Submitted by James E. Miller via Mises Canada blog [10],
Labor unions are a dying breed. According to [11] the Pew Research Center, union membership in America “is at its lowest level since the Great Depression.” In 1983, there were approximately 17.7 million union workers. Today, that number [12] stands at 14.5 million, with every estimate showing a continued downward trajectory. Clearly, the Norma Raes [13] of the world are going extinct.
But as Samuel Johnson quipped [14], one should never dismiss the triumph of hope over experience. In celebration of Labor Day, the leftie rag New Republic recently published an interview [15] with labor strategist Rich Yeselson defending the role of unions in the U.S. As a labor organizer, Yeselson’s bias is on full display. Instead of giving an objective view of stagnating union membership, he obfuscates to boost his own profession.
When asked if unions are dead, Yeselson rightly says “no” while pointing out that millions of Americans are still active members. Unions not only retain fairly hefty membership, but also own valuable real estate in big cities and pension funds worth billions of dollars. Despite declining membership, there is still plenty of capital left over from organized labor’s heyday.
Fancy buildings and promised retirement benefits aren’t enough to reverse the downward trend however. Public opinion about unions is also on the decline. Between Volkswagen plant workers voting against [16]joining the United Auto Workers and the confectionary company Hostess declaring bankruptcy [17] to rid itself of unionized employees, there is a growing perception of greed directed at labor organizers. There is also the uncomforting fact that state and local governments – the industry most heavily unionized in the country – are underwater [18] on their pension obligations. Even politicians are starting to face the truth: there is less money in government coffers than was promised. New Jersey Governor Chris Christie recently toured his state telling [19] voters that pension funds “will go bankrupt if we don’t make significant changes to it.” He won’t be the last to break the bad news.
Yeselson plays stupid to this fiscal reality. Throughout the interview, he defends the legacy of unions with sophistry and economic inanity. Yeselson acknowledges that unions often try to “take the wage out of competition.” But, he asserts, this is not a problem. With locked-in wages, “the quality of the product, innovation, etc. are the ways that companies, ideally, compete.”
This is patent nonsense. Wages are an integral part of running a business. Management can’t determine costs without accounting for the price of labor. Competition in wages means business can attract the best and brightest workers. An industry without workers who compete for wages is stagnant, unable to innovate to its full capacity. For someone on the side of worker well-being, Yeselson doesn’t want to see business competing for employees by offering higher wages or more generous benefits.
The biggest whopper of the Yeselson interview comes when he asserts that unions are “inherently conservative institutions which historically developed parallel with the development of capitalism itself.“ Ezra Klein backs him up on this point by claiming [20] “you’ll find unions pretty much everywhere you’ll find capitalism.” This is a classic mistake of correlation with causality. Just because the labor movement accelerated with American economic power during the twentieth century doesn’t mean it helped in the process. If anything, unionization inhibited the ability of the entrepreneurs to succeed. Yeselson says unions “are as much a part of capitalism as Henry Ford or Apple.” That’s also incorrect; Henry Ford and Steve Jobs created products for the marketplace. Unions don’t produce anything for consumers. They leech off the profits of business.
Yeselson even has the gall to say that unions are inherently capitalist because they “use contracts…to link their members to the fortunes of the companies they contract with.” Clearly, Yeselson needs to brush up on his common law. Contracts aren’t contracts when they have the implicit use of force at their backing. Business either chooses to bargain with unions by choice or by force. The National Labor Relations Act – passed at the height of the New Deal – compels some private U.S. companies to bargain with unionized employees. Yeselson tries to say that “contracts are not unilaterally imposed at gunpoint upon terrified managers” but “are bargained between two institutions who have both common and conflicting interests.” Again, why must management bargain to begin with? Why are there deliberations over wages and benefits?
With government acting as the muscle behind unions, there is no choice. Company owners must bargain or face the threat of fines or jail time. This isn’t an amicable relationship. It’s a thuggish shakedown. Is it any wonder why Jimmy Hoffa is such an intolerable brute [21]?
Ayn Rand had unions pegged best when she declared their purpose has never been to empower the average worker. “Unions and trade associations,” she wrote, “are not directed against employers or the public but against the best among their own members.” The goal has never been about “raising the weak in any way whatever, but simply forcing the strong down to the level of the moron.”
Yeselson ends his futile attempt to defend unions by bringing out the classic trope: “Unions, as the old saying goes, the folks who brought you the weekend.” This is nothing but an elementary school myth. A bunch of greasy-haired petition-gatherers didn’t create the weekend. Capital accumulation and rising productivity make it possible for people to take off work at the end of the week. Otherwise, the drop in commercial activity would render a business unprofitable, and thus unable to keep the lights on. This has always been the great secret behind unionist fiction.
With economic growth still staggering, the decline of union membership can’t come soon enough. Freed from the demands of overpaid bargainers, innovation and productivity inevitably rise. Increasing numbers of Americans are migrating [22] to states with less strenuous union laws. When given a choice, workers go where the money is; not where there’s tough talk about bargaining rights. Labor is important; business is important; and solidarity is important. They are all no doubt conservative principles worth maintaining. But the right of every man to choose for himself takes precedent over all. You can’t build without capital; just as you can’t organize without sovereign will. Unions violate the spirit of voluntary association by the very fact they have government-backing. Yeselson is lying to himself if he sees forced collective bargaining as a necessary component of capitalism. And he is doing workers a great disservice by encouraging the formation of unions.
