>Can Unions and Democracy Co-exist?


That is a silly question. Any person that suggests that unions and Democracy cannot co-exist needs to explain himself/herself.

I guess I better get started …`

Unions were born out of the abominable conditions created by corporations that had more interests in money than ensuring that their workers were safe and paid decent wages. Lots of people were available to work in the 19th century, keeping wages low, and competition for jobs high. Employers had the attitude that if one worker gets out of hand, fire him, and get a new employee. Or, if a worker dies, hire a new one. With a huge pool of labor, without rights, without organization, people were essentially cattle.

Marx, Lenin, and Sydney and Beatrice Webb all believed in the organization of people, and thus, labor, for the benefit of the Working Class, the Proletariat. Peasants, the uneducated masses, had one asset to bargain with – their own labor, their own sweat, blood, toil, and tears.

People did not organize to simply argue for better wages, benefits, or improved working conditions. No, there were other additional motives to organize, too.

The Knights of Labor, founded in Philadelphia, not only sought typical labor improvements, but also sought to exclude Chinese and other Asians from participating in the labor market.

The American Federation of Labour (AFL) controlled membership. Initially, blacks were allowed memberships to the union, breaking down racial barriers to employment. Later, blacks were not viewed as a skilled work force and were then banned from membership.

union-sharkTrade Unions, those that specialize in specific economic sectors, electricians, police, teachers, steelworkers, etc., control entry into those fields, employment opportunities in those fields, and job contracts in those fields. Trade Unions control wages and benefits, through collective bargaining.

Trade Unions, through the political influence, then control the expense to the consumer by controlling the economies associated with Labor. Trade Unions control the size of the labor pool by controlling the numbers of people who are licensed or certified. Trade Unions control wages and benefits, and therefore control the price of the service or product. Whether that cost is a Police Officers salary, a Teachers salary, or an Electricians salary, that cost is not established by the Market Prices.

And therein lies the rub.

Information in the 21st century is a far more free-flowing commodity than it ever was in the 19th century, and throughout much of the 20th century. Corporations can behave as they once did, decades ago, abusing employees, however, word will get out about poor business practices, and the company will have a public relations nightmare on their hands.

Corporations also have an incentive to treat employees relatively well. Content employees are productive. Productive employees make the corporation money. And, money pleases shareholders. Companies that treat employees poorly are not acting their own best interest, undermining their own investment in people, which undermines the bottom-line, further hurting relationships with stakeholders.

Trade Unions represent Special Interest Groups. In fact, Trade Unions are Special Interest Groups, by definition. They act to protect their own interests above the interests of the larger group.

In Wisconsin, we see these dynamics playing themselves out. Politics of SIGs versus Economics.

Trade Unions (Special Interest Group) are seeking to protect a rarified environment built upon decades of essentially Social Democratic policies that provide a small number of workers benefits unavailable to the majority of workers.

Furthermore, the level of protection afforded to Trade Unions allows for wages to be set and fixed against market prices, provide for public subsidies of benefits, provide levels of protection for employees that are unfit for work, and encourage and promote inefficiencies within all levels of any given occupational sector.

The costs of Trade Unions are far greater than the mere cost per worker in terms of salary and benefits. Society loses the benefit of wage competition, of encouraging innovation, of encouraging and promoting employees through merit, and eliminating wasteful practices, and unproductive employees.

Of course, Unions and Democracy can play together. That is not the question that should be asked.

The real question to be asked is, “Should the Inefficiencies Created by Unions be Tolerated in a Free Market Economy?” Or, “Unions, But At What Cost?”

Trade Unions are political entities that influence everyone’s pocket-book. How deep are people willing to allow Trade Unions to delve into their pockets?

Adam Smith’s “The Wealth of Nations”
Todd Buchholz’s “New Ideas from Dead Economists”
Thomas Sowell’s “Applied Economics: Beyond Stage I”

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