By May 19, 2014 0 Comments Read More →

Slaves to the Labor Unions

Think labor unions are there to protect you and the workers they represent? Think again.


Union workers fighting against the Police in 1934.

Unmasking the rhetoric from union bosses and the mainstream media of what unions are supposed to be reveals just how greedy and self interested these unions really are. Let us go back in time to colonial America, a time when unions were frowned upon. During this time they had a reputation for their criminal, violent, thuggish behavior and were resisted by workers, consumers, corporations, and courts of law.

Because America was mostly a vast and free farming society of frontiers and workers were scarce, paid wages were often twice that of those paid in England. In fact, from colonial times through the 1870s union membership was likely below 1%.

So what changed? And what promoted the rise of labor unions?

But first, let’s dispel the common presumption that labor unions and increased union membership equals higher wages. If that were true then it would be expected that wages between 1855 and 1900 to be at a low point, when in fact, they doubled over a worker’s lifetime. And wages between 1896 and 1916, a time when union membership was increasing, were under half of those of the previous fifty years.

One would also expect that between the years 1936 and 1945 that wages would have had their sharpest increase and that they would have leveled off in the years to follow when union membership was no longer rising. Not so. Actually, wages consistently increased from 1917-1955, proving that there is no correlation with higher union membership and wage increases. This leads one to believe that other factors are responsible for increasing wages through the years.

Historically, unions had been more popular in Great Britain and Europe than in America. Class warfare and the Marxist sentiments of the plight of the working class never widely appealed to Americans. But the political mood was changing and the latter half of the 19th century gave rise to the progressive era and the ideology of collectivism. This ideology ultimately paved the way for compulsory monopolization through a partnership of big government, labor unions, technocrats, and intellectual elites. Though, it took the Panic of 1893, the worst depression ever in the history of the United States at the time, for unions to find more effective methods of organization.

By the early 20th century union membership increased to 6%. This was in large part thanks to the American Federation of Labor (AFL), founded in 1881, and its leader, Samuel Gompers who used the Panic of 1893 as an opportunity to blame the “capitalist class” for overextending the railroads. This was the first federation of labor unions in the United States of America and was an alliance comprised mostly of crafts unions. Cartels like this only prosper when the organizational costs are minimal with high rewards. This in turn hurts low-wage workers and creates smaller wages for workers outside the unions.

Ludwig Von Mises once said “No one has ever succeeded in the effort to demonstrate that unionism could improve the conditions and raise the standard of living of all those eager to earn wages.” In fact, labor unions can be blamed for many hiccups in economic history. Take for instance the declining standard of living and unemployment the British working class faced in the 1970s. And hey, let’s not forget John L. Lewis, arguably the best oil salesman ever! This man, head of the now defunct United Mine Workers Union, called on so many strikes, and raised the price of coal due to increased production costs so much that he inadvertently encouraged people to switch to oil instead. Coal companies even traded workers for machinery to reduce the production costs his union created. And by the 1960s many coal mining towns had turned to ghost towns.

"Twinkies" by Masayoshi Sekimura

“Twinkies” by Masayoshi Sekimura

A more recent example is the bankruptcy of American confectionery brand Hostess in 2012 (The makers of Twinkies). This is an all-too-typical example of the production costs unions create. This was not a simple case of a corporation not willing to pay union rates. The work rules imposed in union contracts required Hostess, the manufacturer of Twinkies, which also makes Wonder Bread, to deliver these two consumer goods to stores in separate trucks.

Truck drivers were not allowed to load either of these goods into their trucks. And the people who loaded Twinkies into trucks were not allowed to load Wonder Bread, and vice versa. Clearly, the intention was to create more jobs for the unions’ members. But the unnecessary additional costs that these make-work rules created ended up forcing the company into bankruptcy, sequentially costing 18,500 jobs.


Source: Wikipedia


On a personal note, those of us living in London share the same frustration with the all-too-frequent tube strikes here which prevent those of us who rely on public transport (transit) to get from A to B. These strikes have a detrimental effect on productivity and add even more stress to our already hectic lives. As a temporary expat from the Los Angeles area, I have never missed my car and the car culture that exists in California more than I do during these strikes.


“Sunset Boulevard, Los Angeles” by IK’s World Trip

The hard fact is that union bosses’ salaries depend solely on maintaining the illusion to employees that the employer is the enemy, even if it costs employees their jobs. Unions are just as (if not more) greedy and self-interested as the corporations they are supposed to be protecting workers from. And no one needs them, but we are all slaves to them.

Yes, the idea of a union protecting workers’ rights, increasing wages, and benefits may be seductive, but wages had been increasing for decades even before the increase in unionization. Unions take money from and hurt the people they claim to protect – the workers.

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