"...if we be honest with ourselves,
we shall be honest with each other." ~ George MacDonald
"...if we be honest with ourselves,
we shall be honest with each other." ~ George MacDonald

Unions

"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."

Here’s the quote in context.

"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.

Labor unions can raise the standard of living of narrow groups of workers, by gaining monopolistic privileges that limit the number of workers who can be employed in a given line of work or by causing or maintaining an artificial need for the services of workers of given types. But in these cases they reduce the standard of living of other workers.

The workers who are barred from working in the unionized fields must find work in other fields, where their added numbers serve to depress wages. If minimum wage laws prohibit that fall in wages, then the workers displaced end up as simply unemployed or take the jobs of other workers who become unemployed.

Compelling the continued employment of more workers than are needed to produce a product despite the fact that economic advances have made their employment in that line of work no longer necessary, has the effect of maintaining a product price that is unnecessarily high and thereby of depriving wage earners throughout the economic system of the funds they would have had available as the result of a lower price to spend on other products. And, it should be realized, the production of those other products, previously not affordable because of lack of available funds, would have required the employment of an amount labor equal to the labor initially displaced.

In the light of these facts, one can understand how the productivity of labor over the last 225 years or so has risen by enormous multiples with a comparably enormous positive effect on real wages and the general standard of living and no negative effect whatever on the overall rate of unemployment. Indeed, the total number of wage earners employed has also increased enormously, in line with the increase in population made possible by the rise in the productivity of labor and consequent rise in the standard of living.

The 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."*

Labor Unions, Thugs, and Storm Troopers by George Reisman. Used with permission of the author.

 

The Unions’ War on Australia

Private Sector Vs Government

The Government Against the Economy

 

 

The Minimum Wage

Exploitation Theory