"Whenever I go into a restaurant, I order both a chicken and an egg to see which comes first"

Saturday, September 1, 2012

Labor Day–Still Relevant?

On the eve of Labor Day 2012, the question of the importance and relevance of labor unions needs to be asked.  Labor unions were an important means of fighting back against the laissez-faire capitalists of the 20s and were instrumental in pushing for workplace reforms, better working conditions, a fair salary, and social benefits.  Given the backdrop of the hellish conditions found of the time (Upton Sinclair’s famous The Jungle exposed the exploitation of and indifference to the lot of workers in the meat industry) labor unions were considered the savior of the working man and at the vanguard of a new social justice in America.

Part of the success of those unions was muscle.  While strikes were a potent weapon against corporate owners, strikes relied on union members hewing to the party line and not crossing picket lines. In order for unions to be able to break the resolve of the corporations, there could be no breach of discipline.  However, the longer strikes went on, the harder it was for workers to get by on the compensation provided to them, and the long-term, prospective gains of higher wages and benefits were outweighed by the short-term needs of bread and beans.  Muscle, therefore, was needed to enforce workers’ compliance.

Muscle meant hardline, often brutal tactics; and who better to act as labor’s enforcer than the Mafia.  Not only could La Cosa Nostra do what it did best – threat and intimidation – but it could swell its own treasury through an alliance with increasingly wealthy union bosses.  Who can forget the iconic labor film of 1954 On The Waterfront where the heroic Terry Malloy stands up to the bosses and for freedom from terror.

The labor unions became increasingly powerful as they used their money and influence to buy judges and Congressmen.  They had it all.  No government regulators were looking at their books; if cases of extortion or other crimes ever came to court, corrupt judges looked the other way; and union members, like it or not, contributed their union dues while the bosses got rich.

Eventually the American public got fed up with the unions, and thanks to Bobby Kennedy among others, the federal assault on corruption and illegal influence was successful. Freed from the iron hand of Jimmy Hoffa and others, corporations were able to gradually then more rapidly move to the open shop workplace.  As the country grew more conservative and the individual took precedence over solidarity, few workers complained.  Now labor unions in the private sector are virtually non-existent.  They persist with a vengeance in the public sector, but have been retrograde and punishing in their resistance to change.  The most obvious and deserving target has been teachers’ unions. Some states, like Wisconsin and New Jersey have been successful in taking on these unions (just like Ronald Reagan took on the Air Controllers and Margaret Thatcher the miners), but they have not yet gone away.

Unions are still the darlings of the ‘progressive’ Left; and apologists keep trying to figure out ways to resuscitate them.  In an article in the Washington Post (9.1.12) Kahlenberg and Marvit argue that it is never too late especially if the union movement looks to the successful mobilization of the social reformers of the 60s

To revive itself, labor must rediscover its roots as an early civil rights movement for workers. First, labor must make clear, in word and deed, that it is part of a broader movement for social justice and against concentrated wealth and power, not just a special interest concerned only with its membership. Second, unions need to show that they are a vehicle for vindicating the individual rights that Americans hold dear against the power of large employers and the government. Third, like the civil rights movement, labor needs to codify its notion of rights through strong federal legislation. [Fourth] The Civil Rights Act should be amended to outlaw employment discrimination not only on the basis of race and sex, but also for exercising the right to join a union.

None of this is likely to happen.  Sentiments for social justice have been lost in the clamor for individual rights and freedoms and for the liberation of the private sector.  The Occupy movement, railing against the big corporations and demanding a return to the rights of the many over the few has sputtered and died.  Fighting the wealthy means fighting the right to be wealthy and will never go anywhere.  Adding government legislation and regulation are non-starters in today’s political environment, particularly with a Republican victory in November; and amending the Civil Rights Act to add the right to join a union is a perversion of the law.  There is a constitutional case for non-discrimination on the basis of race and sex, but where does the Constitution refer to the Right to Work?

In a 2009 article in The Orange County Register (and reprinted on the Cato Institute website), Daniel Griswold gives compelling reasons why no efforts should be made to revive the labor unions; and our best interests would be served by further neutering them:

Labor leaders blame the decline on union-busting corporations, years of hostile Republican rule in Washington, and a flood of imports from low-wage countries such as China, but the main reason behind the decline of private sector labor unions in recent decades is the anti-competitive nature of unions themselves. Like a virus, labor unions have been slowly sapping the lifeblood of the very industries and companies that employ their members.

Studies comparing unionized companies to those without unions find that unionized firms are less able to compete in the domestic or global marketplace. Unions can help raise productivity and reduce worker turnover, but at a steep cost to unionized employers. Through collective bargaining, unions extract higher above-market pay and benefits from employers, while more rigid union work rules reduce efficiency and blunt the ability of management to adapt to changing market conditions.

Griswold notes that unions “cripple the ability of the companies to compete in an open and dynamic economy” and were largely responsible for the near demise of Detroit automakers, the near bankruptcy of major airlines.  “The inevitable outcome of the "union tax" is that unionized firms inevitably yield market share to their non-unionized rivals, whether foreign or domestic, explaining why almost all the job losses in manufacturing from 1973 through 2006 were among unionized workers.”

De-unionizing the public sector will finally allow states and municipalities to operate more like businesses, rewarding performance and punishing incompetence.  It is only a matter of time, but we are in a hurry.

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