Bahn, but the transport union's having none of it. Therefore, train workers all over the country went on strike for an industry-wide wage agreement. Most of the strikers were Deutsche Bahn workers -- who, let it be remembered, are already getting the higher pay.

Now, of course their striking was also motivated by self-interest, since they know their wages will face pressure from below if the railroad industry succeeds in fragmenting workers. But still, it shows these workers, unlike their American colleagues, haven't forgotten that solidarity is the only counterweight to the concentrated power of employers. Plus, these strikes work (g) -- Deutsche Bahn usually has to provide wage increases substantially higher than its opening offer.

Will this lead to higher fares? Perhaps, but then again, so do hideously expensive prestige projects for which the Bahn is infamous.¹ And even if fares rise somewhat, it's pointless to complain about that unless you're willing to put up with the sort of train service you get when unions are crushed and the national rail network is split up and sold. England provides a useful example (pdf):

The consequences have been vividly described in the Financial Times, a newspaper not noted for its hostility to privatisation: 'The first consequence was the breakdown of the old comradeship, which used to mean that problems were easily spotted, repairs made, and people could talk to each other. Track workers operated in gangs and knew their stretch of rails like their own back gardens. Instead, workers became nomadic, moving to the next job with little or no local knowledge and instructions not to talk to rival workers except via a supervisor miles away. The second big problem was a growing lack of control over the staff and their work. There have been complaints of sub-contractors recruiting workers out of pubs to fill gaps on the night shift.'

¹

Comments

[peter]

hey andrew,
haven't read it yet, but tony judt's "ill fares the land" tries to drive home a similar point (social democracy, that is). though he might argue a bit more elegantly than gheoghegan, who, at times, is a bit of a chatterbox (i read the book).

the first chapter of judt's book is online at the nyt: http://www.nytimes.com/2010/03/17/books/excerpt-ill-fares-the-land.html?pagewanted=1&_r=1

[Clara]

just saw the video - "Verkehrsexperte"?
What kind of job is that?
Can't people be a bit more precise?

[Buy Online Rx]

I spent six months in Europe with nothing but what I could fit into one carry-on bag and a small shoulder bag. Everything else went into storage. And quite of the few of the things that started out in that carry-on bag got mailed back to the States because I just got tired of carrying them.

[John]

What Andrew said.

Die Zeit, by the way, had a nice article confronting the (typically German) kvetching about the current recovery.

Haters gonna hate.

[Andrew]

Oh, and one other thing: People who post comments anonymously shouldn't engage in ad hominem arguments. It's bad form.

[Andrew]

@Anonymous: Your point is that compared to Paradise, German society leaves a lot to be desired. A comparison beloved of many Germans! I'm in 100% agreement there, as is Gheogegan.

Gheogegan's point is that compared to really-existing, here-and-now Germany, American society leaves a lot to be desired. I think his point stands, despite the obvious caveats. There are, of course, plenty of Germans suffering economic hardship, but 'economic hardship' means something very different in the U.S. than in Germany, no?

As for the German education system, it also leaves much to be desired compared to some refulgent, Platonic ideal. But have you noticed that the American educational system is also beset by gigantic problems? Have you seen the budget of the University of California system lately? Paid any American college tuition fees? Visited any crumbling inner-city schools?

Of course, my perspective is that of a professor. Yet, the students I teach aren't being sent out into a dismal job market with $60,000 of loans hanging over their heads like a proverbial Damoclean sword. I also enjoy a lot of job security, and am pretty privileged in that regard. But most Germans with full-time employment also enjoy a level of job security that nobody in America gets. And as for those Germans who don't, I wish the same level of job security for them. Which is why I support unions!

[Anonymous]

At the moment, the German economy is booming and skilled workers are in demand, but mainly because of Asian, primarily Chinese, imports of German manufactured goods. Not because of purported "solidarity" or labor unions.

Sooner or later the shit's going to hit the fan because of the aging German population, Germany's weakening educational system, and industrial competition, including in production of machinery and other capital goods, of Asians and others, who are buying BMWs now but will produce their own and other value-added products like solar cells later on, which will result in reverse trade flows.

The U.S. does need better economic mechanisms ensuring fairer distribution of wealth; unions could and should play a role.

But I don't see much hope in German trade unions like Ver.di that extort higher wages and other benefits from their employers at the cost of other labor groups.

You are securely ensconced in your civil-servant-like university position; don't assume that the rest of German society is enjoying the same privilege; the reality is that the number of Germans suffering economic hardship is large and is increasing. For them, to speak of "soldarity" is absolute mockery.