The shutdown of West Coast docks cost the U.S. economy a billion dollars a day according to some estimates. Like the UPS strike of 1997, the work stoppage idled other businesses and jeopardized the jobs of other American workers.
But the real tragedy of this conflict is that it involves issues that were addressed and solved very thoroughly – more than ninety years ago.
A recent article in the Wall Street Journal, “On the Pre-Modern Waterfront,” described the conflict between union labor – International Longshore and Warehouse Union (ILWU) – and the Pacific Maritime Association (PMA).
The PMA had expressed a strong desire for productivity improvements through the use of automation technologies such as bar code scanners. But ILWU wants to continue entering shipment data by hand instead of scanners. The ILWU hopes to protect jobs from the effects of automation.
Labor’s opposition to productivity improvements goes back at least to the early nineteenth-century Luddites. The Luddites smashed textile machinery because they were afraid it would put them out of work.
But what they did not understand is that automation brings higher wages and a higher standard of living for everyone. Henry Ford, whose industries were directly responsible for making the United States the wealthiest and most powerful nation on earth, wrote in “Today and Tomorrow” (1926),
“The theory that efficiency and better methods make for unemployment is pernicious, but it is widespread. … It all goes on the theory that there is only so much work in the world to do and it must be strung out. … The fallacy of this has been proved over and over again and nowhere more effectively than in our own industries.”
More than seventy-five years ago, Mr. Ford effectively solved the ILWU and PMA dispute for them. Labor would be wise to not only accept, but embrace and participate in, productivity improvements if it wants higher wages and jobs that won’t be taken away by cheap Third World labor.
Problems arise only when management tries to keep all the gains for itself, e.g. by discharging workers whose jobs the improvements eliminate. Only mountebanks who have latched on to the latest buzzword will tell you that “lean and mean” means cutting jobs and making the remaining employees work extra hours, often with no additional pay. Front-line workers are often in the best position to identify waste and inefficiencies in their daily activities. Job security and higher wages encourage them to do this. If management punishes the workers by cutting jobs when they find ways to make the work more efficient, the workers will deliberately overlook future improvement opportunities. Frederick Winslow Taylor told us this more than ninety years ago in his “Principles of Scientific Management,” so it ought to be a no-brainer by now:
“…after a workman has had the price per piece of the work he is doing lowered two or three times as a result of his having worked harder and increased his output, he is likely entirely to lose sight of his employer’s side of the case and become imbued with a grim determination to have no more cuts if soldiering [deliberately limiting productivity] will prevent it.”
Management must accordingly share the financial rewards of the improvements with labor, as Ford did. It must also find work for employees whose jobs the improvements make unnecessary, as PMA has pledged to do.
Lean enterprise is the elimination of non-value-adding activities from all aspects of the business, including the supply chain. It was the system behind Henry Ford’s proven and unquestionable results, and it made the United States the world’s leading power. It is the only way to maintain our standard of living and long-term national security. The real tragedy of the ILWU/PMA dispute is that there is no conflict, no win-lose situation at all, except in the minds of the disputants.
