aligning union incentives
http://www.economist.com/blogs/democracy…
the United Automobile Workers … can own half of Chrysler’s stock and a third of General Motors’ stock if everything goes through…
anti-labour activists might also feel a bit of cheer. As Conor Clarke points out, today’s events can only have one of two consequences:
It will change the incentives of the unions—such that they realize their demands were bad for the company—or it will run the company (further) into the ground and leave the union to pick up the pieces.
Worker ownership rarely works the way it’s expected, so it’s entirely possible that the UAW has sped up its own demise by cutting this deal.
I think that the NLRB and other bits of New Deal imprimatur-of-approval on unions are bad things and should be thrown out.
…but if the feds are going to set up arbitrary rules about employers and unions, here are my two modest proposals:
- Every unionized employee must have 5% of his paycheck automatically deducted and used to buy company stock, which is put in a brokerage account and which is automatically sold 10 years later, in a rolling, pipelined manner
- Unionized companies can not have pension plans, but must have defined contribution retirement plans, and 50% of the stock in the plan has to be stock in the company.
