Wednesday, August 14, 2013

Sports Lockouts Mirror Prevailing Labor Retreat

Lockouts with owners reaping the spoils are hardly unique to sports. For example the ongoing American Crystal Sugar lockout of its workers finally settled in May on essentially the owners’ original take-it-or-leave-it offer. Steven Greenhouse’s excellent piece, published last year in the New York Times, discloses that the increasing primacy of lockouts, reporting at least 17 owner initiated shutdowns in 2012. Clark University Professor Gary Chaison provides the elemental quote:

 “This is a sign of increased employer militancy. Lockouts were once so rare they were almost unheard of. Now, not only are employers increasingly on the offensive and trying to call the shots in bargaining, but they’re backing that up with action — in the form of lockouts.”

I don’t see where the lockout as management's primary negotiation strategy ends until unions are rendered completely ineffectualat least not without a change in the law and public policy. Ultimately that requires a political process, and can happen only if the public perception of unions changes. What does this mean for sports leagues? No worries short-term as none of the four CBAs expire until later this decade. And, MLB, up first in 2016, is the least susceptible to a lockout. However, as long as players are collecting economic rents (earnings above their next best option) there is ground to gain for owners.  The equilibrium might just be at about the reserve era split, with maybe 20% of revenues going to the players. Or before they hit that bottom, players give up on their unions and revert to antitrust relief.

Just or not depends on one’s perspective, but professional sports’ economic importance is more about visibility than value of the product.  If the losses continue and the plight of sports unions becomes recognized as too one-sided, that could benefit all union workers.

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