In its Labor Day tribute, the New Jersey Star-Ledger plugged unions in its editorial As unions fade, middle class fades with them. In my comments posted below the article, I chose to focus on two points. The last three paragraphs read:
Politics is a factor [in the decline of union membership], however. Labor suffered a defeat in February, when Volkswagen workers in Chattanooga rejected the UAW even though VW voiced its approval of a union shop. The 53-47 defeat was influenced by Sen. Bob Corker (R-Tenn.), who figured it was time for government to interfere with the free market.
Corker said VW would bring a new SUV line to the plant only if workers rejected the union; VW flatly said it wasn’t true. But the rules were set by the Tennessee legislature, which said state incentives for plant expansion would be jeopardized if the UAW won its election.
Anyway, fire up the grill, Labor Day is here. But labor’s day is nearly over, if workers lose touch with their legacy. And if big labor dies, then the greatest invention of the 20th century – the middle class - dies with it.
My comments:
“The 53-47 defeat was influenced by Sen. Bob Corker (R-Tenn.), who figured it was time for government to interfere with the free market.”
What free market? The Wagner act forces employers to deal with unions created by worker votes. If the vote went the other way, it would have violated the right of the company to decide for itself whether or not to deal with the union, and violated the rights of the minority of workers who voted against unionization by forcing them to join the union or lose their jobs. In a free market, willing workers are free to form unions, and employers are free to contract with them or not, based on what value the union has to offer the employer in exchange for meeting their requests. Free market unions operate like other traders, offering a value to the employer in exchange for added member benefits through voluntary agreements. Wagner unions are not free market unions. Whatever Corker did, he was not interfering in the free market.
“. . . if big labor dies, then the greatest invention of the 20th century – the middle class - dies with it.”
The idea that the middle class is a consequence of 20th Century unionism is ridiculous. The middle class arose in the 19th Century as a consequence of the rise of free market capitalism. Capitalism liberated the average man from the feudal caste system, enabling him to flourish according to his own ambition and ability. In turn, the businessman rose to prominence in the American economy. It was the businessman who invested in the labor-saving technologies that raised the value of labor, creating one new industry after another and, after centuries of stagnation, paving the way for a quadrupling of real wages from 1800 to 1900—this, even as the country absorbed millions upon millions of mostly poor immigrants. Rising wages follows productivity. Unions are not the cause.
I can attest to this connection in my own experience as a Union plumber [now retired]. I entered the plumbing trade in 1966, and the union a year later. Over the decades, my real wages rose smartly, but so did trade productivity due to advances in tools and materials provided by contractors. It is this productivity that made it possible for my union to negotiate for and win higher wages. General wages can not rise apart from productivity. Unions can help facilitate the rise in productivity by providing its members training in the new technologies, as construction trade unions do. But unions, as such, can’t raise real wages. Only productivity can, and the impetus behind productivity gains comes from business investment, not union formation.
Unions can be a positive force. To the extent that unions are free market structures, they play a positive role. To the extent unions are coercive, they are economically destructive and immoral, gaining their advantages by taking rather than trading.
Related Reading:
Productivity, Not Labor unions, Created the Middle Class
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