The Moneyball Method
Regardless of the goals of any group, political or otherwise, one common thread repeats: garner the highest yield for any effort applied. The political struggles between unions and corporations are no different. Both are trying to capitalize on any gains they make and pick the battles they are most likely to win. Minimizing expenses and maximizing results is a tactic used by both sides and for the very same reasons. It is a strategy employed in nature and relies on the conservation of energy. After all, nobody, regardless of the situation, wants to get the least possible returns for their efforts. It is the surest way to drive oneself into extinction. For this reason, humans are no different. While we might enjoy the fruits of our labors as a species, we prefer to engage in leisure activities as much as possible as it means we have reached a point where our work nets us more than the minimum needed for a sustained existence.
In addition to the analogy to the natural world, corporations and unions act in a way that is analogous to the sports world. As the title of this section alludes to, the reference is to what the Oakland Athletics used in 2002 to tie the record for the longest winning streak. Though that was not the goal of the club, it is was the result of a strategy designed to get the most out of a budget that had little leeway and was seen as a course destined to failure. The analogy however works to lay out some of the basic issues between the unions and corporations as well as how they work. The Oakland Athletics are known as a “small market” team despite being based in the 47th largest city in the nation. Granted, it is nowhere near the size of San Francisco or Los Angeles, but its proximity to San Francisco and the surrounding communities of the San Francisco Bay Area, a Bay Area Rapid Transit station named after the stadium with an elevated walkway connecting to said stadium, and portions of the San Joaquin Valley being within driving distance gives the team a large enough fan base that one would think it is anything but a small market. The San Francisco Bay Area alone has 7.46 million residents.
An examination of the city might shed some light on why it stands out and the importants it plays in the shape of the club’s market status. Oakland is an industrial city with a port. These two industries have been the base of the local economy and have led to its recent troubles. Thus, it has been hit hard by the recession and the technological changes over the last twenty years. Though nowhere near Detroit’s unemployment levels, the city is not known for its residents’ buying power. Some jokes refer to Oakland as an inordinately large crack house and sections of downtown are known as “Oaksterdam” for its medical marijuana shops. It should come as no surprise then that attendance for home games is abysmal when compared to other teams in Major League Baseball.
Yet despite these drawbacks, Oakland has been able to challenge so-called “large market” teams like the New York Yankees and their massive payroll. The Yankees are known for their big name players and consistency in winning division championships if not the World Series. As New York plays host to one of the largest financial sectors around, there is another allusion to the corporation/union divide. This is because the city itself is as identified with Wall Street and finance in the way that Oakland is for its blue collar roots. Add to this information the population in the whole metropolitan area spans four states and encompasses 22.23 million people. That makes it roughly three times the size of the SF Bay Area and it too has two baseball teams. The Yankees, though, are the 800-pound gorilla of baseball. Burning through so much money to attract talent is how they have won so many championships. And with so many residents close enough to go to a game or buy team merchandise, it is easy to see how the team is able to garner so many division and league titles.
Baseball is no longer the national pastime with all the nostalgia of regionalism that it once was where players often played with the same team for their entire careers. For the fans this may still be the case, but not for the corporations that are the managing staffs for each team as well as the commission that oversees Major League Baseball. The game is largely built around money, hence the references to small- and large-market teams. Players now go where the money is, just like many clubs have, including the Athletics. They once played in Philadelphia before moving to Kansas City and then to their present location. Each of their previous locations now house teams of their own, showing just how large of a market they were for professional baseball. The trend is something that has also applied for workers. People once stayed with a company for their entire careers before retirement. Not anymore. The average person will have seven different careers over the course of his working life.
Free agency in sports is something we have come to expect as sports fans. Why would a player who is that talented want to stay with a club that has no discernible chance of winning a championship stay with a losing team if offered a larger salary with one that does have a shot at a title? Corporations play the same game with their employees and as a result, unions are cut out of the picture. No need for a fussy mess of a contractual system that hamstrings wages for other employees, incentives to stay on the floor and avoid a strike, or even long-term baselines for minimum compensation packages. Free agency for people in the corporate world comes down to who can offer the most attractive incentives in exchange for a person’s skills. Unions obviously lose out because of this as their goal is collective in nature, which does not favor varying salaries for employees who may have better negotiating skills than others in the worker pool. White collar workers are more likely to play the job market game as free agents than blue collar workers for many reasons; the most common reason is the nature of corporate jobs compared to manufacturing. Interpersonal skills go a long way in making connections within the company and the businesses that partner with it. Manufacturing does not offer frequent interactions as the focus is on making a physical product that can absorb the worker’s time.
The shift from a manufacturing base to one that is more services-based, which includes programming, has also had an impact on the unions. The shift favors the free agency strategy of employees as they do not have to worry about whether they will be subject to rules that may or may not favor them. Programmers might work as part of a team assembling new products, but they are hired for their talents, not their ability to ply a trade with precision and accuracy on what amounts to similar situations day-in and day-out. Unions also have a tendency to be overly protective of their current members, which discourages people from trying to get their foot in the door at the beginning of a career, not to mention union dues which can hamper a person’s living arrangements if the costs of living are not as equitable to the net pay before dues are assessed. Free agency is a much more promising method of making a living under such conditions and the new manufacturing base of electronics is peopled by workers who often go to college, which has been the traditional path of the white collar world. Free agency also favors and empowers corporations since they can negotiate compensation packages with an individual without worrying about a loss of power on their part.
The inflexibility of unions and that of corporations come down to the same thing: greed. This might sound shocking, but neither side is altruistic in their goals. As mentioned earlier, everyone wants to maximize what they get for the least amount of effort as possible. Unions try to leverage as much for their members as possible and do their best to lock out non-union employees so as to not have any competition for their power. This is an artificial system that, while it helps workers have agency when dealing with those who own the means of production, does not do labor any favors if it remains entrenched and opposed to a mixed workforce. Without competition, there is no innovation or even a way to maintain the flexibility critical to a sustained panel that can negotiate with the companies. Additionally, the inflexibility has often come at the expense of innovations which increase productivity because it can lead to the loss of union members. The automotive industry is a great example of how this has happened. The assembly lines have been automated, meaning fewer workers are needed to build cars, but those who are employed need more education that before in order to run the complex machinery that does the work more efficiently and safely than any human could. Allowing rapid change does not benefit the union, help it retain its power, or protect workers from losing their jobs.
Corporations do not want to give away anything more than they have to. It is probably an obvious statement, but nonetheless true. How else can the organization stay in business if it cannot make a sufficiently sized profit that allows it to expand or absorb unexpected expenses? The amount that is left over sometimes goes into someone’s pockets in the form of bonuses and salaries for those who manage to make the company so profitable that it has such financial stability, but a lot of it goes into expanding the organization or being socked away for the unexpected. The workers might keep the machinery running, but because they do not manage the human capital to such a degree as to expand the company’s reach they do not receive nearly as much in compensation. Whether this is fair or not is not the subject of this piece, however. The difference is mentioned inasmuch as it applies to the way both sides try to earn the greatest profits at the least cost.
Going back to the baseball analogy, the unions employ something akin to Sabermetrics. Unions do not buy the best team they can assemble; rather, they pay for the most consistent one through the compensation packages they can get for their employees and the dues they can charge. By maintaining that sustained output, the union is able to keep in the running with the corporations that employ union members since they have much larger resource caches. This is one of the ways collective bargaining helps unions secure guarantees for employees. However, unions have to pick their battles well. They cannot merely choose to go on strike to get attention; they need to ensure that there will not be a public – or political – backlash for employing the tactic. This is where consistency comes in handy since it is not a sprint, but a marathon that unions must run against corporations. They have to work through their special interest and lobbyist channels just like the corporations do. But, the unions offset the greater amount of lobbying corporations can engage in with some strategic areas of labor that they dominate, like government and various trades. Unsurprisingly, athletes have unions as well as referees who officiate the games so that the corporate offices do not determine wholly the value of the talent on the field. When untalented individuals are brought in to do the work of these seasoned professionals, it becomes clear just how skilled union members are at their jobs and how much of a value they provide. The replacement referees used by the National Football League at the beginning of the 2012 season made this painfully clear.
There are times when the tactics use by both sides show how manifestly greedy they truly are. A lot of what is done comes down to instilling fear with a healthy dose of intimidation thrown in for good measure. They are the same tactics used in political elections; just sometimes they go a little to the extreme as the tactics do not necessarily happen in public view the way political campaigns do. Take a look at the Teamsters in the 50s through the 70s. The influence of organized crime over that union shows how shady and corrupt the unions can become. Jimmy Hoffa is essentially synonymous with the problems that can surround unions. What better icon of fear and intimidation than the mafia?
Corporations are no saints either. There are the historical instances such as the Pinkertons at the Homestead Strike in 1892. Today, there are the influences of the Koch brothers and the US Supreme Court’s Citizens United ruling. The net result is not unlike the Yankees trying to buy up all the talent their money can attract, a tactic that financial companies have used in the guise of bonuses and the like to attract employees. In regard to the Supreme Court ruling, the point is to ensure corporate power is unchallenged as much as possible by letting companies flood the media channels with more advertising than their opposition can muster. Yes, unions can benefit from the ruling as much as the corporations, but do they have the deep pockets of their competitors? Neither side wants to lose, but as they need each others to remain as honest as possible, they are stuck with one another. The two provide a checks-and-balances system necessary to drive competition between diverse industries as well as the future of the capitalist system just like the political parties are supposed to do with each other.
Given that much of the fight between the two groups happens in the political arena, unions and corporations have turned to the use of Political Action Committees. Yet, the traditional PACs are constrained by the rules that govern elections and the limits placed on contributions. The new free agents in the political arena where both groups can duel without restraint are the super PACs and other organizations that are not affiliated with any particular candidate. The amount of money they can spend is astounding, but again, where the corporation backed groups can blast the airwaves with their messages, the union groups have to target their messages and be more strategic about their placement, which usually follows a grassroots approach in communities. After all, the services most people rely upon to keep an orderly society in place all have unions: teachers, police, and firefighters, to name a few. If they went on strike or had a mass flu “epidemic,” it would adversely affect the community and shows how the steady consistency keeps the community on a sustainability winning streak. This is the same method that Oakland used to push itself to one game shy of making it to the 2002 postseason. The players Billy Beane selected were based on statistical analysis. One of the reasons why this approach was necessary is rooted in the slashing of the team’s operating budget. It went from one of the highest paid rosters in baseball in 1991 after it went to three consecutive World Series to one of the lowest.
Why the change? This is speculative, but the economics and population numbers for the city of Oakland most likely have something to do with it. According to the 2010 Census, Oakland has a population of 390,724 people. The current owners want to move the team to San Jose, the third largest city in California boasting a population of 945,942 people. It has twice the population of Oakland and sits in the heart of the Silicon Valley, a decidedly white collar region of the SF Bay Area and thus a significantly higher likely discretionary budget amongst its residents. The shift moves the team from a union heavy town to a free agency dominated city, which mimics the shift the country has experienced as a whole from one form of industry to another.
Much like the resistance unions have towards technological innovations that threaten their size and power, the city of Oakland, along with many fans, does not want the team to move. After all, it brings in revenue for the city and there is easy access to it by several public transportation lines. But, the stadium itself is not in the most ideal location for the team, not to mention the cash-strapped status of Oakland itself. The team owners are trying to follow the money like previous owners have done before. The San Francisco Giants also oppose the move because they have a minor league team, the San Jose Giants, in the area. There is a bit of protectionism going on from the corporate end in what is a form of NIMBYism. San Jose is seen as the corporate backyard of the Giants. Ironically, the tactic is out of the union playbook. The move to a new stadium would be innovative for the Athletics as they currently play in the only remaining dual use football/baseball stadium in the nation. Oakland is trying to build a new park for the team, but finding a place to put it and ensuring people would go there is not clear. However, the lure of San Jose’s higher salaries and population seems to be more important than where a new stadium is and if it is as innovative as needed for the franchise. Blocking any form of change towards the future is not characteristic of the corporate strategy, yet this shows a clear example that they as well do use the same tactics as their chief rival.
The move to greener pastures is essentially what a corporation tries to do when it outsources jobs to locations where unions have no say. If the case cannot be won to move towards free agency and empower the companies where they are, then it stands to reason that the capital can be spent to go somewhere else, preferably a location where right-to-work laws are strong or unions are nonexistent, thus lowering the threshold for wages, which is not unlike the proposed move of the Athletics to San Jose. The unions do everything to oppose such moves because it threatens their power base and their employees’ standards of living, all of which come down to the amount of currency and the leverage that that comes with and is what both sides work to accrue. The tactics are similar, but the methods are often not seen as the same even though they are. The underlying problem is greed at all levels of the game. Winning when the game is rigged against you is hard, but it can be done. Unions have shown that time and again, so have corporations. In baseball, Oakland almost did it this year with nineteen rookies, which keeps their payroll so low. Ironically, the corporate brand of the team is “green collar baseball,” echoing the city’s roots they are trying to escape. This is telling and shows that corporations and unions are not as different as they would like people to believe. They have similar beginnings, they have similar interests, and they use the same methods to get what they want.
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