Sunday, May 23, 2010

UPS Bailout?

The House is going to "bail out" UPS and the Tea Party, fed up will bailouts, is leading the charge against government malfeasance. (Watch the video. It's a great parody.)

Well, almost. The site I linked was paid for by FedEx, UPS's chief rival. It's astroturf, not grassroots. I don't know where the Tea Party stands on this issue (I'm sure I can guess), but I think they're too busy trying to destroy the Federal Reserve to care.

So what is the real issue here? This WSJ editorial lays it out pretty clear. FedEx is regulated by one bill that, to prevent strikes from disrupting the economy, requires unionization at the national level. This has allowed FedEx to keep from being unionized. UPS is regulated by another, which has allowed the Teamsters to unionize most (all?) of the UPS truck drivers.

A lot of people assume that the issue here is "what is the right classification for these companies?" but that misses the point by a mile. The two types of regulations are just mechanism for regulating unionization. The basic philosophical point is what "rights" do people have to unionize. But that question is as retarded as it sounds: the right amount of unionization is the one that makes society happiness (and healthiest).

So will expanding the Teamsters make society a better place?

I used to be pro-big labor. But I'm not so much anymore. Most of it probably has to do with the damage teachers unions are doing to our schools. But part of the switch has to do with my interest in institutional economics. Unions seem to drive up wages for the middle class. But they do so at the expense of the poorest and probably by driving up unemployment--esp. in recessions. Unemployment is crippling to people's happiness while higher incomes seems to do little. Higher inequality might be bad but we don't know how bad. And isn't it possible that unions are as much a cause as a by-product of the fact that people become so depressed when they get laid off?

People in this country are miserable when they lose their jobs not so much because they end up on skid row, trying to find their next meal, praying for brighter days. They don't end up poor most of the time. They become depressed because they feel a loss of identity and friends. The friends part seems natural, people need a social circle. But why do people feel so tied to their jobs? Wouldn't a more fluid (less unionized) labor market help promote a more healthy view of a job as just a job, not as your life's work and the center of your universe?

So I have mixed feelings about the Brown Bailout. I won't sign the petition because I'm "pro-labor." Yet I feel about as "pro-labor" as I do "pro-choice."

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