As many of you know, the New York City Transit Workers’ Union elected to strike yesterday. To me, this is one more example of why unions need to be abolished. Their cost has exceeded their utility, and now we are all paying the price.
First off, let’s get something clear. We The People pay for public services through our patronage (fares) and our labor (taxes). A public service like the New York City Transit Authority is not some giant behemoth Enron or ConocoPhilips. It is not a private-sector, for-profit organization. It’s sole purpose is public benefit — in this case urban transportation — and when that benefit is no longer being received, it is time to look at the reasons why and make some changes.
Dare I say that forcing 10 million people to figure out a new way of life overnight, and for an indefinite period, in the depths of winter is not exactly fulfilling the intended purpose? To some, President Bush was clearly to blame for the suffering endured by poor black folks following the Hurricane (yes, screw all those poor white folks that suffered as well), but will those same folks blame the labor union for the suffering of the poor black folks in Brooklyn or the Bronx?
Labor unions rose to popularity during the Industrial Revolution when widespread abuse of the workforce was common. The long arm of the law didn’t quite reach as far as abusive business owners and farmers, who often drove their workforce to unreasonable ends in pursuit of profit. In 1850, when the economy was neither as big nor as mobile, a labor union made sense. The cotton picker, mill worker, or railroad worker had no employment alternatives available and rightly deserved fair pay and treatment.
These days, the situation is quite different. Often, labor choices abound. It is illegal to hire a white person over an equally-qualified minority simply because he’s white. (Although the converse is, unfortunately, sadly still legal.) It is illegal to abuse workers and whistleblowers receive protection. The instruments of law are now accessible to all, as there are thousands of lawyers that will work free-of-charge to take a bite out of an abusive employer. The labor situation is nothing like it was 50, 100, or 150 years ago.
So we can see that the worker’s need for protection and collective bargaining have been filled by the system over time, a trend that continues unabated today. In fact, many individual union members that I know will happily admit that they could personally do better without a labor union than with one. The reason is explained with a brief lesson in economics. Collective bargaining is only effective when the union remains united. Wage competition between members of the union would reduce the ability for the union to negotiate a higher average wage (read: more total income received by union and its management) since the employer would then have a supply of many workers (the unaffiliateds and the union) instead of one (the union).
As a result, tenure and lack of performance-based compensation highlight the trouble with unions. Why would a worker need a labor union if he can seek and find better pay by tying his compensation to performance? Worse yet, who would want to be in a union if those allowed to work outside of it are paid better and need not rely on tenure to increase wages or availability of work?
Labor unions have a negative effect on productivity. Any student of Soviet-style communism knows that eliminating competition from an economy stifles production. If a worker is guaranteed certain income and job protection without being required to produce for it, that worker will not be incented to produce. In aggregate, union workers do not help the employer compete in the marketplace, which hurts the employer’s revenues, continually increases costs, and ultimately causes the whole operation to expire to the detriment of both the employer and the workers.
But labor unions are also potentially harming the public in a way that would not be tolerated in non-unionized shops. Unions often can protect individuals from personal liability through the exact same process of collective risk assumption. In a non-union shop, a malfeasant employee could be sued for negligence on the job if such negligence caused harm in others. In a union shop, the employee is protected from responsibility and liability by a cabal of union lawyers who protect the employee at all costs. Ultimately, those who suffered are not fairly compensated for damages. Union labor also results in an absense of deterrence, as well.
Some New York City residents certainly have health risks associated with walking around in 20 degree temperatures to get to doctors’ offices, workplaces, and grocery stores. Will the union compensate an ailing elderly citizen who breaks her hip walking to the grocery store in the winter because there’s no bus service?
According to OpenSecrets.org, 8 of the top 10 political contributors of all time are labor unions. Of the roughly $200 million contributed to all political campaigns by these 8 labor unions, about $190 million of that went to Democrats. (A negligible $8 million, or 4%, was contributed to Republicans.)
For those in the know, a labor union closely resembles a cartel. Both labor unions and cartels leverage consolidated power reduce choices in the marketplace. Cartels reduce the democratic power of prices; labor unions reduce the democratic power of performance and productivity. Both are anti-competitive, which essentially translates to inequality and unfair environments.
On top of that, the two biggest contributing labor unions are the American Federation of State, County, and Municipal Employees and the National Education Association — both oversee employees responsible for public services, not for-profit private enterprises. The unions are not sucking up the resources of the wealthy, the powerful, or the profit-seekers. They’re sucking up the resources of you and me!
In short, labor unions:
- Have outlived their original purpose, meaning we the people pay extra for something not needed
- Threaten the well-being of public service recipients, meaning we the people suffer at the hands of an unneeded institution
- Stifle competition and productivity, meaning we the people get less for our money
- Directly, disproportionately, and artificially affect government and political workings
- Reward their own members for meaningless milestones, while punishing those of most value
- Consolidate political power amongst an unelected few
Are labor unions rightfully headed for extinction or are they grandfathered into our nation’s fabric, like the New Deal and other social programs, as an unnecessary and unaddressable tax on future generations?