Professional Unions And The Labor Struggles Of The 21st Century

[Omaha Steve]

http://www.techdirt.com/articles/20070509/055646.shtml

from the unionism-resurgent dept

When one thinks of unions, a number of common conceptions will come to mind. Union members are typically thought of as blue collar industrial workers constantly engaged in some sort of zero-sum tug-of-war against management or shareholders. To further the interests of its members, unions have a number of tools at their disposal like strikes (or the threat of strikes), or pro-union laws that make it hard for a company to hire outside of the union. There's also a sense among many that the era of the union is over, which is closely related to the idea that the US is no longer an industrial nation. As more and more factory jobs get shipped overseas, the thinking goes, the traditional industrial unions have lost their clout. This is compounded by the fact industrial jobs aren't as sought after (particularly by young people) as once they were, no matter how much people try to romanticize them. The official story is that we've traded in the industrial economy for a service economy, much to the regret of many. Today, instead of building things, Americans help consult on and design projects, while the CAD drawings get sent overseas for manufacturing. This is, of course, a cartoonish, network nightly news description of the US economy, but it is handy. The US economy is increasingly made up of free agents and professionals that have never spent a day on the factory floor, where the tools they use and build are made. As such, the union is thought to be a relic of our economic past. Sure, every once in awhile you hear about some strike here or there (grocery baggers in California, UPS deliverymen, pilots, etc.), but these come off as isolated incidents. The union that's in the news most often is the United Auto Workers, which is constantly battling against the the Detroit car makers over things like healthcare and job cuts, but again, that whole industry, in its current model, comes off as a blast from the past.

But while membership rolls for the traditional unions might be on the decline, it's a mistake to assume that they're going away, or that labor struggles are a thing of the past. What's actually happening is that they're evolving to fit the times. Let's just take a recent example. The popular website Zillow was recently dinged in Arizona for not having a real estate appraiser's license, and a state board ruled that it was not allowed to give out home value estimates in the state. It seems absurd that a website would need a special license to give out data, but the board was made up of professional real estate appraisers that were worried about Zillow hurting their business. Essentially, when it comes to real estate appraisers, Arizona is a closed shop state. Either you have to be licensed, or you can't operate. You can probably see where this is heading, that there really isn't any meaningful difference between what a traditional union might do, in terms of looking out for the welfare of its members, and what the group of professional appraisers have done.

Now most people would see the above example as fairly cut and dry. The professional appraisers are engaging in monopoly rent seeking to keep a website that competes with them from operating. But that group is just one example of a modern union. Many other professions have similar setups whereby a professional organization-cum-regulatory body is in the position to decide who can or cannot engage in a particular line of work, and on what terms they're allowed to do their job. Other examples of these groups include the Bar Association, the AMA and the National Association of Realtors. To give a quick legal-related example, an insurance agent was recently found guilty of the "unauthorized practice of law" because she helped a client draw up a will using Quicken software. This case was decided on existing laws, but they were laws nonetheless crafted to help lawyers preserve their monopoly on will making.

Over a series of posts, I will argue that these groups are best thought of as unions, just like the UAW, and that significant and difficult labor battles loom on the horizon. As the share of our GDP that goes to things like healthcare and legal services continues to climb, the market will inevitably produce new technologies designed to automate the tasks of highly paid practitioners. As such, groups like the AMA and the Bar will increasingly find themselves standing athwart these technologies, and other low-cost solutions in the interest of their membership, just as a union would in the face of similar conditions. Let me state at the outset that this basic idea isn't a new one. The famous economist Milton Friedman was hated by the AMA for arguing that the control it exerted over the medical industry was preventing patients from getting low-cost care. So, much of this series will draw on the ideas of others. But it will hopefully convey a sense of urgency, by explaining that this isn't merely an academic issue, but something that needs to be examined and dealt with now.