Here’s a great little story about the bond formed between a little 5-year-old girl and some construction workers that will make you believe that we all can make a difference when we give a child the gift of our time.
     A young family moved into a house, next to a vacant lot. One day, a construction crew began to build a house on the empty lot. The young family’s 5-year-old daughter naturally took an interest in the goings-on and spent much of each day observing the workers.
     Eventually the construction crew, all of them ‘gems-in-the-rough,’ more or less, adopted her as a kind of project mascot. They chatted with her during coffee and lunch breaks and gave her little jobs to do here and there to make her feel important.     
     At the end of the first week, they even presented her with a pay envelope containing ten dollars. The little girl took this home to her mother who suggested that she take her ten dollars ‘pay’ she’d received to the bank the next day to start a savings account.
     When the girl and her mom got to the bank, the teller was equally impressed and asked the little girl how she had come by her very own pay check at such a young age. The little girl proudly replied, ‘I worked last week with a real construction crew building the new house next door to us.’
     ‘Oh my goodness gracious,’ said the teller, ‘and will you be working on the house again this week, too?’ The little girl replied, ‘I will, if those assholes at Home Depot ever deliver the fuckin’ sheet rock.’

                                Unions Can Be a Good Thing – or Not

On this long holiday weekend, we take a look at the issue it commemorates: labor.

In 1894, Congress passed a law making the first Monday in September “Labor Day.” According to the Department of Labor, which didn’t come into existence until 1913, Labor Day is meant to pay tribute to the “creator of so much of the nation’s strength, freedom and leadership — the American worker.”

With that in mind, let’s examine the role of labor unions from an investment perspective. At first blush, most folks would say unions aren’t good for investing. Expensive contract demands cut into profits and tough workplace rules reduce productivity.

Things are seldom so simple, however. Among industrialized countries, most would be surprised to learn that strike-loving France has one of the lowest union membership rates — 7.7% of the work force in 2008, according to the Organization for Economic Cooperation and Development. The U.S., widely considered light on unions, has a higher rate at 11.9%.

Here are four reasons labor unions can be good for investing — and one why they aren’t.

1 Heavily unionized countries are outperforming everyone else. This is true in the industrialized world, for the most part. The union-heavy countries, according to the OECD, are Sweden, Norway, Finland, Denmark and Iceland. The Nordics have union membership rates of more than 50%. Sweden and Finland are nearly 70%.

And how are these countries doing? Sweden expects growth of nearly 5% this year, and its central bank is tightening monetary policy to tamp down inflation concerns. Norway is growing and its unemployment rate is below 4%. Its central bank is raising rates, too. The story is similar in Finland and Denmark.

Iceland is a completely different story, which shows that union-membership rates are hardly a perfect indicator. Its economy collapsed during the financial crisis as most of its banking system failed.

Union membership in most of these countries is somewhat different than in the U.S. Unions have more say in corporate direction, including board representation, and labor-management relations are more cooperative than confrontational. A minimum five weeks paid vacation doesn’t hurt.

2 The German economic miracle. West Germany’s postwar growth, especially in the 1950s, was phenomenal. The unemployment rate went from 10% to about 1%. Industrial production per capita tripled by 1958.

This rapid growth slowed and eventually choked a bit on the 1990 reunification with East Germany. But in the second quarter of this year, Germany recorded its best rate of growth since reunification — about 9% on a seasonally adjusted annualized rate.

West Germany’s postwar economic miracle coincided with the implementation of “co-determination,” a policy that gave workers substantial board representation and enabled trade unions to work with managers to craft corporate policy.

Labor reforms earlier this decade gave management greater flexibility. And many analysts cite those reforms as helping fuel the current turnaround. Germany’s unionization rate is 19.1%, according to the OECD.

3 UPS vs. FedEx. UPS is heavily unionized. FedEx is not. Which has done better in the stock market over the past 12 months? UPS stock is up 20%; FedEx shares are up 15%.

Over five years, FedEx’s stock is slightly ahead. But it shows that in a straight-up comparison, the unionized company isn’t an automatic loser. UPS has a sometimes-fractious relationship with union members, but that hasn’t stopped the company from doing well in the marketplace.

4 Southwest Airlines. Southwest is heavily unionized. It’s also the most successful airline company in the country, from a profit perspective. It has the largest market capitalization in the sector. It has labor peace — top management frequently seeks out union input when making big decisions. And it seems to make money even when its peers, also mostly unionized, don’t.

5 Detroit — the one reason unions may not be so good from an investment perspective. The unions that once helped build a solid middle class in large parts of Michigan and Ohio played a leading role, along with management, in the demise of Detroit as the car capital of the world.

Job banks where members got full pay to do no work. Overly rigid work rules. Overgenerous benefits. Hostile relations between workers and management. Just about everything to make a cash cow wither away.

One has to reckon with the bankruptcy and government rescue of General Motors and Chrysler and the white-knuckle fight for survival at Ford Motor.

But even GM is making a comeback of sorts. It has filed for an initial public offering, hoping to raise as much as $20 billion. The United Auto Workers union, which owns a chunk of GM through a benefits trust fund, has had to make concessions as part of GM’s bankruptcy and government rescue. Contract negotiations get under way next year and the UAW has already pledged not to strike during the talks.

Dave Kansas at dave.kansas@wsj.com

        I saw a film strip a while back that Walmart uses to fight union organizing. It showed a happy Walmart worker saying, “The Union would just take money out of my check.” Perhaps Walmart workers are not the brightest people in the world, or maybe Walmart just portrays them that way, but a simple mathematical computation would show them that union dues are not a bad investment. 
       
        If a Walmart worker makes $10 an hour and pays no union dues, than he makes $400 a week or $1600 a month. But let’s say he organizes and joins a Union and gets a $1 an hour raise. Now he makes $11 an hour, $440 a week or $1760 a month. His dues are 2 times his hourly rate or $22. So his net gain by joining the union is $160 minus $22 or $138 a month. 
       
        That’s a profit of $138 on an investment of $22.
 
        I’d take that any month. 

       Where else can you get that kind of a return?
 
       Only at the Union.

       It’s important that we grow the company because it makes our jobs and our pensions more secure. But it’s equally important to grow the Union. Many people don’t know how to grow the Union. They think it takes a big organizing campaign to bring in new workers under the Teamster umbrella. But there are many things you can do everyday to grow the Teamsters Union. Here are a few of them.

      First, take your full lunch everyday. We are required to take a full lunch every day and each minute you don’t take and choose to work for free is time that should have been paid to a Teamster. Our building dispatches hundreds of routes a day and if just 8 of those drivers skip their lunch, they have absorbed an entire route that should have been dispatched and run by a Teamster. Don’t let the company reduce our ranks and weaken our pension by skipping your lunch. Every full-time Teamster on the payroll is another person paying into the pension plan.
        Use your 8-hour requests. Every Denver driver gets three 8-hour requests per month. Our center has 45 drivers. If each one reduced their dispatch by one hour (from 9 to 8 hours), 3 times a month, that’s 135 hours a month or the equivalent of over 3 weeks of work that we could generate just by taking what’s is rightfully ours to enjoy. We could add a driver in our center if everyone used all of their 8-hour requests.
        Refuse to work excessive overtime. We have strong 9.5 language in our contract. Use it. Keep your hours under control and the company will need more drivers to cover the routes that we are running ourselves right now by working 10 to 11 hours a day. Just 8 drivers working an extra hour per day are absorbing a route that some part timer has been waiting years to start on. Excessive overtime weakens our pensions and hurts our families.
        Don’t work off the clock. Every time you work off the clock you are giving the company a false impression of how long and how many people it takes to get the job done. Don’t give away precious minutes that someone should be paid for. UPS made $3 billion profit last year, you don’t have to work for free to keep them afloat.
        Stop supervisors from doing our work. Go to your steward every time you see a supervisor working and have him investigate the reason for this violation. Sometimes the reasons are legitimate, sometimes not. If not, then file a grievance. Time slip grievances encourage the company to put on more people.
        And finally, grow the business. The company consistently refuses to hire more people because the growth is flat. They say it would be bad management to add people when the business isn’t growing. So, grow the business and grow the Union. 
        
        None of these simple ways to grow the Union require a degree in organizing or long weekends spent talking to unorganized workers. These are things we can do everyday at work to grow our Union and strengthen our pensions.