Sometimes The Adverse Results Of Unionization Occur Rather Suddenly

At my tag for Unions (located under the Archive tab) you will find many tales of heavily unionized industries undergoing long and steady decline.  These are industries like steel, automobiles, tires, supermarkets, and the Postal Service.  All of them have experienced gradual job losses in the hundreds of thousands over the course of several decades among unionized workers, although in most of the examples non-unionized competitors have arisen and thrived.  The job losses have come as the unionized firms have gradually downsized or, in many cases, gone bankrupt.  As I put it in this post back in June 2015, "Gradually, the unions put their employers out of business."   

Sometimes it's not so gradual.

Which brings me to the tale of the DNAInfo and Gothamist websites.  DNAInfo was founded in 2009 by entrepreneur Joe Ricketts as a site for in-depth reporting of local news in the New York City area.  Ricketts is also known as the lead owner of the Chicago Cubs.  I have read DNAInfo often, and linked to it many times.  It frequently had local stories not available elsewhere.  (In case I haven't mentioned it, the coverage of local stories by the New York Times is terrible.)  Earlier this year, DNAInfo acquired another NYC-oriented site called Gothamist, and the two merged.  Around the time of the acquisition and merger, there were some layoffs.  Even after the layoffs, neither of the two sites was profitable; but they were carried by capital infusions from Ricketts, even as he tried to work toward profitability.

In April the editorial employees of the combined businesses announced their intention to join a union, the Writers Guild of America, East.  Ricketts refused to recognize the union, and tried to dissuade the employees from pressing forward with a letter on April 19.  Excerpt:

I always thought of DNAinfo as a united team doing something that no one else has figured out how to do: building a viable business around neighborhood news. . . .  I want you to know that I still believe we are [on the same side]. We’re either going to make this business successful together or we won’t. And, frankly, I’m not interested in a company with an “us” versus “them” dynamic.    

The employees insisted on pressing forward, so the NLRB called a vote.  The vote was held a week ago, October 26.  The union won handily, 25-2.

The next day, it was euphoria among the union and the newly-organized employees.  Hollywood Reporter reported the story on October 27.  From Lowell Peterson, Executive Director of the WGAE:

“The people who write and produce content for digital news companies have made it crystal clear that they believe collective bargaining is essential to building sustainable careers,” said WGAE executive director Lowell Peterson. “The employees at DNAinfo and Gothamist have joined more than 700 of their colleagues in winning a voice on the job. We will form a strong, engaged bargaining committee to negotiate a contract that addresses their concerns and meets their needs.”

And from the DNAInfo-Gothamist Organizing Committee:

“This vote came after a long campaign for voluntary recognition, and we want to thank everyone who supported our effort to protect the workers of DNAinfo and Gothamist, which have been widely recognized as indispensable to local and neighborhood news in New York City.”

The euphoria was short-lived.  Today Ricketts announced that he was closing the sites.  All of the employees will be laid off.  Oops!  Perhaps they should have taken the time to read Ricketts's blog.  He had a post on September 12, basically forewarning what was in store.  The headline was "Why I'm Against Unions at Businesses I Create."  Excerpt:

I will . . . tell you what I know, and I know about starting and growing businesses.  I know that businesses constantly face a barrage of obstacles to survival – never mind success – and, in the face of that, everyone at the company needs to be pulling together or that company won’t make it.  I know that keeping a company growing and thriving requires focus and tireless effort by everyone.  Indeed, in my opinion, the essential esprit de corps that every successful company needs can’t exist when employees and ownership see themselves as being on opposite ends of a seesaw.  Everyone at a company – owners and employees alike – need to be sitting on the same end of the seesaw because the world is sitting on the other end.

I believe unions promote a corrosive us-against-them dynamic that destroys the esprit de corps businesses need to succeed.  And that corrosive dynamic makes no sense in my mind where an entrepreneur is staking his capital on a business that is providing jobs and promoting innovation.

Basically, amidst the daily struggle to make a business succeed, let alone facing ongoing need for large capital infusions, Ricketts was not interested in getting involved in fighting an adversarial union.  Can you blame him?

For another perspective -- otherwise known as the usual progressive talking points -- we can turn to a guy named Jake Dobkin, who was the owner of the Gothamist site before selling out to Ricketts.  A site called Splinter News points to a post written by Dobkin last year on the (then-independent) Gothamist site, with the following quote:

I would like to suggest . . . a commitment to overthrowing the tyrannical capitalist system that makes working people run ever faster to earn the same wages. Perhaps it is time for all creative comrades to stop struggling and realize they have joined the submerged working class, and to band together on that basis with other poor people to change the system which oppresses everyone.

Well, Mr. Dobkin, in your narrative, aren't you yourself the "tyrannical capitalist"?  And in the world you envision, who is supposed to fund the new higher wages of workers in a money-losing business?  The taxpayers?

You can see why unions -- or at least, unions on the adversarial Wagner Act model -- have no future in the private sector.  As to the public sector, we will have to see how the Janus case turns out in the Supreme Court.