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Not Eudora   By Harry Welty
Published Jan, 5, 2006

Collective Bargaining

Back in my college days I was strictly a liberal arts kind of guy. I managed to get by with only four business classes and one of those was a typing course. Before I graduated, however, I wanted to take my Dad’s business law class.

My Dad moved us to Minnesota after being passed over for a promotion in the Kansas State Insurance Commission. He’d suggested that his boss, the Commissioner, stop accepting gifts from the insurance companies he regulated. Becoming a college teacher insulated Dad from the venal, “real world” and the terrible scandal that rocked the Insurance Commission a decade later.

My Father was a strong believer that people learn best when they are fully engaged in a task and he liked games. He even invented a couple of board games and pitched them unsuccessfully to Parker Brothers. He thought competition and play were great lubricants for education and he made them an essential part of his law class. Students either flocked to his class or, if they were shrinking violets, shunned it.

He divided his students into two-person “law firms.” Every day the firms argued contract case law with each other or sat in judgment of other cases being argued. Firms were assigned real suits that had already been settled. Half of the cases they were given had been won by plaintiffs and half by defendants. Firms that won more than fifty percent of their cases earned higher grades. Firms that lost more suffered.

Although preparing for the cases took time this part of the class was a breeze for me. I always argued the cases our firm was supposed to lose and generally won them. My partner argued the cases we were supposed to win and frequently won. Had this been the sole determinant of my grade I would have done well but there was one more assignment at the end of the semester that nearly unhorsed me.

Dad’s class ended with a collective bargaining simulation during which half the firms represented labor and the other half management. I may have had a silver tongue but I had very little real world experience. All I knew about salaries and benefits was the minimum wage. To give these negotiations some real world punch Dad built a potential calamity into it. If firms could not agree on a contract they forfeited all the collective bargaining points. Although strikes were rare they did occur and they weren’t good for anyone’s GPA.

My partner and I were assigned to represent a Mankato retailer. As it did not occur to me to find out what real world benefits amounted to (being a liberal arts kind of guy) I went into the negotiations blind. Unfortunately, my partner, who was a business major, was so taken with my debating skill and perhaps my kinship with the teacher that he deferred to me during our negotiations.

Our chief adversary was a fellow who looked more like an anarchist with his scruffy beard than a business major and he was not in awe of me or my connection to our teacher. If anything my being the teacher’s kid gave him an extra impetus to drive a hard bargain and the threat of a strike gave him the perfect weapon.

I don’t know how serious he was about taking a strike but I had no doubt about the threat back then. Even so, I had no idea how much we had given away until I overheard my Father grading the settlements. When he got to ours he groaned, “Oh my God!” Apparently the settlement we’d agreed to would have bankrupted the retailer. Thank goodness it was only a game.

There have been some profound changes in labor/management relations since I graduated. The most dramatic change has been the globalized market place which has undermined the once potent threat of a strike. “You want to strike? Go right ahead. We’ll just take our factory to Asia where non-union workers will work for peanuts.” 

I don’t wish to make any moral judgments about the world’s new economy. Certainly, I’m happy that workers in the third world are getting the same kind of opportunities that Americans have long enjoyed.  But I have a word of caution for the NAFTA loving politicians who have helped bring this new world about. Elections are won by majorities. As long as a majority of Americans can count on having jobs, pensions and medical benefits there is hope for the free traders.

To that end the free traders ought to encourage the establishment of strong unions in the third-world. If workers in the emerging world take advantage of the power to strike for their own benefits, safety and health it could help slow down the great “race to the bottom.” If the race doesn’t slow down the free traders will find themselves caught up in it as well.