Opposition to trade unions
Encyclopedia
Opposition to trade unions comes from a variety of groups in society, and there are many different types of argument on which this opposition is based.

Strategic strikes and social disruption

Trade unions are sometimes accused of holding society ransom by taking strike actions that result in the disruption of public services – perhaps historically most vividly demonstrated in the British Winter of Discontent
Winter of Discontent
The "Winter of Discontent" is an expression, popularised by the British media, referring to the winter of 1978–79 in the United Kingdom, during which there were widespread strikes by local authority trade unions demanding larger pay rises for their members, because the Labour government of...

. However, where applicable, this may be logically inferred to be the very purpose of strike action per se.

Unemployment

Milton Friedman
Milton Friedman
Milton Friedman was an American economist, statistician, academic, and author who taught at the University of Chicago for more than three decades...

, Nobel Prize winning economist and advocate of laissez-faire
Laissez-faire
In economics, laissez-faire describes an environment in which transactions between private parties are free from state intervention, including restrictive regulations, taxes, tariffs and enforced monopolies....

 capitalism, provided evidence that unionization frequently produces higher wages at the expense of fewer jobs, and that, if some industries are unionized while others are not, wages will decline in non-unionized industries.

By raising the price of labour, the wage rate, above the equilibrium price, unemployment rises. This is because it is no longer worthwhile for businesses to employ those laborers whose work is worth less than the minimum wage rate set by the unions. As such, Governments may seek to reduce union powers in order to reduce unemployment.

Trade unions often benefit insider workers, those having a secure job and high productivity, at the cost of outsider workers, consumers of the goods or services produced, and the shareholders of the unionized business. The ones who are likely to lose the most from a trade union are those who are unemployed or at the risk of unemployment or who are not able to get the job that they want in a particular field.

Where closed shop
Closed shop
A closed shop is a form of union security agreement under which the employer agrees to hire union members only, and employees must remain members of the union at all times in order to remain employed....

s or union shop
Union shop
A union shop is a form of a union security clause under which the employer agrees to hire either labor union members or nonmembers but all non-union employees must become union members within a specified period of time or lose their jobs...

s have been established, unions can become monopolies, where the worker is not allowed to choose not to belong and the company is not allowed to hire non-union workers. This can result in the same problems faced by any other monopoly. By charging higher prices than the equilibrium rate, unions promote deadweight loss
Deadweight loss
In economics, a deadweight loss is a loss of economic efficiency that can occur when equilibrium for a good or service is not Pareto optimal...

.

Harm to ununionized labor

Advocates of unions claim that the higher wages that unions demand can be paid for through company profits. However, as Milton Friedman pointed out, profits are only very rarely high enough. 80% of national income is wages, and only about 6% is profits after tax, providing very little room for higher wages, even if profits could be totally used up. Moreover, profits are invested leading to an increase in capital: which raises the value of labor, increasing wages. If profits were totally removed, this source of wage increase would be removed.

One 1951 study found that instead of harming profits, unions increase the wages of about 10–15% of workers by reducing the wages of the remaining 85–90% of workers.

Efficiency

The effect of union activities to influence pricing is potentially very harmful, making the market system ineffective. Because the price of labour is raised above the market rate, deadweight loss
Deadweight loss
In economics, a deadweight loss is a loss of economic efficiency that can occur when equilibrium for a good or service is not Pareto optimal...

 is created. Additional non-monetary benefits exacerbate the problem.

Cost-push inflation


There can be little doubt that union activities lead to continuous and progressive inflation.
F. A. Hayek, the Constitution of Liberty


By causing wage increases above the market rate, unions increase the cost to businesses, causing them to raise their prices, leading to a general increase in the price level
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...

. Austrian economists
Austrian School
The Austrian School of economics is a heterodox school of economic thought. It advocates methodological individualism in interpreting economic developments , the theory that money is non-neutral, the theory that the capital structure of economies consists of heterogeneous goods that have...

 such as Robert P. Murphy
Robert P. Murphy
Robert P. "Bob" Murphy is an Austrian School economist and anarcho-capitalist.-Education and personal life:Murphy completed his Bachelor of Arts in economics at Hillsdale College in 1998. He then moved back to his home state of New York to continue his studies at New York University. Murphy earned...

, however, dispute this, arguing that the increase in the cost of labour simply means that less of other goods can be bought. He writes:


If unions succeed in wage hikes, and employers raise the prices they charge consumers to maintain their own profit margins, and the supply of money remains the same, then something else has to "give." Either the prices of goods and services in nonunion sectors have to fall and offset the union sector hikes, or people's cash balances need to fall, in terms of their purchasing power.


Effects partly depend on how competitive the market is. If there are many sellers, perfect knowledge, and few barriers to market entry, (competitive markets) then the firms will not be earning any supernormal profits, so the price increases will have to be paid by consumers or through reduction in output. When there are few other sellers, imperfect knowledge, and legal or resource barriers to market entry and firms making supernormal profits, the cost increases would be passed on to consumers (marginal costs will rise, increasing the price). Cost increases may or may not be fully passed on, depending on market structure.

Regressivity of wealth redistribution

Since unionized workers' principal economic weapon is a strike, and since—in the United States at least—employers may permanently replace striking workers, the benefits of unionism increase in proportion to the difficulty and cost to an employer of finding replacement workers. As a result, skilled workers benefit substantially more in both absolute and relative terms from organizing than unskilled workers do.

For example, it is much easier to replace a truck driver than to replace the quarterback of a professional football team or the writer for a hit comedy show, so the returns to a strike by professional athletes or writers are likely to be much greater than the returns to a strike by truck drivers. Accordingly, those who benefit most are highly skilled workers—individuals who would normally not be the beneficiaries of social wealth redistribution schema.

This argument is only valid against craft unions, which organize workers by skill. Industrial unions organize all workers in an industry, regardless of skill.

General Response to Economic Arguments

The argument that unionized workers raise their own wages above their natural rate at the expense of their businesses or other workers assumes that unions never raise productivity to compensate for higher wages. Unions are capable of raising productivity by reducing turnover, by increasing coordination between workers and management, and by increasing workers' motivation. Many unions raise the productivity of their workers, and some even raise it enough to make up for wage increases. That some unions fail to match wage increases with improved productivity is at worst an argument against those specific unions, and not against unionization in general.

Another argument raised by union supporters is that unionized workers will spend their higher wages, driving economic growth and creating new jobs. Union opponents respond that this is an example of the broken window fallacy; union supporters assume that money is more valuable in the hands of unionized workers than in the hands of whoever else would obtain it in the union's absence. Union supporters counter that unions, if organized without violence or government help, are part of the free market; if unions can win higher wages for their workers without coercion, those wages are legitimate.

Finally, any libertarian critique of unions must acknowledge that the current economy is not a free market. While wages may very well track workers' productivity under free market conditions, government distortion of the market can strengthen the hand of big business, making it harder for workers to demand their rightful compensation. Government distortions that strengthen corporate owners and management at the expense of workers and consumers include, but are not limited to, patents, tariffs, banking restrictions, capitalization requirements, transportation and communication subsidies, property subsidies, cartelizing regulations, and land monopoly. Unions may serve the practical purpose of leveling the playing-field between workers and powerful oligopolies.

Racist policies in the past

A consequence of unions' zeal to guard their special interests is that some unions have actively lobbied for racist and anti-immigration policies. An example is the creation of the notorious Asiatic Exclusion League
Asiatic Exclusion League
The Asiatic Exclusion League, often abbreviated AEL, was a racist organization formed in the early twentieth century in the United States and Canada that aimed to prevent immigration of people of East Asian origin.-United States:...

, which was composed mainly of the various labor unions. The Pictorial History of American Labor observes,


The early A.F. of L.
American Federation of Labor
The American Federation of Labor was one of the first federations of labor unions in the United States. It was founded in 1886 by an alliance of craft unions disaffected from the Knights of Labor, a national labor association. Samuel Gompers was elected president of the Federation at its...

 did not draw the color line, but expressed an "ideal of solidarity irrespective of race." Before long, however, the feeling changed. Whether a tendency to exclude black workers from craft unions
Craft unionism
Craft unionism refers to organizing a union in a manner that seeks to unify workers in a particular industry along the lines of the particular craft or trade that they work in by class or skill level...

 was based more on fear of competition or racial prejudice carried over from slave days, it is difficult to decide. But the developing exclusion of the Negro worker from many neighbor unions brought with it serious problems—not just for the black worker seeking job security, but for the white worker seeking the same end...



The record shows that black workers...have been used to break strikes. This availability has usually ended when the black worker has been shown that the union is open to black as well as white.


However, in a study called The Black Worker, Spero and Harris observe that more strikes [in American labor history] have been broken by white workers than by black workers. Most blacks were barred from membership in the AFL not because of their skin color, but because they never had a chance to learn a skill, and "most A.F. of L. unions did not admit unskilled mass-production workers." While the AFL-CIO
AFL-CIO
The American Federation of Labor and Congress of Industrial Organizations, commonly AFL–CIO, is a national trade union center, the largest federation of unions in the United States, made up of 56 national and international unions, together representing more than 11 million workers...

 is the modern version of the AFL, it is much more open to membership by women, immigrants, and different nationalities. Other unions, such as the Industrial Workers of the World
Industrial Workers of the World
The Industrial Workers of the World is an international union. At its peak in 1923, the organization claimed some 100,000 members in good standing, and could marshal the support of perhaps 300,000 workers. Its membership declined dramatically after a 1924 split brought on by internal conflict...

 and the International Longshore and Warehouse Union
International Longshore and Warehouse Union
The International Longshore and Warehouse Union is a labor union which primarily represents dock workers on the West Coast of the United States, Hawaii and Alaska, and in British Columbia, Canada. It also represents hotel workers in Hawaii, cannery workers in Alaska, warehouse workers throughout...

, were created without regard to race from the very start.

Present challenges

Trade unions have been said to still have ineffective policies on racism and sexism in the present day, such that a union is justified in not supporting a member taking action against another member. This was demonstrated by the 1987 judgement in the Weaver v NATFEH
National Association of Teachers in Further and Higher Education
The National Association of Teachers in Further and Higher Education was the British trade union and professional association for people working with those above statutory school age, and primarily concerned with providing education, training or research...

 case in the UK – in which a black Muslim woman brought a complaint of workplace racist harassment against a co-trade unionist. The finding was that in the event of the union offering assistance to the complainant it would be in violation of the union’s duty to protect the tenure of the accused member and the judgement still sets the precedent for cases of this kind that union members who make complaints to the employer of racist or sexist harassment against member(s) of the same union cannot obtain union advice or assistance; this applies irrespective of the merit of the complaint.

Government

Specific countries, especially countries run by Communist parties, while still having unions in name, do not allow for independent trade unions, just as they rarely allow for independent businesses. These state-run trade unions do not function in the same way as independent trade unions and generally do not hold any kind of collective bargaining power, acting to ensure the smooth running of Government industry.

Attempts to reduce the effects of trade unions may include union busting
Union busting
Union busting is a wide range of activities undertaken by employers, their proxies, and governments, which attempt to prevent the formation or expansion of trade unions...

 activities by private companies
Company
A company is a form of business organization. It is an association or collection of individual real persons and/or other companies, who each provide some form of capital. This group has a common purpose or focus and an aim of gaining profits. This collection, group or association of persons can be...

 or state action including governments of authoritarian regimes such as in Adolf Hitler
Adolf Hitler
Adolf Hitler was an Austrian-born German politician and the leader of the National Socialist German Workers Party , commonly referred to as the Nazi Party). He was Chancellor of Germany from 1933 to 1945, and head of state from 1934 to 1945...

's Nazi Germany and Burma's military dictator, Ne Win
Ne Win
Ne Win was Burmese a politician and military commander. He was Prime Minister of Burma from 1958 to 1960 and 1962 to 1974 and also head of state from 1962 to 1981...

. Many democratic governments have also attempted to limit the effects of unions, although success has been mixed.

It has been argued, particularly by market anarchists, that government intervention in the economy has been decidedly anti-union, even in economies like the United States or the European Union. Kevin Carson maintains that the most effective union tactics are either criminalized or displaced by state policy in most countries. Trade unions established themselves through sitdown strike
Sitdown strike
A sit-down strike is a form of civil disobedience in which an organized group of workers, usually employed at a factory or other centralized location, take possession of the workplace by "sitting down" at their stations, effectively preventing their employers from replacing them with strikebreakers...

s, sympathy strikes, secondary boycotts, and hot cargo agreements; these tactics are all illegal in most industrialized countries. Similarly, the original unions doubled as social welfare organization, using union funds to provide healthcare and pensions to workers and welfare to the unemployed. By adopting various welfare-state measures, governments made the populace less dependent on unions.

Left critiques of trade unionism

The political left is often associated with support for trade unionism. However, some groups and individuals have taken a less positive view. In the nineteenth century, a belief in the iron law of wages led some socialists to reject trade unionism and strike action as ineffective. In this view, any increase in wages would lead manufacturers to raise prices leaving workers no better off in real terms. Karl Marx
Karl Marx
Karl Heinrich Marx was a German philosopher, economist, sociologist, historian, journalist, and revolutionary socialist. His ideas played a significant role in the development of social science and the socialist political movement...

 wrote a pamphlet, Wages, Price and Profit, to counter this idea, which had been put forward in the International Workingmen's Association
International Workingmen's Association
The International Workingmen's Association , sometimes called the First International, was an international organization which aimed at uniting a variety of different left-wing socialist, communist and anarchist political groups and trade union organizations that were based on the working class...

 by a follower of Robert Owen
Robert Owen
Robert Owen was a Welsh social reformer and one of the founders of utopian socialism and the cooperative movement.Owen's philosophy was based on three intellectual pillars:...

.

Some early Social Democrats
Social democracy
Social democracy is a political ideology of the center-left on the political spectrum. Social democracy is officially a form of evolutionary reformist socialism. It supports class collaboration as the course to achieve socialism...

 were also skeptical of trade unionism. Usual criticisms were that unions split workers into sections rather than organising them as a class; that they were dominated by relatively privileged skilled workers who were mainly concerned to defend their sectional interests; and that industrial action and organisation were incapable of bringing about fundamental social change. H. M. Hyndman of the Social Democratic Federation
Social Democratic Federation
The Social Democratic Federation was established as Britain's first organised socialist political party by H. M. Hyndman, and had its first meeting on June 7, 1881. Those joining the SDF included William Morris, George Lansbury and Eleanor Marx. However, Friedrich Engels, Karl Marx's long-term...

 summed up some of these views when he wrote in The Historical Basis of Socialism in England (1883):
Trade Unions ... constitute an aristocracy of labour who ... a hindrance to that complete organisation of the proletariat which alone can obtain for the workers their proper control over their own labour ... Being also ... unsectarian and unpolitical, they prevent any organised attempt being made by the workers as a class to form a definite party of their own, apart from existing factions, with a view to dominate the social conditions – a victory which ... can only be gained by resolute political action.

Hyndman went on to urge workers to devote "the Trade Union funds wasted on strikes or petty funds" instead to the building up of a strong Socialist Party on the German model. Other social democrats however were more convinced than Hyndman of the utility of Trade Union action.

Trade unionism is criticised by those of council communist
Council communism
Council communism is a current of libertarian Marxism that emerged out of the November Revolution in the 1920s, characterized by its opposition to state capitalism/state socialism as well as its advocacy of workers' councils as the basis for workers' democracy.Originally affiliated with the...

 and left communist
Left communism
Left communism is the range of communist viewpoints held by the communist left, which criticizes the political ideas of the Bolsheviks at certain periods, from a position that is asserted to be more authentically Marxist and proletarian than the views of Leninism held by the Communist International...

 tendencies. Here, trade unionism is seen as being more useful to capitalists than to workers, and as a kind of "safety-valve" that helps to keep working-class discontent within reformist channels and prevent it from evolving into revolutionary action. They think the government to be the ultimate union to where all workers in the country belong; private unions can go against that. In contrast to other left critiques of trade unionism, these tendencies do not accept that the problems they identify could be remedied by changing the structure, leadership or objectives of trade unions. Instead, they argue that trade unionism is inherently reformist and that revolutionary action is possible only if workers act outside trade unionism through workers' councils
Soviet (council)
Soviet was a name used for several Russian political organizations. Examples include the Czar's Council of Ministers, which was called the “Soviet of Ministers”; a workers' local council in late Imperial Russia; and the Supreme Soviet of the Soviet Union....

 or other channels.

There is also a philosophical difference between the craft unionism
Craft unionism
Craft unionism refers to organizing a union in a manner that seeks to unify workers in a particular industry along the lines of the particular craft or trade that they work in by class or skill level...

 of many AFL-type unions, and the industrial unionism
Industrial unionism
Industrial unionism is a labor union organizing method through which all workers in the same industry are organized into the same union—regardless of skill or trade—thus giving workers in one industry, or in all industries, more leverage in bargaining and in strike situations...

 of organizations such as the Industrial Workers of the World. Industrial unionists decry a practice that they call "union scabbing," in which craft unionists are required by the no-strike clause in their contracts to cross the picket lines of other unions.

There is also the left critique of the tendencies of some labor unions to become bureaucratic
Bureaucracy
A bureaucracy is an organization of non-elected officials of a governmental or organization who implement the rules, laws, and functions of their institution, and are occasionally characterized by officialism and red tape.-Weberian bureaucracy:...

 and for the union leaders and staff to become detached from the needs and interests of the rank and file
Rank and file
In politics and labor unions the rank and file are the individual members of an organization, exclusive of its leadership. The phrase originated in the military, denoting the horizontal "ranks" and vertical "files" of individual foot-soldiers, exclusive of the noncommissioned officers....

 union members, in contrast to the practices of union democracy
Union democracy
Union democracy is a school of thought within organized labor which argues that sound unionism requires adherence to principles and practices of democratic trade unionism; that internal democracy and greater membership control make unions stronger and better able to fight for the rights and...

. The Labor Notes, in the United States, is an example of an organization that attempts to fight this bureaucratic tendency.

See also

Violence:
  • Union violence
  • United States v. Enmons
    United States v. Enmons
    United States v. Enmons, is a controversial U.S. Supreme Court case which held that violence, if carried out in furtherance of a labor union's objectives, does not violate the law according to the extortion and robbery provisions of the federal anti-Racketeering Act of 1934 or the Hobbs Act.The...

  • Freedom from Union Violence Act
    Freedom from Union Violence Act
    The Freedom from Union Violence Act of 1997 and 2007 were identical bills proposed in the United States Congress. Their intended purpose was to amend the Hobbs Act and make violence committed in pursuit of labor union goals a federal crime...

  • Wagner Act

External links

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