VI. UNION AND MANAGEMENT COOPERATION AND APPROACHES TO MULTI-EMPLOYER PLANS

DISCUSSION

BRUCE NISSEN
Florida International University

      The papers in this session comprise a very interesting and well-written set of analyses on the issues surrounding multi-employer plans. Each paper’s primary focus ranges from pensions (Ghillarducci), to health care (Sleigh), to training (Worthen), to government regulation (Grob). All make a contribution to our understanding. I discuss each of the papers in the order presented.

      The paper by Teresa Ghilarducci, “The Economic Logic of Multi-Employer Pension Plans,” does an excellent job of analyzing the economic role of multi-employer pension systems. It also exposes the inadequacies of simple neoclassical economic theory, which is unable to perceive, much less solve, principal agent and collective action problems inherent in single-employer plans.

      This paper highlights the crucial role of a union or a similar coordinating agent in making multi-employer plans work. I particularly appreciate the detailed explanation of the various ways that collective action and principal agent problems manifest themselves and are solved by multi-employer plans. Thus, I have little criticism to make of the paper, conceived within its own parameters. My only suggestion for future work would be to supplement current analysis with a class-based one. Many of the advantages noted in multi-employer plans (portability that frees a worker from dependence on a particular employer, a shift from lower employer contributions toward higher payouts in the event of overfunding, joint governance of the plan, etc.) may be positive from a public policy or worker perspective, but they represent a shift in power away from unilateral employer control and thus may not be in the class interests of employers even if they do benefit primarily smaller employers. The paper’s depiction of such plans as wholly beneficial to all parties concerned may be overlooking an overall employer class interest in maintaining single-employer controlled plans.

      The paper by Heather Grob, “Defining Responsibility: Exploring Government’s Role in Regulating Multi-Employer Arrangements,” likewise does a fine job in exploring the issues concerning government oversight of multi-employer arrangements. While the emphasis is on the regulation of workers’ compensation arrangements and the bargaining over them allowed in some states, the analysis covers governmental regulation of multi-employer benefit and training plans as well. The clear exposition of economic theories of regulation is followed by a strongly empirical “practitioners” look at the issues involved. Within its own frame of reference, the article is excellent, and I have no major objections or critiques of its contents.

      But some severe problems are not addressed by the author. At least in mostly deregulated and largely nonunion markets like the construction industry in the state of Florida, the main problems articulated by workers and unions are much more basic than those enumerated in this paper. There is widespread evasion of most governmental regulation of any kind. Workers are reclassified as “independent contractors” (so-called “1099s”); many fly-by-night subcontractors or sub-subcontractors carry no workers’ compensation insurance at all; and in extreme cases drywall workers may work for $25 a day in cash plus boarding (with 4–5 others) in some local cheap hotel room. An underfunded state regulatory apparatus can’t even begin to address these problems. So, at least in some states, basic problems of political will and government funding overshadow the issues of dispute resolution, transparency, and so on, discussed in this paper.

      Stephen Sleigh’s paper, “Health Care Cost and Quality: Prospects for Mutual Gains,” provides an interesting look at one union’s attempt to use a major employer (and later multiple area employers) to contain health care costs and to increase health care quality. This is an interesting story, and the author provides both an historical context (health care cost inflation) and an explanation of various attempts to define and measure quality. The bargained approach also illustrates inducements to both union and management to contain costs and increase quality.

      My quibbles with this paper are largely technical. The chart illustrating IAM membership satisfaction with their health plan is difficult to interpret absent some basic facts like the number of workers surveyed and the level of significance of the changes noted. Further, if the changes were implemented following a 1995 strike, why are data from the years 1996 and 1997 omitted? I also wonder about the dynamics bringing together four Wichita area employers into one alliance. Were there any hesitations or conflicts? Or was cooperation easy to achieve despite competition in other areas?

      The final paper, Helena Worthen’s “Joint Labor–Management Apprenticeship Programs: How Multi-Employer Training Programs Work in Chicago’s Construction Industry,” provides a very detailed picture of how two construction industry joint apprenticeship programs operate in the Chicago area. Her argument is that these apprenticeship programs “work” best when they combine training with union organizing. The empirical detail, the consideration of relevant contextual issues (like previous racial exclusion), and the formulation of the argument are all well done. The comparison of a rather restricted Plumbers union apprenticeship program with a more flexible and strategically used Carpenters apprenticeship is clear and instructive.

      My suggestions to the author for further research center on the union– community dynamics unearthed in the Carpenters’ relationship with community and faith-based organizations. This is a fruitful area for more investigation, particularly in a union sector like construction, where relations between unions and minority communities have been quite bad in the past. Such research would lead into the internal dynamics of building trades unions that limit their willingness to implement the types of measures advocated in the paper.