Labor Unions, Thugs, and Storm Troopers

Started by CubaLibre, January 04, 2013, 10:23:28 AM

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CubaLibre

Somewhat long but excellent read about labor unions. Some of the jucier tidbits:

QuotePorter and almost everyone else is totally unaware of these facts. Above all they are ignorant of the fact that the wage earners' standard of living does not rise from the side of wage rates rising but from the side of prices falling. As indicated, the fall in prices need not be an absolute fall. But it must at least be a relative fall. That is, prices must fall at least in comparison with what they otherwise would have been if the only factor operative were an increase in the quantity of money and volume of spending.

When one grasps the fact that the standard of living of wage earners rises from the side of prices falling rather than wages rising, it is but a short step to the conclusion that labor unions are not only utterly ignorant about how to raise the standard of living of wage earners in general, but operate in diametric opposition to the interests of wage earners in general.

snip

QuoteThe only contribution of the labor unions to this process is to impede it. At every step of the way, they fight the rise in the productivity of labor whenever it threatens to reduce the number of jobs available for their members. Indeed, they openly pride themselves on "making work" rather than making goods, apparently incapable of grasping that making work by requiring more labor to produce a good than is necessary, serves to prevent the production of other goods, that would have been available in addition to the one, particular good they are concerned with.

Labor union membership in private employment has greatly declined over the decades, from about 35 percent in the mid 1950s to about 7 percent today. The reason is the fact that unionization imposes artificially high costs on firms, in the form of above-market union wage rates and reduced efficiency and quality of product as they struggle with union hostility to improvements in productivity, arbitrary work rules, and the difficulty or even impossibility of firing incompetent workers. Under such conditions, firms cannot meet the competition of other firms, foreign or domestic, that are non-union, and thus sooner or later must go out of business. The most recent large-scale example is that of Hostess Brands. It finally had to close when one of the major unions it had to deal with was unwilling to accept a wage reduction, with the result that 18,000 workers became unemployed. This kind of story, repeated hundreds of times over, explains the decline in union membership.

The second article, a brilliant takedown of the California Federation of Teachers and the now infamous "tax the rich" video, is so great that no snippet can do it justce.

http://mises.org/daily/6333/Labor-Unions-Thugs-And-Storm-Troopers


raptor5618

While on its face a union implies that they fight for the common worker who on their own cannot resist the will of big bad businessmen they really are an anchor that prevents the workers from advancing because of a thriving business.

If a union could change its approach and and operate like a business owner then they would be a welcome addition to any company.  If they spent their dues to make their workers more efficient and productive you would be willing to pay more per hour because your cost per unit of product produced would go down.

It really is a simple equation to understand without needing a graduate degree to see it.  A company that can make a product for less than its competitor will either achieve a higher profit margin or will dominate the market by making the same profit when selling at a lower price.  The advantages of either also seem apparent that once you have an advantage you have the resources to further improve your productivity. 

But like the article and OP says the union tries to increase the cost paid to workers for each unit produced.  As before the impact is self evident. 
"An armed man will kill an unarmed man with monotonous regularity."