The humorous picture says it all, doesn’t it? Thanks to labor unions, we enjoy five-day workweeks, break time, overtime pay, and so forth. It sounds great on the surface … except for the little problem that it’s not really true.
While labor unions certainly did champion these things—a point I will return to shortly—it was employers who first implemented such reforms. They did so for one very simple reason: to improve productivity. Efficiency studies conducted in the late 19th and early 20th centuries AD demonstrated that a worker’s effectiveness would decline quickly after a certain length of time without ample rest periods. Why pay one worker for 16 hours of labor, when two eight-hour employees can produce significantly better results for the same price?
As an aside, vacations and other extended leave times were a touchy subject for historical reasons. In the early years of the industrialized economy, employers faced the problem of workers who would simply disappear after several weeks or a few months. This was a holdover from earlier impermanent employment traditions. Historically, agrarian laborers had to work regularly only during the planting and harvesting seasons, saving enough money to last them through the winter or other down times. This cultural mindset took a good deal of time to change in the continuous-production environment of the industrial economy, so employers were equally slow to allow latitude for time off and continued employment.
Nevertheless, the competition between corporate management and organized labor was having synergistic effects within the free market, improving working conditions, increasing profits, and generally enriching everyone. That’s when things went too far. While the labor unions hadn’t brought about the workplace reforms on their own, what they did manage to do was to get them mandated by law.
Today, this legislative achievement is commonly presented as a great benefit for working people. In fact, labor laws have simply limited workplace flexibility, often to the detriment of the worker. Younger workers—those just getting started in their careers—are particularly handicapped. Eager and full of energy that their older compatriots may lack, these workers are often willing to work harder for longer hours at lower pay rates. Doing so would allow them to increase both their income and experience much more rapidly, but labor laws prevent employers from “exploiting” their enthusiasm and productivity—making it that much harder for young people to build solid financial futures.
Similarly, union shops tend to encourage mediocrity in the name of protecting workers from arbitrary employers. The least competent workers get to retain their jobs, but the best workers see little reward for their efforts. The consumer ultimately gets a less satisfactory product or service at a higher price.
Labor unions have become an entrenched part of the political system, just like any other moneyed corporate interest group. The unions themselves can easily become focused more on expanding their own influence than on improving the lots of individual members. However, as they are co-opted and subsumed by political parties, the unions actually lose power. When a given party can take their members’ votes largely for granted, what else can organized labor accomplish?
Today, this legislative achievement is commonly presented as a great benefit for working people. In fact, labor laws have simply limited workplace flexibility, often to the detriment of the worker. Younger workers—those just getting started in their careers—are particularly handicapped. Eager and full of energy that their older compatriots may lack, these workers are often willing to work harder for longer hours at lower pay rates. Doing so would allow them to increase both their income and experience much more rapidly, but labor laws prevent employers from “exploiting” their enthusiasm and productivity—making it that much harder for young people to build solid financial futures.
Similarly, union shops tend to encourage mediocrity in the name of protecting workers from arbitrary employers. The least competent workers get to retain their jobs, but the best workers see little reward for their efforts. The consumer ultimately gets a less satisfactory product or service at a higher price.
Labor unions have become an entrenched part of the political system, just like any other moneyed corporate interest group. The unions themselves can easily become focused more on expanding their own influence than on improving the lots of individual members. However, as they are co-opted and subsumed by political parties, the unions actually lose power. When a given party can take their members’ votes largely for granted, what else can organized labor accomplish?
None of these problems mean that labor unions are a bad thing. Like any corporate entity, they have strengths and weaknesses. Unions are at their best when it comes to collective bargaining, which can give employees as a whole the same short-term advantages enjoyed by an employer over an individual worker. Of course, both employers and union members can still suffer in the long term, when they misjudge market conditions.
The fundamental problem faced by both unions and corporations is their desire to use the political process and the coercive power of the state to advance their own interests. The result is stagnation and inefficiency. The corporations protect established businesses by making it more difficult for entrepreneurs to enter the marketplace. The unions protect the positions of veteran workers at the expense of fewer opportunities for those entering the workforce.
While labor unions can be an asset to the worker at the bargaining table and have had and can still have an important voice in establishing the healthiest and most productive working conditions, they certainly don’t deserve all of the credit for workplace reforms and improvements. Furthermore, the dangerous excesses of unionism also have to be recognized—just like the dangerous excesses of large corporations and other powerful commercial interests. All of these entities will be tempted to use government authority for their own selfish goals. When this happens, we all pay the price.
The fundamental problem faced by both unions and corporations is their desire to use the political process and the coercive power of the state to advance their own interests. The result is stagnation and inefficiency. The corporations protect established businesses by making it more difficult for entrepreneurs to enter the marketplace. The unions protect the positions of veteran workers at the expense of fewer opportunities for those entering the workforce.
While labor unions can be an asset to the worker at the bargaining table and have had and can still have an important voice in establishing the healthiest and most productive working conditions, they certainly don’t deserve all of the credit for workplace reforms and improvements. Furthermore, the dangerous excesses of unionism also have to be recognized—just like the dangerous excesses of large corporations and other powerful commercial interests. All of these entities will be tempted to use government authority for their own selfish goals. When this happens, we all pay the price.
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