Friday, May 6, 2011

Faculty Union

The internet is wall papered with rallying cries from pro-union faculty and union employees. In particular one article employs over-the-top and urgent rhetoric "Organize or Die". Before writing this  post my goal was to find one unbiased and well-written piece explaining the United Faculty of Florida (UFF hereafter) saga. No luck. Thus, this abbreviated posting will try to present another side (hopefully in a measured manner). In the past couple weeks FSU faculty have received a flurry of letters, emails, office visits and telephone calls promoting UFF. The reason? House Bill 1023. If UFF does not reach 50% membership among the FSU faculty by July 1, 2011 the UFF-FSU chapter will dissolve.  

The lobbying and promotion have been non-stop ---though the man tonight on the phone indicated UFF would have no problem reaching 50%. The most recent percent membership of UFF-FSU is uncertain although I've heard the numbers are somewhere around 35%. The hustle of the union employees signals a cause for concern. For example, why did the man call me if membership was already certain to exceed 50%. Moreover, why did he insist on debating my reasons for not joining the union? Another signal for concern is that UFF offered to waive all dues for joining faculty (and even made a point to tell people they could retroactively withdraw after July 1, 2011 with no monetary obligation). The hustle and the special offer smack of desperation. But, the union purports to offer a good product:
[We are working] to improve state funding for increased faculty salaries and benefits, working to improve the faculty's role in decision-making on campus, assisting in negotiation of collective bargaining contracts for over 18,000 professionals, protecting academic freedom and tenure, defending faculty rights, influencing the formulation of policy by the governing boards, working for legislation to improve the quality of education in our colleges and universities, and advancing academic excellence. Class load, equipment, salaries, professional advancement, instructional resources---ultimately every decision that affects higher education faculty is either a bargaining issue or a political decision and involves UFF.

With such self-evident benefits people should be lavishing UFF with gratitude. Yet, this union seems to have difficulty achieving membership for half the faculty at left-leaning Florida State University. Odd. 

Before delving into the details of UFF-FSU it will be useful to take a step back and ask about the role of unions in general. The intuition of labor unions is simple: Because no single employee wields significant bargaining power all the decentralized employees become one centralized bargaining agent. Then, that agent essentially acts as a monopoly on the labor supplied in an industry. As mentioned in the block quote, unions usually bargain for pay increases and benefits for their employees (historically in the unions bargained for improved safety regulations ---though not all improvements in safety came at the hands of the union).

The UFF-FSU lobbied contract has several benefits (which the union happily celebrates) but the contract also has costs (which the union is conspicuously silent on). And, I should mention that like most bureaucracies that attempt to convince people of their necessity they sometimes exaggerate their benefits and really diminish their harmfulness. One example of an exaggerated benefit is the UFF claim to "protect tenure". In fact, the UFF-FSU chapter did fight on behalf of some faculty positions that were cut at FSU during the last round of budget cuts. But, this is the exception. In general the protection of tenure does not require a union ---it is the free market and the legal system that protect tenure. Imagine for a moment that FSU decided that it would not honor the hard-earned tenure of many of its faculty. This could seem plausible in a tumultuous budgetary climate; however, FSU will have difficulty attracting and maintaining good professors in the future if tenure is not honored. Also, if a professor is wrongfully terminated they can appeal their case before a judge.

Another exaggerated claim is that funding would disappear without the union. But, with alumni seated in the State House and Senate it is legitimate to ask the question of how much benefit UFF curries FSU with respect to appropriations. But, these kinds of arguments weaken the case for UFF. Thus, they do not appear on their website.

The benefits of the union largely consist in its ability to establish a centralized agent for bargaining and protect faculty members without a valuable outside option. We have already discussed the idea that a centralized agent wields more bargaining power, but, the second part of that statement answers the question, "for whom"? The faculty that most need a centralized bargaining agent are those faculty that do not have many well-paying prospects in the private sector. Economists, for example, have many well-paying prospects consulting for firms or working as an in-house analyst. But, generally speaking, any professor from the Humanities does not have a high-paying outside option. The reason this outside option is important is because it gives the individual more bargaining power. Anytime someone can come to the bargaining table and say, "You need me more than I need you", they are in better position to obtain benefits.

The costs of UFF are concentrated on our best and brightest faculty. The economics department will be losing two of our faculty in the fall to other universities. Also, the business school will lose five faculty. One negotiated "work rule" is instrumental here. FSU is unable to give a faculty member a higher salary (beyond standard pay increases to keep up with inflation or for promotion) unless they have an offer letter from another school. In many cases it would be beneficial to provide a preemptive pay increase. Once people have toured another college/school, talked to their spouse, and imagined themselves in another locale they are half way out the door. We have less flexibility to retain our good faculty because of such a work rule. Another cost to our best and brightest faculty occur when the union attempts to inject different "fairness" criteria into processes (previous post about this here).

Other costs associated with UFF are ideology and inefficiency. Because UFF is affiliated with national union organizations that contribute money to the Democratic party that imbues them with an ideological flavor. While the union cannot (by law) directly support candidates with dues the fact that money is fungible means they can legally donate money to causes that are largely democratic (this article talks about how the NEA is in the pocket of the democratic party. Incidentally, you can see in the next link that the NEA and AFT receive 29% of UFF dues); moreover, the unions can endorse candidates. Finally, the union employs out-of-town salaried employees who are a staple on campus for the next two months calling folks, visiting offices, and drinking coffee with professors all the while giving them a slanted sales pitch about exaggerated importance (Here is the break down of union expenditures). This is essentially the public choice argument about bureaucracies (see post here)

In fact someone could spread these benefits and costs like papers on a table. Stand back, look, and then say, "On balance the union seems like a good deal because I value protecting the faculty with low outside options." But, like I mentioned in a previous post economists will look at the unseen (in this case the opportunity cost). Put another way, any good economist will ask the question, "Compared to what?" Certainly there are some benefits to unionization (for some people), but, compared to what? Other options include a strong faculty senate or an independent faculty association. Both of these options could wield bargaining power without the unwieldy expenses of a large-scale union operation. The point is there are other institutional arrangements besides the Union that retain some of the benefits without some of the costs. Even in the case of the Union saving some faculty positions, this could have been accomplished at less expense. If each faculty member who were part of the Union were paying 1% (the amount of union dues) into a general account at the University there would be more than enough money in such a general account to hire back all the faculty who were losing their jobs.

In writing this post it did occur to me, "Will anyone really care to read about UFF-FSU?" It really does seem hum-drum and monotonous and hardly contributes to the overall theme of the Wise as Serpents mission. What are the key lessons: 1)  People can choose to organize into one centralized negotiating agent which gives them more leverage at the bargaining table, 2)When faced with claims of benefit we good economists ask the question, "Compared to what?" , and finally 3) Soak in the lessons of public choice. These unions and other bureaucracies have an incentive to make exaggerated claims about their importance.

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