TIME politics

The Students vs. the Unions

New York City’s mayor handed teachers a big win. Struggling students will be the losers

Back in 2005, when New York City was pre-crash flush, Mayor Michael Bloomberg offered the United Federation of Teachers a raise in return for 150 extra minutes of classroom work per week. The mayor’s idea was to spend that extra time tutoring the kids who needed the most help–the bottom third of each class. UFT president Randi Weingarten agreed that the group sessions would be small, no more than 10 students per class. Schools chancellor Joel Klein wanted three 50-minute periods per week. The union wanted five 30-minute periods. They compromised on four 37½-minute sessions.

The program was never given a name, which made it easier for New York’s new “progressive” mayor Bill de Blasio to give it back–to eliminate the required 150 minutes of special instruction–in his negotiations with the UFT this spring. You might well wonder why. I tried to find out but received a heaping ration of gobbledygook from a source close to the mayor. He said that the program had been “inflexible” and “one size fits all.” That it was not “workable to the purpose.” Translation: it didn’t work. But how do we know that? No studies or evaluations were done. At his press conference announcing the new union deal, the mayor and his schools chancellor, Carmen Fariña, gave several foggy reasons for the change: the time would be used for additional parent conferences and for “professional development” so the teachers could learn how to teach the new core curriculum. A lot of unspecific wiggle room was negotiated on both counts–part of the mayor’s drive toward “flexibility.”

But flexibility is not a trait often associated with teachers’ unions. The American Federation of Teachers, which Weingarten now heads, calls itself “a union of professionals,” but it negotiates as if it were a union of assembly-line workers. Let’s start with the 37½ minutes, especially that half-minute. What happens if the teacher is in midsentence–or is in the midst of a breakthrough with a student–when the bell rings? A professional finishes the lesson and is paid in personal satisfaction. (I’m sure that the overwhelming majority of teachers do so; these sorts of work rules insult their dedication.) A professional talks to parents whenever and wherever. A professional also doesn’t resist evaluation–but the current New York City union president, Michael Mulgrew, actually bragged that he “gummed up the works” on an evaluation agreement with the far more rigorous Bloomberg administration; de Blasio, of course, hasn’t sought to implement that deal.

The most damning aspect of de Blasio’s giveback is the “didn’t work” argument. We are talking about one of the ground-zero principles of a healthy school system: extra help for those who need it. If the program doesn’t work, you don’t eliminate it. You fix it. The mayor’s spokesman said the extra help would be continued in “flexible” ways. Apparently, “flexibility” is a mayoral euphemism for “I cave.” And given the current atmosphere, if it isn’t specified in the contract, it doesn’t exist. A mayor who actually cared about education would be seeking longer school days, longer school years, more charter schools (which have to be more rigorously monitored) and the elimination of tenure and seniority rules to make sure that the best professionals, not the longest-serving assembly-line workers, are in the classrooms.

Teachers’ unions are suddenly on the defensive across the country. The Supreme Court recently ruled–unfairly, I believe–that some home health care workers did not have to join the union that negotiated their contract. That could have an impact on all public-employee unions. In California, a district court judge recently threw out the state’s tenure rules. In his ruling, he wrote that the widespread protection of incompetent teachers “shocks the conscience.” A group called the Partnership for Educational Justice, which is led by former CNN anchor Campbell Brown, is filing a similar suit in New York and promises to take the movement national. Brown’s group has hired Robert Gibbs, the former Obama press secretary, to run its communications strategy; other Obama stalwarts will soon join the effort as well. Obama’s Secretary of Education Arne Duncan praised the California decision, which caused the National Education Association, the country’s largest teachers’ union, to call for him to be fired.

All of which raises an old labor-movement question for Democrats in 2014 and 2016: Which side are you on? Competent teachers should certainly be paid more, but the protection of incompetence is a national scandal, as is the unions’ resistance to teacher evaluations and charter schools, as is the quiet undermining of educational creativity by eliminating special programs for needy students. The Obama Administration has clearly edged away from the unions’ excesses. But what about the rest of the party? Which side are they on: the students’ or the unions’?

TO READ JOE’S BLOG POSTS, GO TO time.com/swampland

MONEY Airlines

Your Best Shot at a Cheap Flight to Europe Is in Jeopardy

Norwegian Airplanes
Norwegian Air has drawn criticism alongside its reputation for low-cost flights within Europe and, more recently, on transatlantic flights from the U.S. Scanpix Sweden—Reuters

Airline worker unions and the world's biggest airlines are ganging up on a carrier that recently brought long-awaited cheap transatlantic flights back to U.S. travelers. How cheap? Often under $500 total.

In early June, Norwegian Air marked the one-year anniversary of the launch of service between the U.S. and Europe. The airline, known for much of its history as a low-fare carrier mainly in competition with Ryanair, EasyJet, and other airlines duking it out for budget travelers flying within Europe, has gotten plenty of attention over the past year for its incredibly cheap transatlantic flights.

Last year, Norwegian introduced several round-trip U.S.-Europe fares for under $500—amazingly, with taxes and fees included—on routes between Scandinavia and U.S. gateways such as Orlando, Los Angeles, Oakland, and New York-JFK. Lately, Norwegian is advertising one-way fares such as New York to London for $259, New York to Oslo for $211, and Oakland to Oslo for $244. Again, all taxes and fees included, which is astonishing considering that travelers have grown accustomed to the taxes-and-fees portion of transatlantic flights tacking on several hundred dollars in addition to the cost of, you know, actually flying.

In addition to drawing the attention of travelers eager for the arrival of a cheaper means to cross the Atlantic Ocean, Norwegian Air has also been a magnet for criticism from both airline competitors and airline employees. Airline worker groups have accused Norwegian of being ruthlessly anti-union for its policy of hiring Thai pilots and American airline attendants on the cheap, rather than higher-paid union Norwegian employees. The major U.S. airlines have been trying to stop Norwegian from expanding service for the transatlantic market via a subsidiary airline (Norwegian Air International), claiming that the company’s plans of setting up headquarters in Ireland amount to the creation of a “shell company,” and that its business practices are “not in the public interest.” At the end of May, the U.S.-based Air Line Pilots Association began lobbying federal authorities to block planned Norwegian Air flights to the U.S. because the airline supposedly is circumventing labor rules to gain an unfair advantage over the competition. There has been plenty of hinting that flying on Norwegian is unsafe as well.

On June 4, the day of its one-year anniversary for service to the U.S., Norwegian attempted to set the record straight with a press release taking on the accusations one by one. For instance, the release states that Norwegian Air is not anti-union:

A majority of Norwegian’s pilots and cabin crew members in Scandinavia are union members. Technicians and administrative employees are also union members.

There’s nothing unsafe about the business model either, the release claims:

Norwegian has been running a safe airline operation since 1993 with no registered accidents or major incidents. Safety has always been the company’s number one priority.

Most interestingly, Norwegian takes several shots at the competition, accusing the big carriers of charging far more than is reasonable for international flights:

Norwegian believes that competition on intercontinental flights is long overdue. Flights between the U.S. and Europe have traditionally been way too expensive. Why should a flight between New York and Europe cost three times as much as a flight between New York and Los Angeles? The flight to Europe is only about an hour longer, sometimes even less.

Previously, Norwegian Air has been more brash in lashing out at critics. When asked about concerns that the airline was no longer really a Norwegian carrier, and that is abandoning its homeland by establishing a home base in Ireland, CEO Bjørn Kjos said bluntly, “We don’t give a s*** about that. We go where the passengers go. Norway is just too small to survive.”

“It’s obvious that they’re afraid of competition,” Norwegian spokesman Lasse Sandaker-Nielsen said earlier this year, referring to the airline competitors arguing against Norwegian’s plans. “Their strategy is to make false allegations in an attempt to prevent American travelers from getting inexpensive airfare to Europe.”

It’s no surprise where travelers and consumer groups stand on the issue. They want cheaper flight options to Europe, even if it’s via the Norwegian Air model, which–also no surprise–is rife with fees as a tradeoff for inexpensive upfront fares. Many believe it’s high time for true competition to return to the transatlantic flight market (if it ever actually existed, that is). “The other airlines are used to jacking up their prices because there is virtually zero competition,” a recent post at Consumer Traveler stated. “Only three alliances compete against each other across the Atlantic. Oneworld, Star Alliance and SkyTeam control about 85 percent of transatlantic traffic.”

For an example of how Norwegian matches up against the competition, a recent fare search showed a round-trip from Oakland to Oslo at the end of the summer coming to a total of $592, including all taxes and surcharges. The nearest competitor for a Bay area round trip to Oslo on the exact same dates was well over $1,000. Even if you never fly on Norwegian Air, you should probably be happy that it exists—and that it’s putting some pricing pressure on the competition.

[CORRECTION: An earlier version of this story stated that airline groups have been trying to shut Norwegian Air out of the transatlantic market. The efforts are focused on stopping Norwegian Air's plan to expand transatlantic flights via a subsidiary airline being established in Ireland.]

TIME Unions

5 States With the Absolute Toughest Unions

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Tetra Images—Getty Images/Tetra images RF

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This post is in partnership with 24/7Wall Street. The article below was originally published on 247wallst.com.

The percentage of American workers in unions remained effectively unchanged last year. This marks a departure from the nation’s long-term trend. In the past 30 years, union membership has dropped from 20.1% of the workforce in 1983 to 11.2% last year.

Despite this long running decline, some states remain union strongholds, while others have almost no union presence. In New York, Alaska and Hawaii, more than 22% of workers were union members last year. Conversely, in five states, less than 4% of all employees were union members.

A number of factors help determine whether unions have a significant or negligible presence in a state, including industry composition, labor laws and political atmosphere. Based on data collected by the Bureau of Labor Statistics and calculations by Unionstats.com, 24/7 Wall St. identified the states with the highest and lowest shares of workers who are union members.

With the addition of Michigan in 2012, nearly half of all states have so-called “right to work” laws. These laws prohibit employers from requiring union membership as a prerequisite for employment. As a result, employees often elect not to pay union fees. All 10 of the states with the lowest proportional union membership have right to work laws. Conversely, just two of the 10 states with the highest rates of union membership — Michigan and Nevada — have such laws.

MORE: 10 Companies Paying Americans the Least

However, according to an email from Unionstats founder Barry Hirsch, while these laws can weaken a union’s financial base, the impact may be smaller than some suggest. “Right to work is important symbolically as a sign of a pro-business [or] anti-union environment,” Hirsch added.

The number of union workers in a state depends in large part on the representation of government employees. Although the public sector is far smaller than the private sector in terms of total employment, public sector workers are far more likely to be members of a union. Nationwide, more than 35% of public sector employees — which include teachers, firefighters, police officers and postal workers — were union members last year.

As a result, states where public employees were more likely to be in unions had higher rates of overall union representation. In New York, the nation’s most unionized state, 70% of public sector employees were union members, the highest percentage in the nation. By contrast, in North Carolina, the nation’s least unionized state, slightly less than 10% were union members.

In contrast to the public sector, unions are far less prevalent in the private sector, where just 6.7% of the workforce was unionized. However, because the private sector is far larger, it still accounts for a large share of union membership. In fact, most of the top 10 states for overall membership were also among the top 10 for percentage of private sector workers who were union members.

In recent decades, the private sector has accounted for the majority of the decline in the union workforce, while the share of public sector workers in unions has remained relatively constant, Hirsch wrote. “Public sector members now account for half of all members despite being only [one-sixth] of the workforce,” he added.

Often, high levels of union membership in a state were due to the presence of industries where unions traditionally held considerable influence, most notably construction and manufacturing. As of 2013, 14% of all construction sector workers, and 10% of all manufacturing workers, were union members.

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In the past decade, the share of private sector workers in unions fell in all but a handful of states. From 2003 to 2013, the number of private sector union members dropped by more than 1 million, from just less than 8.5 million to 7.3 million. In the same time, manufacturing union membership slipped by 34%, from just under 2.2 million to 1.4 million.

In addition to sector composition, Hirsch also noted that history played a role in determining unionization rates. “States that historically had high unionization in manufacturing are now more likely to have high unionized hospitals and grocery stores, and vice-versa,” he explained. In turn, when young workers have not been exposed to unions through friends and family members, “these workers are far less likely to support union organizing.”

Based on figures published by Unionstats.com, an online union membership and coverage database, 24/7 Wall St. identified the states with the highest and lowest union membership as a percentage of total employment. The database, which analyzes Bureau of Labor Statistics’ (BLS) Current Population Survey, provides labor force numbers and union membership in both the public and private sector, including manufacturing and construction. Additionally, 24/7 Wall St. reviewed annual average unemployment rates for each state from the BLS, as well as income and poverty data from the 2012 American Community Survey, produced by the U.S. Census Bureau.

These are the states with the strongest unions:

1. New York
> Pct. of workers in unions: 24.3%
> Union workers: 1,982,771 (2nd highest)
> 10-yr. change in union membership: 2.4% (14th highest)
> Total employment, 2013: 8,144,204 (3rd highest)

Nearly one-quarter of New York’s workers — close to 2 million people — were union members in 2013, the highest percentage in the country. Union representation was relatively strong both in the private sector and in government jobs. In the private sector, 15.1% of workers were union members, the highest percentage in the country. Nearly 70% of public sector workers belonged to unions, the highest percentage in the country. However, even in New York, unions have been forced to make concessions so that their members could keep their jobs. In 2011, the state struck a deal with New York’s largest public employees union, the Civil Service Employees Association, to freeze wages in order to avoid mass layoffs.

2. Alaska
> Pct. of workers in unions: 23.1%
> Union workers: 70,692 (16th lowest)
> 10-yr. change in union membership: 19.6% (3rd highest)
> Total employment, 2013: 306,322 (3rd lowest)

More than 23% of Alaska’s relatively small workforce, or 70,692 workers, were union members in 2013, more than in any state except for New York. Additionally, more than one in 10 private sector workers were union members, among the higher rates in the nation. Unlike many highly unionized states, union membership increased in Alaska — by nearly 20% — between 2003 and 2013. This was the third largest increase in union members among all states. Membership across the nation, by contrast, fell by 8% over that time. Alaska residents had among the nation’s highest incomes as of 2012, when a typical household earning more than $67,000. Also, just slightly more than 10% of people lived below the poverty line that year, among the lowest in the country.

3. Hawaii
> Pct. of workers in unions: 22.1%
> Union workers: 121,357 (23rd lowest)
> 10-yr. change in union membership: -0.3% (18th highest)
> Total employment, 2013: 549,219 (9th lowest)

As is the case in many states with strong union membership, a large proportion of Hawaii’s manufacturing workers — 18.3% — were union members as of last year, more than in all but two other states. More than 32% of private construction workers were also union members, among the highest percentages nationwide in 2013. By many measures, Hawaii is a good place to work, with high median incomes and low unemployment helping to offset the state’s exceptionally high cost of living last year. A typical household made more than $66,000 in 2012, more than in all but a handful of states. And the unemployment rate was just 4.8% last year, also among the best rates.

4. Washington
> Pct. of workers in unions: 18.9%
> Union workers: 544,986 (8th highest)
> 10-yr. change in union membership: 8.7% (8th highest)
> Total employment, 2013: 2,880,935 (14th highest)

Washington’s total employment rose by nearly 104,000 workers, or 3.6%, between 2012 and 2013, one of the highest increases in the country. Washington is one of the most unionized states in the private sector, with 11.7% of all employees union members. Nearly one-quarter of the state’s private construction workers were union members in 2013, among the highest in the country. Similarly, 24.2% of all manufacturing workers held union membership, the most in the nation. There were 52,000 fewer public sector employees in 2013 than in 2012, as the state continued to follow through on the budget cuts it initiated during the recession. Despite this, union membership in the public sector held steady, at more than 261,000 workers, or 57% of all public employees.

5. Rhode Island
> Pct. of workers in unions: 16.9%
> Union workers: 77,367 (18th lowest)
> 10-yr. change in union membership: -7.9% (25th highest)
> Total employment, 2013: 458,494 (8th lowest)

Like several other states with strong union presence, nearly two-thirds of Rhode Island’s public sector belonged to a union last year, second only to New York. Labor initiatives appear to be a recent priority for policy makers. The state raised its minimum wage to $8 an hour at the beginning of last year, affecting more than 10,000 workers at the time. Wages may increase even further if the labor union-backed legislation introduced in January is passed. The bill aims to increase the minimum wage to $10 per hour by 2016. While union membership may benefit many Rhode Island workers, high wages could potentially also limit new employment opportunities. Rhode Island’s unemployment rate of 9.5% last year was higher than that of any other state except for Nevada.

Visit 24/7 Wall St. to see the remaining states on the list.

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TIME Companies

JetBlue Pilots Vote to Unionize

After previously rejecting bids to unionize, the airline's pilots voted in favor of joining the Air Line Pilots Association, "so that we have the ability to improve our professional careers," co-chairs of JetBlue's organizing committee said

JetBlue Airways pilots overwhelmingly voted in favor of joining the Air Line Pilots Association (ALPA), the union announced on Tuesday.

The majority of JetBlue’s roughly 2,600 pilots took part in the vote, and 71% voted in favor of joining the ALPA. The move comes after JetBlue pilots previously voted against unionization in 2009 and 2011, the New York Times reports.

The pilots are the first employees to unionize at JetBlue, which was founded in 1998. The ALPA is the world’s largest pilot union and represents nearly 50,000 pilots in the U.S. and Canada.

“Today, JetBlue pilots have voted for ALPA representation so that we have the ability to improve our professional careers,” captains Rocky Durham and Gustavo Rivera, co-chairs of the JetBlue Organizing Committee, said in a statement. “As committed as we are to our objectives, we also want to work with management to ensure we continue to contribute positively to JetBlue’s success. We believe in JetBlue and look forward to helping make this company one of the best in the industry.”

TIME College Sports

College Athletes Win Right To Unionize

The labor board ruling that Northwestern football players can join a union is a victory for the National College Players Association but a blow for the NCAA

Football players at Northwestern University were awarded the right Wednesday to be considered legal employees and to join a labor union, in a ruling that could have wide-reaching implications for college athletes around the nation.

The announcement by the National Labor Relations Board is a victory for the National College Players Association, which petitioned the NLRB in January for the right to unionize. The player’s association has argued that colleges and the NCAA profit handsomely from student athletics, while imposing rules that prevent student athletes from benefiting financially from their own success, or receiving benefits like workers compensation or the promise that they’ll keep scholarships if they’re injured on the field. Being part of a labor union, they argue, will give student athletes a way to represent their own interests and negotiate for a more equitable share in their successes.

The NCAA has fought efforts to label student athletes employees for decades. “This union-backed attempt to turn student-athletes into employees undermines the purpose of college: an education,” the NCAA said in a statement released after players filed a petition with the NLRB in January. “Student-athletes are not employees, and their participation in college sports is voluntary. We stand for all student-athletes, not just those the unions want to professionalize.”

The NLRB ruling applies only to Northwestern. The NCAA has appealed the decision.

TIME NFL

NFL Playoffs Could Be Expanded

AFC Championship - New England Patriots v Denver Broncos
Julius Thomas #80 of the Denver Broncos catches a pass against Dont'a Hightower #54 of the New England Patriots during the AFC Championship game at Sports Authority Field at Mile High on January 19, 2014 in Denver, Colorado. Kevin C. Cox—Getty Images

League to discuss proposal during annual meeting

NFL owners are likely to discuss expanding the league’s playoffs by allowing two extra teams to compete for the Super Bowl when they meet in Orlando next week.

“There will be a report on the potential of expanded playoffs,” NFL spokesman Greg Aiello said Wednesday, the Associated Press reports. “We don’t know if there will be any vote at this meeting.”

By allowing seven teams from each conference into the playoffs, the new system could eliminate the possibility of teams with several losses ascending to the playoffs over franchises with more wins—something that has happened in recent years.

The addition of extra games would also help owners in an ongoing impasse with the players’ union over extending the length of the regular season. The 14-team playoff would also provide additional revenue to the league and to teams.

[AP]

TIME Primaries

Bruce Rauner Wins GOP Nod for Illinois Governor

Republican candidate for Illinois Governor Bruce Rauner celebrates with his wife Diana after winning the nomination in the Illinois Primary in Chicago
Republican candidate for Illinois Governor Bruce Rauner celebrates with his wife Diana after winning the nomination in the Illinois Primary in Chicago March 18, 2014. Jim Young—Reuters

Venture capitalist Bruce Rauner, who campaigned on a promise to run Illinois more like a business, has won the Republican primary and will challenge Gov. Pat Quinn in his re-election race later this year

Business tycoon Bruce Rauner is set to square off against Illinois Governor Pat Quinn after sealing the Republican nomination on Tuesday night.

The venture capitalist has already poured millions of dollars into his campaign in a state where Democrats have controlled the governor’s office for more than decade.

According to the AP, Rauner raised over $14 million during the primary race, which included $6 million of his own money — a new high-water mark for an individual candidate seeking a gubernatorial nomination in Illinois.

During the Republican primary, Rauner promised to bring his enterprising experience to the table and run the state more like a business if elected, while also vowing to wrest institutions from the influence of labor unions.

[AP]

TIME Labor

Crippling Blow for Labor Union at Volkswagen Plant

In this June 12, 2013, photo, workers assemble Volkswagen Passat sedans at the German automaker's plant in Chattanooga, Tenn.
In this June 12, 2013, photo, workers assemble Volkswagen Passat sedans at the German automaker's plant in Chattanooga, Tenn. Erik Schelzig—AP

Workers at a Volkswagen plant in Tennessee voted against United Autoworker representation by a margin of 87 votes Friday night, in a painful defeat for the U.S. labor movement seeking to gain a foothold in the traditionally labor-hostile South

Workers at a Volkswagen plant in Tennessee voted against United Autoworker representation by a margin of 87 votes Friday night, in a painful defeat for the U.S. labor movement seeking to gain a foothold in the traditionally labor-hostile South.

The UAW, which had placed a high stake on its push to expand labor representation to the South, was defeated in a 712-626 vote at the Chattanooga plant, the Associated Press reports.

The UAW has pushed hard to expand into the South, where foreign auto companies have 14 assembly plants and have expanded in the region in recent years. The vote leaves the union confined to the Midwest and Northeast.

Outside groups had joined the fight, with the vociferous union opponent Sen. Bob Corker (R—Tenn.) claiming Volkswagen would probably not build a new SUV at the plant if workers allowed the the union to represent workers.

Volkswagen later denied Corker’s statement that expansion at the plant was dependent on a no-union vote. Other state lawmakers threatened to cut off tax incentives for the plant if workers unionized.

UAW president Bob King, who has said that organizing a plant in the South is crucial to the future of the labor movement, said he was outraged by “outside influence” at the plant.

“It’s never happened in this country before that the U.S. senator, the governor, the leader of the House, the legislature here, threatened the company with no incentives, threatened workers with a loss of product,” King said.

Volkswagen, which has a strong union structure at home in Germany, gave the UAW tacit support, allowing organizers to pitch the union to workers in the plant and endorsing a unionized workforce. The plant may have been the union’s best shot to organize in the South, analysts have said.

[AP]

TIME Unions

VW, Grover Norquist, and the Future of American Unions

New 2012 VW Passat First Drive And Factory Tour
Robots at the Volkswagen Chattanooga plant weld a 2012 VW Passat in the body shop at the plant near Chattanooga, Tennessee, U.S., on Wednesday, June 1, 2011. The plant which has an initial capacity of 125,000 units per year, will build the 2012 Volkswagen Passat for the U.S., Mexico and Canada. Photographer: Mark Elias/Bloomberg Mark Elias—Bloomberg/Getty Images

If there’s a more fascinating business story out there right now than today’s vote in Chattanooga, TN, on whether VW plant workers should be allowed to unionize, I don’t know what it is.

I’ve been watching this story for a few weeks now, and I think it has major implications for the future of unionization and labor relations in America. For decades now, the number of union members in this country has been falling. (Currently only 11 % of U.S workers belong to a union, according to BLS statistics.) That’s unusual for a rich country—union penetration in Europe is much higher, and the relationship between unions and management is different. It’s less contentious, and more collaborative. In places like Germany, labor actually sits on the board of companies and helps make strategic decisions about how plants and even entire corporations are run, which is one reason that Germany was able to retool so quick and grab market share following the 2008 financial crisis and global recession in 2009. Read my colleague Michael Schuman’s excellent piece on that topic.

What’s fascinating about the VW vote is that the company is quite open to a German style works council, which would be organized under the auspices of the UAW. Many of the workers are in favor of it, too. But local politicians like Senators Corker and Watson, as well as conservative activists from Grover Norquist to the Koch brothers, are putting up a fight. They see the VW battle as a key victory in the battle to unionize the South. While Southern states have low union penetration, the South is also where the action is, and organizers like the UAW’s Region 8 director Gary Casteel, who’s in charge of Southern unionizing, have been making good progress there.

It is a battle that’s getting quite vicious, and will likely become more so, because Southern states, which have particularly attractive per unit labor costs on a global basis, are attracting quite a lot of manufacturing business (particularly amongst auto firms, including VW but also others like Nissan), and politicians worry that their states will lose business if they unionize. Sen. Watson, for example, recently threatened to pull job-creating tax incentives from the Volkswagen facility in Chattanooga should workers exercise their right to vote in favor of unionizing.

It’s too bad, because the truth is that there’s little evidence that the anti-union manufacturing model (exemplified by companies like Nissan) works better than the unionized one, particularly when it incorporates Germanic work councils. VW actually credits the system with making it the largest and richest auto firm in the world. What’s more, the workers I’ve spoken with in Chattanooga say they are less interested in pay hikes than in having some say over which cars get made in the factory, what sorts of training programs they’ll have access to, etc. I’ll be reporting out this story further for my column this week. For more about what it’s likely to mean for labor, management, and the U.S. economy, check out the latest episode of WNYC’s Money Talking, where Joe Nocera and I discussed the topic.

TIME Labor

Management is from Mars, Labor is from Venus

New 2012 VW Passat First Drive And Factory Tour
Robots at the Volkswagen Chattanooga plant weld a 2012 VW Passat in the body shop at the plant near Chattanooga, Tennessee, U.S., on Wednesday, June 1, 2011. The plant which has an initial capacity of 125,000 units per year, will build the 2012 Volkswagen Passat for the U.S., Mexico and Canada. Photographer: Mark Elias/Bloomberg Mark Elias / Bloomberg via Getty Images

The most important labor debate in the country right now isn’t the minimum wage issue that President Obama spent so much time on in his SOTU speech this week. Rather, it is a fascinating fight that’s going on at a VW plant in Chattanooga, Tennessee, over whether or not there will be a German style “works council” at the factory, an old style branch of the U.A.W, or no organized labor movement at all.

It’s a deeply psychological fight that has created some surprising alliances and rifts, and may herald an entirely new way to think about labor relations and economic development in this country. As everyone knows, American unions and American management are like oil and water—in the U.S., shareholder capitalism has always had little regard for the ownership rights of workers, and (perhaps as a result) organized labor has always been militant and difficult. Management squeezes, and labor pushes. While unions in the U.S. have been modernizing and adapting to globalization and outsourcing in recent years, which has resulted in concessions that would have been unheard of even a decade or two ago, the idea that management and labor could work together to come up with the best way to run a company has been a completely foreign idea.

In fact, it’s a German idea. As Time has covered in numerous stories, Germany’s more inclusive system of “stakeholder capitalism,” in which management, owners, labor, and even civic leaders all have places on the board and a say in corporate strategy, has resulted in better growth and lower unemployment since the Great Recession and recovery. Basically, giving everyone a say makes it easier to create job-saving compromises. I think it’s an idea that should have legs here in the U.S.

The question is whether we can adapt to such a radical labor relations shift. The UAW has been trying to unionize the South, so far unsuccessfully. Surprisingly, VW executives in Tennessee are now open to the idea of having a voice for labor–but it seems that they want it to more closely resemble the German style system, rather than an old style American union system. (For a good round-up of the facts, see the New York Times coverage of the issue.)

The UAW understandably wants to make sure that a works council isn’t just a quick and dirty way around real labor representation. What the whole thing underscores is that in the U.S., management is from Mars, and labor is from Venus. It’s time for a new system. I’ll be doing some reporting on what’s happen in Tennessee in the coming weeks, and blog about what it might mean for growth, jobs, salaries, and the labor share of the pie.

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