Rogue Missives - Wednesday, December 18, 1996

Rogue Missives

ROGUE ARCHIVES

Thursday, December 19, 1996

Democracy Triumphs
by Jim Surowiecki (Surowiecki)
Changes in the competitive structure of an industry often have ramifications for more than producers or consumers. More often than not, they have a dramatic impact on workers. And this has been especially true in the trucking industry in the wake of the deregulation that was brought about during the Reagan years.
Transportation has traditionally been one of the more regulated sectors of the American economy, and has been ever since the turn of the century. Among the major struggles fought by Progressive reformers were efforts to regulate the shipping rates charged by railroads. In the context of near-monopoly control of the rail industry, only rate regulation could insure that farmers would be able to get their goods to market and that consumers would be able to pay a reasonable price for food.
In addition, since the state is responsible for maintaining roads and waterways, since in fact the entire U.S. highway system is the product of public expenditures, it seems sensible to think that the public has an interest in ensuring that its investment in those roads pays off. As a result, transportation and shipping have always been subject to higher scrutiny than other economic sectors. In part, that kept cost increases stable. But it also limited the number of firms that could enter the market, creating a kind of oligopolistic situation.
Deregulation, at least in the trucking industry, has changed all that. Many new firms have sprung up, serving local markets and particular niches. The industry as a whole now looks more like the conventional picture of the free market, the landscape littered both with firms that couldn't cut it and with firms that have found the new competitive conditions a spur to greater achievement.
The industry also looks more like that conventional picture because of the dramatic diminution in power of the Teamsters, the truckers' union that in the postwar years, under the leadership of Jimmy Hoffa, became one of the most powerful unions in the country. In the past decade, the Teamsters have seen the number of their members decline, and their bargaining power has undergone a similar erosion. In the Midwest in particular Teamster locals have come away from negotiations with contracts that, at least by Teamster standards, were less than desirable.
All of this has occurred, of course, simultaneous with the first serious effort to clean up the union from within. Throughout its existence, the Teamsters have been suspected of close ties to the Mob, and the union has had four different presidents placed under indictment for crimes ranging from extortion to misuse of pension funds. It's safe to say, in fact, that the Teamsters played a crucial role in the gradual transformation of the public image of organized labor in America. The association many still make between unions and organized crime is an association that has as its most potent symbol the alliance between Hoffa and the Mob, an alliance that -- at least in legend -- ended up with Hoffa wearing cement shoes at the bottom of some river.
And yet Hoffa is an ambiguous figure in the mind of many Teamsters today, because while he was undoubtedly an autocratic and corrupt leader of the union, he was also decidedly successful at raising the standard of living of its members throughout the country. And in his early days, at least, Hoffa was genuine in his class-based militancy, though this militancy never extended beyond bread-and-butter issues. On the simplest level, the American working class' adoption of a middle-class standard of living, a transformation that in a sense gave us the social compact that governs our life today, was in no small part enabled by the success of industrial unions, including the Teamsters.
It makes a certain kind of sense, then, that as today's truckers have seen their wages decline, jobs disappear, and sense of power decline, they would look back to the Hoffa era as a time when things were much better. And it also makes a certain kind of sense that they would link their new position to the new Teamsters leadership, which is headed by Ron Carey, who was elected five years ago on a platform of cleaning up the union. As president, Carey took over direct control of 67 different locals that were run by corrupt or undemocratic leaders. He slashed his own salary by $50,000, and sold the union's two private jets. He has made a point of emphasizing the need for union democracy, and has in general run the union -- and negotiations -- without the iron fist that characterized previous regimes.
Two weeks ago, after a long and bitter campaign, the Teamsters voted in what was essentially a referendum on Carey's performance. Carey was challenged for president by James Hoffa, Jr., who ran on a platform of returning to the so-called glory days of his father. Hoffa spent $4 million on the race, while Carey spent just $1.6 million. Hoffa blamed the union's loss of members and its weak contracts on Carey. He enjoyed the support of the majority of the presidents of Teamsters locals, who are generally jealous of their power and resentful of Carey's intrusions from above. And he had, if anything, greater name recognition than the incumbent.
But the returns are in, and Carey has been re-elected, in what ended up being a very tight race. The Teamsters have voted for something other than a return to corruption and authoritarianism. This was, in a strange way, one of those votes that seems itself to be about democracy, and about the value of democracy. Just as shareholders need to be more vigilant in the way the companies they own are run, so too do union members need to be watchdogs over their unions. The Teamsters vote was a refusal of autocracy, and a triumph -- however muted -- for democracy.
The vote might also be seen as a recognition that much of what has happened to workers in the trucking industry is beyond Ron Carey's control. Just as the introduction of sound to the movies left silent film actors behind, and just as the transformation of the computer industry into a horizontal industry left companies like Wang in the lurch, the decentralization of the trucking industry has made it difficult -- though not impossible -- for an international union to represent its workers as successfully as it once did. The only answer, of course, is the simplest one. Namely, organize. Only by working on the grassroots level to organize workers at the small firms that have sprung up in the last decade and a half will the union succeed in reinventing itself.
In understanding where a particular industry is going in the future, it's easy to confuse cause and effect, or to commit the fallacy of post hoc, propter hoc. Just because one thing followed another chronologically doesn't mean that the former was caused by the latter. In the case of the Teamsters, systemic changes in the industry have more to do with the fortunes of American workers than does any change in the union itself. Nostalgia for the days when the Teamsters were strong and feared is really just nostalgia for the days when two or three nation-wide contracts could set standards for the whole country. Like all nostalgia, it mourns a world that does not exist. And like all nostalgia it leaves workers paralyzed in the face of the changes they need to confront.

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ROGUE ARCHIVES

Thursday, December 19, 1996
Democracy Triumphs by Jim Surowiecki (Surowiecki) Changes in the competitive structure of an industry often have ramifications for more than producers or consumers. More often than not, they have a dramatic impact on workers. And this has been especially true in the trucking industry in the wake of the deregulation that was brought about during the Reagan years. Transportation has traditionally been one of the more regulated sectors of the American economy, and has been ever since the turn of the century. Among the major struggles fought by Progressive reformers were efforts to regulate the shipping rates charged by railroads. In the context of near-monopoly control of the rail industry, only rate regulation could insure that farmers would be able to get their goods to market and that consumers would be able to pay a reasonable price for food. In addition, since the state is responsible for maintaining roads and waterways, since in fact the entire U.S. highway system is the product of public expenditures, it seems sensible to think that the public has an interest in ensuring that its investment in those roads pays off. As a result, transportation and shipping have always been subject to higher scrutiny than other economic sectors. In part, that kept cost increases stable. But it also limited the number of firms that could enter the market, creating a kind of oligopolistic situation. Deregulation, at least in the trucking industry, has changed all that. Many new firms have sprung up, serving local markets and particular niches. The industry as a whole now looks more like the conventional picture of the free market, the landscape littered both with firms that couldn't cut it and with firms that have found the new competitive conditions a spur to greater achievement. The industry also looks more like that conventional picture because of the dramatic diminution in power of the Teamsters, the truckers' union that in the postwar years, under the leadership of Jimmy Hoffa, became one of the most powerful unions in the country. In the past decade, the Teamsters have seen the number of their members decline, and their bargaining power has undergone a similar erosion. In the Midwest in particular Teamster locals have come away from negotiations with contracts that, at least by Teamster standards, were less than desirable. All of this has occurred, of course, simultaneous with the first serious effort to clean up the union from within. Throughout its existence, the Teamsters have been suspected of close ties to the Mob, and the union has had four different presidents placed under indictment for crimes ranging from extortion to misuse of pension funds. It's safe to say, in fact, that the Teamsters played a crucial role in the gradual transformation of the public image of organized labor in America. The association many still make between unions and organized crime is an association that has as its most potent symbol the alliance between Hoffa and the Mob, an alliance that -- at least in legend -- ended up with Hoffa wearing cement shoes at the bottom of some river. And yet Hoffa is an ambiguous figure in the mind of many Teamsters today, because while he was undoubtedly an autocratic and corrupt leader of the union, he was also decidedly successful at raising the standard of living of its members throughout the country. And in his early days, at least, Hoffa was genuine in his class-based militancy, though this militancy never extended beyond bread-and-butter issues. On the simplest level, the American working class' adoption of a middle-class standard of living, a transformation that in a sense gave us the social compact that governs our life today, was in no small part enabled by the success of industrial unions, including the Teamsters. It makes a certain kind of sense, then, that as today's truckers have seen their wages decline, jobs disappear, and sense of power decline, they would look back to the Hoffa era as a time when things were much better. And it also makes a certain kind of sense that they would link their new position to the new Teamsters leadership, which is headed by Ron Carey, who was elected five years ago on a platform of cleaning up the union. As president, Carey took over direct control of 67 different locals that were run by corrupt or undemocratic leaders. He slashed his own salary by $50,000, and sold the union's two private jets. He has made a point of emphasizing the need for union democracy, and has in general run the union -- and negotiations -- without the iron fist that characterized previous regimes. Two weeks ago, after a long and bitter campaign, the Teamsters voted in what was essentially a referendum on Carey's performance. Carey was challenged for president by James Hoffa, Jr., who ran on a platform of returning to the so-called glory days of his father. Hoffa spent $4 million on the race, while Carey spent just $1.6 million. Hoffa blamed the union's loss of members and its weak contracts on Carey. He enjoyed the support of the majority of the presidents of Teamsters locals, who are generally jealous of their power and resentful of Carey's intrusions from above. And he had, if anything, greater name recognition than the incumbent. But the returns are in, and Carey has been re-elected, in what ended up being a very tight race. The Teamsters have voted for something other than a return to corruption and authoritarianism. This was, in a strange way, one of those votes that seems itself to be about democracy, and about the value of democracy. Just as shareholders need to be more vigilant in the way the companies they own are run, so too do union members need to be watchdogs over their unions. The Teamsters vote was a refusal of autocracy, and a triumph -- however muted -- for democracy. The vote might also be seen as a recognition that much of what has happened to workers in the trucking industry is beyond Ron Carey's control. Just as the introduction of sound to the movies left silent film actors behind, and just as the transformation of the computer industry into a horizontal industry left companies like Wang in the lurch, the decentralization of the trucking industry has made it difficult -- though not impossible -- for an international union to represent its workers as successfully as it once did. The only answer, of course, is the simplest one. Namely, organize. Only by working on the grassroots level to organize workers at the small firms that have sprung up in the last decade and a half will the union succeed in reinventing itself. In understanding where a particular industry is going in the future, it's easy to confuse cause and effect, or to commit the fallacy of post hoc, propter hoc. Just because one thing followed another chronologically doesn't mean that the former was caused by the latter. In the case of the Teamsters, systemic changes in the industry have more to do with the fortunes of American workers than does any change in the union itself. Nostalgia for the days when the Teamsters were strong and feared is really just nostalgia for the days when two or three nation-wide contracts could set standards for the whole country. Like all nostalgia, it mourns a world that does not exist. And like all nostalgia it leaves workers paralyzed in the face of the changes they need to confront.