Unions

This week, unions were in the news. The issue of unions is complex. On one hand, unions have helped employee rights over time and prevented some companies from overstepping their boundaries as reasonable employers. On the other hand, unions have also done a lot to damage American business by demanding more than companies should be required to provide. When unions call for a strike, it's sometimes nothing more than extortion and when they force employees to join and pay dues even when it's only optional, it's like paying protection money. This is not to mention the historical links between some unions and organized crime or the hard core political activism of unions on behalf of members, regardless of the members' real political affiliations.

A just issue brought up by the Hollywood unions this week regarding how the studios sort of forgot to include the actual talent in the profit-sharing when video content is purchased from iTunes (see Unions seek video iPod residuals).

Verrone said he and Connolly immediately realized that they, as well as Directors Guild of America, Screen Actors Guild and WGA East, need to "ensure that this new distribution system is covered by the appropriate formulas in our respective contracts."

WGAW continues to believe that the proper formula is the existing one covering pay television. That entitles writers to 1.2% of the entire producers' gross. DGA has an identical formula, while SAG gets 3.6% and the International Alliance of Theatrical Stage Employees (IATSE) gets 5.4%.

It's amazing that the legal snipers at ABC didn't notice the absence of residuals for the creatives before the contracts with Apple were signed. It's likely ABC wanted to see what would happen if they completely ignored it. Can you see some attorney smirking as he says, "What if they don't notice?"

As if.

Hollywood business is different than any other industry. Aside from the entertainment industry, I don't think employees who contribute to products or services get residuals when a product is used. Honestly, I'd love to get a check every time a user manual I wrote is copied. Not too long ago, a friend of mine who worked at a bank where I worked more than ten years ago said they were still using policies and procedures I wrote. Where are my residuals? While I think this approach to income is a little out of touch with the rest of the world, Hollywood does a lot of things right. If you want to know how to run a project, look at how movies are made. Plus writers, actors, and other creatives do get rewarded for their hard work--especially when a project is successful.

Now go to Detroit and look at what's happening to Delphi. Especially in the auto industry, unions have become their own worst enemy. A good roundup of Delphi's woes are summed up in this editorial.

DOMESTIC AUTOMAKERS have had to pay off the UAW for productivity improvements--more automation, flexible job rules and job cuts--which were needed to compete with foreign competitors. This invariably required putting more people on the private dole.

...

This kind of welfare was tolerable when the Big Three automakers dominated the market. But GM, which once claimed 50 percent of the American market, is clinging to about 26 percent today. Even during what is supposed to be an economic recovery, automakers and their suppliers are struggling; GM lost $1.6 billion in the third quarter alone. Ford lost $284 million overall in the third quarter, with its North American auto operations losing $1.3 billion. And both Ford and GM say they plan to cut more factories.

GENERAL MOTORS has a more perilous situation than Social Security. At least that federal program can claim three workers for every retiree. GM has more than three times as many retirees and dependents as it has workers. Delphi's Miller and the Bank of America warn that GM eventually could go bankrupt.

Go read the whole thing. It puts in perspective the out-of-control expectations of unions. Part of this is a cultural problem. Big business has been so demonized in books, movies, and in the press, it's nearly impossible to understand that a company the size of GM, for example, could have real financial problems. The workers see them as this infinite behemoth that will keep feeding them until they pass away during old age. At the same time, many of us in the non-union world have learned the hard way that you cannot count on companies for much more than a paycheck. Benefits are getting cut each year and any kind of retirement I had has been decimated by two layoffs. Retirement, healthcare, and other benefits traditionally provided by employers are actually beginning to strain companies. Unions can strike as much as they want, but eventually the numbers dictate the situation. Delphi filed bankruptcy because the money just isn't there. As for the high cost of healthcare, I'll save that for another article.

Is there a place in the twenty-first century for unions? Of course. However, their relevancy will be determined by how reasonable they will be when the employees are genuinely getting the shaft.

Popularity: 1% [?]