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February 13, 2012

Time for Labor Unions to Change

Unions have been much in the public eye recently.  Two noteworthy media exchanges lead me to offer a provocative question about the future of organized labor in America.

First, a letter to the editor in a local paper regaled the important history of the American union movement in helping secure workplace norms of a modern world.  But, without a hint of irony, this writer offered her most recent example, circa 1914. No doubt President Wilson took notice.

Second, in order to calm the tension surrounding a labor dispute that embroiled Muncie and London, Ontario (Canada), several local officials diplomatically pointed out that Muncie was not the enemy of Canadian workers.  This is true enough, but how is it, I wonder, that an employment contract between willing parties could descend a condition where either side is viewed as an enemy?  Life is short, and full of real enemies, foreign and domestic.  Perhaps I am quaint, but I submit to the idea that if you honestly think of your employer as an enemy, quit the damn job.  If you think your employees are the enemy, discharge them.   Of course, the latter may be what happened in Canada, and there’s a lesson there.

Employment is a contract in which one side supplies work and the other buys it.  The higher the wage, the more work is supplied and the less demanded.  Where the wish to supply equals the wish to purchase labor, a wage is set.  This wage varies by location and occupation, but one thing is for certain.  No buyer of labor will long keep workers whose value added to the production of goods is beneath their wages (to include fringe benefits and payroll taxes).  Wishing the world to be different will not—indeed cannot—change this.  Trade unions (carpenters, electrical workers and the like) have long understood this, embracing markets and pushing for better skilled workers (the supply) and a stronger economy (more buyers of their labor).  In contrast, labor unions continue to fight against market forces to their lasting ill effect.  America’s storied labor unions, now corpulent and slothful, have seen a precipitous collapse in membership.  In one of the nation’s more manufacturing intensive states—Indiana—there are at least four times as many Republicans among the ranks of manufacturing workers than there are union members.  The passage of right-to-work law didn’t so much kill unions as simply remove them from life support.

This leads to a provocative question aimed at the many able labor union leaders.  Suppose you become trade unions, representing not the unskilled masses of the past, but skilled, able and well compensated craftsmen.  Suppose that instead of having enemies among your employers, you become the place American business comes for skilled workers.  Suppose you focus your time and efforts on boosting the prospects of good workers, not making sure bad ones keep their jobs.  All of this is your call of course, my APWU membership has expired; but I urge you to consider it soon before the 100th anniversary of your last major success passes.

Link to this commentary: https://commentaries.cberdata.org/609/time-for-labor-unions-to-change

Tags: right-to-work and labor unions, management


About the Author

Michael Hicks cberdirector@bsu.edu

Michael J. Hicks, PhD, is the director of the Center for Business and Economic Research and the George and Frances Ball distinguished professor of economics in the Miller College of Business at Ball State University. Note: The views expressed here are solely those of the author, and do not represent those of funders, associations, any entity of Ball State University, or its governing body.

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