The American Interest
The Middle East & Beyond
Published on December 13, 2012
What’s the Matter with Michigan?

It seems that no matter what I do, I can’t beat my colleague here at TAI, Walter Russell Mead, into print on any significant news story. Walter does it fast and, almost invariably, does it very well. He did it again yesterday, early in the day too, on the news that the Michigan state legislature had passed two so-called right-to-work laws.

Like Walter, my sense is that this is a big deal—a turning point in our national odyssey.  Like Walter, too, I see the basic facts in the same way. But unlike Walter, my sensibilities about this are bit different, possibly owing to the fact that he is the son of an Episcopalian clergyman, and I am the son of a rare Jewish member of the Teamsters union. Walter does say that, “Labor needs representation and many of the values that drew millions of working Americans into the labor movement endure.” I would go a bit further than that: Collective bargaining is all that keeps large numbers of Americans at least clingingly in the middle class at a time when globalization and automation are undermining a hard-achieved, broadly egalitarian U.S. social structure. What Republicans in Michigan have done is to attack the viability of collective bargaining. If companies can hire as many non-union laborers as they like, it is obvious that union bargaining power will essentially collapse.

Were that to happen, and were it to spread from Michigan to the rest of the nation, it might help some American businesses to keep their costs down and so better compete worldwide. That, arguably, might produce more jobs—if not necessarily more decently paying jobs. But at the same time, whether that happens or not, it will certainly produce more inequality and the social frictions that ultimately go with it, exacerbating a trend at least a quarter-century now in the making.

When I read the news from Lansing, I immediately began to think of another key turning point in the history of the American labor movement. Since few Americans today know much about that history, let me tell you a little something about it. No doubt you will see many parallels with current circumstances even before I have the opportunity to point them out.

Back around the turn of the last century, you’ll probably be surprised to learn, Paterson, New Jersey, was one of the fastest-growing and economically thriving towns in the United States. It was so because of the Totowa Falls, which supplied almost limitless power to a large number of mills specializing in making silk. By the 1890s, something like 30 percent of all the silk made in America came from Paterson. The mills attracted large numbers of immigrants––Irish, Italian, Jews, Poles and many others. Working conditions were not so good. Days were long, pay was modest, and health issues abounded, whether from the effects of the dyes or of lint dust getting into workers’ lungs.

Some of the immigrant workers were socialists, carrying within their bosoms still the hopes of the failed revolutions of 1848. Way back in 1828 the first industrial strike in American history occurred in Paterson, but in the late 19th century and again in 1902 there were more strikes as labor unrest grew. These strikes never got anywhere, however, because they were not general enough. They targeted particular mills, but since there were so many other mills, the targeted owners could not give in to striker demands or they would go broke for being at a competitive disadvantage.

But then, in February 1913, the mother of all strikes hit Paterson’s 350 silk mills. One of the reasons was a technological change, something rather reminiscent of automation. At the turn of the century, the basic ratio of loom to worker was one to one. But as the machines became more sophisticated, the owners turned to a ratio of one worker to two machines. By early 1913 rumors had begun to spread among the workers that the two to one ratio might soon become a four to one ratio. As the workers, some 25,000 strong, saw it, they were working harder than ever for the same pay while the owners made twice, and prospectively four times, the profits. They wanted an eight-hour day, not the 12–14 hour days they were working. They wanted a ban on child labor, defined as anyone younger than 14. And they wanted more money.

The owners said no. And with that there descended upon Paterson, New Jersey, in all of their force and color, the Industrial Workers of the World—the Wobblies. Big Bill Haywood himself came to town. Elizabeth Gurley Flynn came, too, both at the invitation of the small and tottering IWW Local #152. Later on John Reed even showed up, though he of the pure “red” did not necessarily see eye to eye with the blacker syndicalist/anarchist Wobbly creed. The strike was effective in that it was general, aimed at all the hundreds of silk factories in town. Picket lines were set up, relief societies for striking workers were establishes, and lots and lots and lots of speeches were made. Most important, the mills were forced to shut down.

The owners declared a lockout. They also detested the radical rhetoric that set them up as capitalists opposed to the workers, because the truth was that a great number of the owners had started out as the lowest of the low laborers in the same mills. They did not think of themselves as capitalists; they thought of themselves as hard-working successes.  They tried to hire scabs to do the labor, but they were only moderately successful at that. They were eventually far more successful, however, at sending work to mills in southeastern Pennsylvania, to places like Easton and Allentown, where refugees from the anthracite coal mines were willing to work for even less than the silk workers of Paterson. In other words, the owners outsourced. A waiting game of chicken ensued, until finally the strike collapsed. Workers went back to their jobs without winning a single concession from the owners. The Wobblies were finished.

Again in 1924, about 20,000 silk workers tried to stop the four-loom system, which by then had become technically feasible. They failed again, but their disruption persuaded a number of Paterson’s silk manufacturers to leave town. By 1935, there were only about 4,000 workers in the silk industry left, and with the advent of synthetic fabrics the industry subsequently diminished to the point of near nothingness. Patterson did make a comeback as a fabric dyeing industry town, but those operations, too, eventually moved elsewhere to both domestic and foreign production platforms offering lower-wage costs.

What’s the moral of this story? There’s not just one.

First, changes in technology drive changes in the relationship between capital and labor. They always have, and they always will. If it hadn’t been for advancing technology that made the looms more efficient, the labor disruptions in Paterson might not even have occurred. Technology also accounted later on for the problems owners faced when silk was largely displaced by synthetics. Some owners managed to make the transition, and they were far better placed to adjust than workers. But technology challenged everyone in due course, capitalists and workers alike. It is still doing so, whether we notice or not.

Second, union power depends on a variety of circumstances. One of those circumstances is the relative immobility and absence of porosity in labor markets. If the owners couldn’t send work to eastern Pennsylvania, the strike might have ended differently. At the same time, competition is real; workers get no ultimate benefit from driving their employers into bankruptcy. Owners recognize and deal fairly with unions only under two conditions: when the circumstances of competition make that economically viable, and when they acknowledge the dignity and humanity of their labor force. This latter is a very important point, often neglected in narrowly economic analyses—which I will return to in just a moment.

American industrial and trade unions today (and I deliberately exclude from this discussion public service unions because, as I have written before, they are of a qualitatively different nature) face both rapid technological change and the availability of lower-wage platforms that ownership can seek out and employ. It is no wonder, therefore, that the clout of labor unions has so dramatically diminished over the past three decades. It is true, as Walter said, that the leadership of American unions has not been particularly sagacious or effective in recent years, but I’m not sure it would have mattered very much. The ground simply disappeared from beneath their feet, and it is still doing so today.

What can be done about this? Logically, there are only two ways to restore the power of labor and protect the leverage afforded by collective bargaining. One way is to close down the economy with a wall of protectionism. The country would be poorer as a whole, just as the theory of comparative advantage holds, but we would be more equal among ourselves.

That is a tradeoff some would make and some would reject. Personally, am I willing to pay more for a good or a service if I know that doing so helps a fellow American to get and keep a decent job and helps stabilize entire deteriorating communities? Damn right I am. To me, that is part and parcel of what being a patriot means, and so I “buy American” when I can. Aren’t I concerned at all about the foreigners whose low-paying but still critical jobs would be eliminated as a result if lots of people did what I do? Yes, but I care more about the well-being of other Americans than I do about foreigners. I know that view is not fashionable among the anti-nationalist Left, but I am not a member of the anti-nationalist Left.

The other way is to transform a race to the bottom into a race to the top by exporting, so to speak, trade unionism to other countries. If labor in other countries were more powerful, and wages therefore higher, the competitive disadvantage of American labor would diminish. This is what the international division of the AFL-CIO used to do back in the Cold War, when Lane Kirkland was around. We have not seen his like for many years. I believe that industrial and trade unionism is the best pedagogue for a budding democracy. I would take an effort to create a genuine union abroad over a marquee election any day. Unfortunately, our government doesn’t see things this way anymore, and that includes Democratic administrations as well as Republican ones. Over at the State Department there is a Bureau called DRL for short. The acronym stands for democracy, human rights and labor. Again unfortunately, no one seems to remember anything about the “L.”

Let me not leave you in any doubt: Neither one of these alternatives is remotely practical these days. We are not going to close down our economy behind a protectionist wall, and we are not going to be successful in seeding vast numbers of new labor unions in China, Bangladesh, Vietnam, the Dominican Republic, Niger, Bosnia, and so on.

The only hope, therefore, is that American corporations will gain comparative advantage through the scientific and technological innovations we have always been so good at, and that they in turn will have the competitive elbow room to recognize their labor forces with the proper sense of dignity workers deserve. Collective bargaining expresses basic fairness; companies by their very nature as partnerships concert their negotiating assets, so labor should be able to do the same. (Some fool once tried to persuade me that unions never had any moral purpose or standing, but were just ethnic gangs organized to keep outsiders from certain job categories…how pathetic.) Collective bargaining is also good for corporations, and intelligent corporate leadership looking out for the long-term success of their enterprises knows that. Corporations should want workers with high morale and loyalty, because that boosts productivity more than any other factor. So-called right-to-work laws that undermine unions will produce precisely the opposite.

Let me close with reference to the Bible. (“Say what?” I hear you ask. Please, bear with me a moment.)

The Hebrew Bible evinces a particular attitude toward this general question. Most people reading the text of the Torah in English may be excused for thinking that slavery is okay according to the law. But this misreads the text. Remember that the text of the early parts of the Hebrew Bible at least, the Torah, is predicated on a tribal division of the land in an agricultural and animal husbandry context (later books and later laws, including a few retrojected into earlier texts, reflect a far more specialized economic environment). In those days, tribes leading down to clans leading down to extended families owned agricultural and pasture land. People worked together in family groups, with elders usually calling the shots. The notion that a person would work in a subordinate role for wages for someone to whom he was not related was strange, something akin to an unnatural act.

Nevertheless, such things happened, and provision for them is made (I won’t go through the specific verses; you can find them for yourself if you’re interested). But these relationships did not describe a condition of slavery. They describe a condition of what we would call at most indentured servitude—and temporarily so at that, given the laws related to jubilee years. There are different laws pertaining to war captives, whose situation more closely resembles that of a slave. But the idea that one Israelite would literally enslave another is quite foreign to the sense of the text.

It is easy for modern readers to miss this distinction, promoted by clumsy translations, since so many of us work for other people to whom we are not related. What in biblical times was thought very unnatural we take to be utterly natural. If we work for others as trade or industrial workers, we are involved in what Marx once called wage slavery. Obviously, in civilized countries what goes on nowadays does not deserve such a brutal descriptor. Nevertheless, we would be wise to ponder the fact that the structure of modern industrial economies is based on inherently unequal relationships between those who have capital and those who work for those who have capital. The reason this matters ultimately is that it contradicts the egalitarian democratic mythos we live by. We say, and to our credit we mostly believe, that all men are created equal; but for all practical purposes the very structure of our economy says otherwise.

Barring some very improbable mass return to a more egalitarian and self-sufficient pastoral life, or a leap forward to a comparable situation where people in much greater numbers work for themselves, there is nothing to be done about this. It just is what it is. (Attempts to eradicate the problem by having the state play the role of capitalists, whether in “soft” Left socialist or “hard” Left communist terms, haven’t worked out so well, and indeed they didn’t even solve the basic problem.) A work contract within any for-profit enterprise, even in America today, is still essentially a form of indentured servitude, though for the vast majority of us it is so very mild a form that the term doesn’t feel right: We can quit and seek work elsewhere on pretty short notice or no notice, we can get severance pay, we have certain rights of redress, we can get government unemployment benefits if one party or the other breaks the contract, and so on and so forth. All the same, no one who does not work for himself or within an integral family unit is truly free and “at liberty” the same way that someone who does work for himself is.

This is so simple and obvious a point that it is rarely made explicit or recognized at all these days. But it is important precisely because in the absence of the radical liberty afforded by self-employment the only thing that makes this condition morally tolerable is the extension by an employer to an employee of the unambiguous acknowledgment of workers’ inalienable dignity. Yes, the very act of employing someone instrumentalizes that person; the employer cares more about what a person can do than who a person is. That is natural, and the larger the enterprise and workforce, the more natural it is. But that is not a sufficient basis for a stable and mutually beneficial relationship. What that means, among other things, is that understanding capital-labor relationships, and understanding the role of unions as well, requires more than economics.

And that, finally, is what is really disturbing about what the Republicans in the Michigan state legislature have done. Whatever their thinking or their actual motives—and I’m not thereby giving them the benefit of the doubt—they are instrumentalizing people. They are in effect enabling the withdrawal or the diminishment of the acknowledgment of workers’ dignity. They are encouraging the breaking of a bond far more important and precious to a society than a mere labor contract. They have done something that is both wrong and ultimately foolish.

  • James

    This violates so many basic principles of economics. What has really happened ? The end of the closed shop. Unionism will rise and fall based on what it provides members. Reserving jobs for unionists imposes excessive costs on the rest of the Michigan economy (ultimately paid for by the poor). And the tired old Marxist labour theory of value is dragged out. The silk mill owners invested in capital- more machines- they didn’t just sweat 4 times the production out of the workers. Presumeably innovation and R&D were involved too. Innovation and R&D will save US manufacturing, not the closed shop. Wake up Adam !

  • DenisC

    What a ridiculous load of Euro-socialist baloney. Quote: ” We say, and to our credit we mostly believe, that all men are created equal; …”
    Who’s “We”? Anyone who has read much about American history knows this country was based on no such principle. What our founding documents say is “All men are created equal before the law.” There is a vast difference between those two precepts. The low-information voters who unquestioningly accept the former have arisen only since Marx started publishing his works. The fact that they have become numerous in recent decades goes a long way toward explaining certain social trends and federal budgets, among other markers.

  • http://www.martinbermangorvine.com Martin Berman-Gorvine

    The previous two commenters make the depressing mistake of so much of what passes fopr “conservative” thought in America these days, equating any deviation from the most extreme form of laissez-faire (for the owners only, that is) capitalism with “socialism.” That the intelligent management of capitalism to produce widely shared wealth requires a form of thought alien to Ayn Rand and her acolytes, is utterly beyond these folks.

    • Pettifogger

      Managing capitalism is a seductive idea, because it sounds so appealing. But the more the economy is managed, the more poorly it performs.

      We need anti-fraud laws and basic worker protections. Then we need to let the economy perform. I work for local government and see first hand how it squanders money on politicians’ pet projects. The managers are the ones who need managing, but we’ve never figured out how to do that.

    • SunsetHoodlum

      “intelligent management of capitalism to produce widely shared wealth”.

      Intelligent Management always seems to benefit those who donate to politicians. Central planners inevitably “solve” that which irritates the sensabilities of Ivy Leaguers. Planners and experts inevitably do more harm than good.

    • SunsetHoodlum

      “Intelligent Managment of Capitalism” equals goverment planned economy which is one of the main elements of Socialis. Look it up. It is no small deviation from Laise Fair.

  • Anthony

    “Understanding capital-labor relationships, and understanding the role of unions as well, requires more than economics.” Yes, it requires “a deep knowledge of human nature and human neccessities, and of the things which facilitate or obstruct the various ends which are to be pursued by the mechanism of civil institutions” (in this instance, labor and capital in profit oriented economy undergirding free society – reconciling tension with prudence towards sustaining liberty).

  • Tom

    The third comment is a demonstration of the overreaction of the left to the right. One does not “manage” capitalism. One regulates it to prevent profit-seeking from becoming an excuse to squash people. The rest takes it course.

  • NaSa

    That the intelligent management of capitalism to produce widely shared wealth requires a form of thought alien to Ayn Rand and her acolytes, is utterly beyond these folks.
    Ad hominem attacks do not substitute for argument.If you have any counter points or meaningful ideas that are contrary to what the first two said, PLEASE DO share your thoughts. Otherwise you have to admit that you are at a loss of new thoughts,ideas and can only bitch and moan about what “passes for conservative thought in America”.

    What is truly depressing is how millions of Americans cling…and i cannot use any other word, but cling to the idea that they can and somehow will live in 1950′s from now till eternity.Technology has changed our lives and will continue to do so. Trade Unions are Luddites of the 21st century and can do nothing more than indulge in criminal thuggery against those who fearlessly point this out.

    What passes for progressive thought in America is an utterly unrealistic embrace of status-quo of the 50′s,where the unions ruled the roost. To me, this is not depressing but enlightening – progressives are those people WHO MOST love the status-quo and are always on the look out for the next FDR. Progressives in reality are Statists as Mark Levin points out.

    Full disclosure – I am from India, consider myself conservative, and i have been observing American politics for close to 12 years now (since the Florida recount).I come to this blog as it remains in my opinion the one of the two liberal blogs that is honest about the all too apparent limitations of the blue state model (cough, cough modern progressivism) even though it is well known that WRM is a Democrat.

    I cannot wait till the Ponzi schemes such as Social Security into which i was FORCED to contribute even though i was not a US citizen but on a work visa, crash and burn.

    Dont even get me started on Medicare… boy, America is in a whole heap of trouble… but dont worry, it has such brilliant thinkers and leaders like Oba…sorry, cannot quite finish the joke.

  • NaSa

    What a ridiculous load of Euro-socialist baloney. Quote: ” We say, and to our credit we mostly believe, that all men are created equal; …”
    Who’s “We”? Anyone who has read much about American history knows this country was based on no such principle. What our founding documents say is “All men are created equal before the law.” There is a vast difference between those two precepts.

    Who is “we” ? Whomsoever the liberals want it to be… in this case, the trade unions !!

    The “all men are equal” nonsense is rampant through out the world – from the world’s oldest democracy (America) to its largest (India).it’s ok , every one knows that it is utter nonsense but pretend to believe otherwise as it is much more convenient and also sadly happens to be a very powerful political tool… Marx once opined that religion was the opium of the masses – he could not be more wrong.ENFORCED equality is the true opium which has animated the political class and the masses more than anything else… Religion has had its share of blood, but nothing comes close to the travesty that “WE ARE ALL EQUAL” garbage wreaked upon human kind… from Lenin to Stalin to Mao to Pol pot to the tyrants who run Cuba,Noko etc it has been a story of unparalleled blood letting, murder and human misery

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  • David

    When I was a young man I was a member of the teamsters. I watched them “loan” the central state pension fund to the mafia to build Vegas. For this, the beneficiaries received 3% versus the 10% anyone could have gotten for a CD at that time. I attended Teamster meetings in which obvious thugs were put on the union payroll for no other reason because they could. So, don’t tell me about the glorious history of unions. My experience was that they were rackets, pure and simple. I did not want to give my money to the mafia but it was “closed” shop so I had no choice.

  • harkin

    “They are in effect enabling the withdrawal or the diminishment of the acknowledgment of workers’ dignity.”

    I worked for three unions (incl CWA, AFL-CIO) where I learned being a good worker was not as important as being a good member (doing whatever the shop steward demanded) before I escaped and decided that I wanted to be my own boss, even when still an employee. I never had as much dignity as a union member as I did marketing my skills and living independent from union favors and government handouts. Freedom to say ‘no’ to the state automatically deducting union dues (political payoffs) from a paycheck is very American.

  • robinintn

    I just don’t want to work in a place where the most worthless, lazy slacker is compensated exactly like the best, most productive employee. Fortunately, l live in prosperous, solvent, right-to-work Tennessee, so I’m not forced to.

  • Susan

    The law in Michigan does not ban Unions, it simply prevents Unions from having the power to unlawfully rule over the rights of American workers.

    Americans have the Right-to-Work with Dignity and not to be used as pawns for Union Crime Bosses who rule over the Union’s Protectionist Rackets.

    On the Waterfront the Union Crime Bosses killed those who could have been somebody.

  • http://www.Inklingbooks.com/ Michael W. Perry

    Unions had a reason to exist in the past when factory work was mindless and repetitive. Today, when it is highly skilled and automated, they’re an anachronism.

    For an example, look at auto factory workers in the Southern states today, who are doing quite well without unions. The skills required today means no sane employer will treat them badly. And they’re spared the misery of a job where union officials, for reasons of their own, try to make them hate an employer who treats them generously.

    No, today unions are little more than a branch of the Democratic party, supporting crony capitalism and lobbying for federal handouts to keep their unprofitable companies afloat. The faster they fade into insignificance, the better. I commend Michigan for recognizing that.

  • BarryD

    You forgot about a big part of the story.

    When you buy a charming old house, you quickly find that there’s little room to store your clothes. 100 years ago, there was no demand for a lot of closet space in a new home, like there is today.

    That 1:1 loom:worker ratio meant that the “middle class” could barely afford clothes.

    The same principle was true throughout the economy. Forcing employers to employ excess workers at artificially-high wages might help those workers, if this happened in isolation. But it doesn’t happen in isolation — it’s either the way the system works, or it’s not, so everyone lives under the same rules. The prices of goods are artificially high, for everyone, so artificially high wages are quickly absorbed by artificially high costs of living.

    By objective measures, the “disappearing” middle class today lives better than the “thriving” middle class of the heyday of unions for semi-skilled laborers.

    Symbolic of this, the Army used to be concerned that most recruits were malnourished and unable to be trained as soldiers. Now, the Army is concerned that most recruits are too fat to be trained as soldiers.

    Forced union membership does not lead to real prosperity.

  • Taeyoung

    The problem with the notion of exporting trade unions to other countries, is that our unionised auto industry is uncompetitive even against *other* unionised auto industries. Toyota and its suppliers in Japan all have unionised work forces, and the union is fairly powerful. Hyundai has a union workforce in Korea — I think there was a strike just this year. I don’t know for certain with the Germans, but I suspect they have strong unions back in Germany as well. But people still buy Japanese and Korean union-made cars because they’re better (I don’t think any of them have moved high-end luxury car manufacture into the US) and they’re still price competitive. Exporting trade unions to other countries isn’t going to help *our* unions pull out of their death spiral. It will just slow it down a little bit. Because our unions are uniquely bad.

  • red

    The writer says companies won’t treat their workers fairly without unions, but this ignores the many factories in right to work states where the employees resist unionization. They recognize that real fairness is when the worker with skill knowledge and initiative, whose efforts align with the success of the company, is rewarded at a high level.

  • TomJ

    And regimented union work rules, seniority systems, constant labor-management antagonism, and use of forced dues to promote one political party do not detract from the dignity of humans?

    The personal goal of every man and woman should be to develop a self-reliance and a mobility so he doesn’t have to wallow in the scrum of the desperate and dependent people, and so he can escape to brighter regions when his locality grinds down.

  • JabbaTheTutt

    You wrote: “Were that to happen, and were it to spread from Michigan to the rest of the nation, it might help some American businesses to keep their costs down and so better compete worldwide. That, arguably, might produce more jobs—if not necessarily more decently paying jobs.”

    Allow me to translate: You believe it to be better for a few organized union members, hijacking the power of government to keep their artificially high wages at the cost of fellow Americans not having any jobs.

    Where am I wrong here?

  • Rogody

    One could work for FedEx sorting boxes or, after a few years, driving a truck; one could go the same for UPS. The UPS worker draws a higher wage but pays union dues. The take-home in both cases? About the same, except unions don’t suck workers’ income exist in the former.

    I am not anti-union; I simply see no value to the average worker. I have applied for closed shop factory positions, but I never got one, probably in part because I didn’t have an “in” with the union. However, a union-free foreign car plant, where not knowing anyone wasn’t a problem, did hire me. I later learned the car plant–if one became a proper employee, not a full-time temp–yielded better benefits and _never_ laid anyone off.

  • John

    So basically, all paid work is a form of slavery, or indentured servitude as the author put it, barring the clear difference that indentured servitude implies a debt to the employer that does exist (reminds me of the old “all sex is rape”).

    And somehow forcing me to pay money to someone so that I can keep a job is a good thing because they will speak for me in ways that I do not wish to be spoken for, and do things with my money that I do not wish done? (in most countries this is refereed to a kickback, and is normally paid to the direct supervisor, good thing we have unions to prevent that kind of workplace abuse).

    And, if we are going to talk about indentured servitude, my labor is converted into wages, of which the union is forcibly extracting. How, given this, am I any less a slave to the union than I am to the company?

    The bottom line is that if unions truly provide a service to the employee, the employee will through free will choose to belong to, and support the union. That’s how unions came about in the first place.

  • Ray Szymanski

    I think the real reason for the labor union decline is that management has adjusted and become more enlightened to new realities in production as regards to their employees but the unions have retained the basic attitudes reflected in this article. By that I mean this country has come a long way in management/labor relations since 1920….but the unions have refused to acknowledge it. Hence their decline, as unions are nothing more than the lowest common denonminator for employees and have been for a long time. The UAW didn’t give a rats rear end for their members over the last 40 years, prefering instead for the union bosses to loot the resources and the senior union members to protect their own rear ends at the expense of both the rest of the union and the companies that employed them.

    Toyota, Honda and such pay darn good wages and benefits to their non union employees, as auto assembly jobs require both skills and a work ethic, and it is not acceptable to a firm like Toyota, that wants to build the best quality cars they can to have employee work rules dictated to them by a union…..for at the same time, Toyota understands that if a company wants a dedicated workforce that produces a quality product, it is managements responsibility to create a work environment that makes it possible. A union such as the corrupt UAW (or the Teamsters, who are equally odious) simply get in the way.

    I don’t work in the auto industry, but I did spend 20 plus years in Silicon Valley and had various jobs outsourced to Asia a number of times, requiring me to earn new skills if I wanted to stay employed. An item I always find laughable is how people say they would pay more for an item ‘Made in America’….yet the overwhelming reality is that no one will pay 5x-10x the cost for a computer, phone etc. where all the semiconductors, software and everything else is created, manufactured and assembled in America.

    As someone who worked in and ran production areas, I would not tolerate an employee telling me what they would or would not do. Their job, as was mine, was to do what what was required by the company to help the company be successful. If I, or another employee did not like that, any of us were welcome to find other means of employment. Quite obviously, it was the company’s responsibility to me, and me to my employees to provide all the individuals involved the training and the tools to our jobs correctly.

    In addition, it would have been completely unacceptable to me to not have the opprotunity to advance, be recognized and compensated for my efforts to help make the company I worked for successful. This would have put me at odds with any union, as I would not require nor want in any way, shape or form another group to ‘negotiate’ for me as I am quite able to do that for myself….thank you very much.

  • Uncle Kenny

    Does Mr. Garfinkle imagine that Michigan is the first right-to-work state? One might think so from the article. In fact, Michigan is joining 23 other states with similar laws. It is no coincidence that Michigan’s economy is in dire straits, although unions are just one of the reasons. So many of my fellow Texans, including me, are ex-Michiganians, we should form a club.

  • Jay Five

    This is all fine and good, but it ignores the painful reality, that both the Democrats and the Republicans have, for different reasons, colluded in allowing massive illegal immigration to drastically drive down the cost of labor.

    The most illustrative example of how this has killed the unions is in meatpacking. As late as the 1980s meatpacking was a respectable middle class job. Strong unions at places like Hormel meant relatively safe working conditions and a decent living wage.

    Enter three decades of runaway immigration, and now the meatpacking is the most poorly paid and most brutal jobs in America.

    The Democrats wanted more voters, and the business owners wanted cheap workers, and they both got their wishes fulfilled, with the result that private employer unions were largely destroyed in most industries.

  • Scott

    I’m willing to accept several differences of opinion regarding the motivations of Michigan’s Republican legistlature, as well as the consequences of their actions.

    I must take exception with this idea of ‘instrumentalization,’ however. Although one may ham-handedly apply the notion of ‘indentured servitude’ to modern employee/worker relations; if we are to be provided agency as individuals we must accept the employee/worker arrangement as trade to mutual benefit.

    The ultimate solution where all men are self employed and contracting freely with one-another is self-evident. I’m surprised it’s not obvious how this will ultimately resolve these dilemmas in time.

  • http://www.postmodernredneck.blogspot.com Phil Hawkins

    A major part of the problem too is the shift in the unions themselves. They have mostly succumbed to what I call “institutional drift”–over time, organizations drift toward being run to suit the needs and convenience of the staff rather than the clientele. This applies to all human organizations. A couple of years ago, when Indiana was heading toward “right-to-work” status, a woman called a local talk show: Her comment was that she had been a union member in both closed-shop and right-to-work states, and the difference she saw was this: in the right-to-work state the unions had to take better care of their own members and keep them happy; in the closed-shop states the union bosses didn’t have to work so hard.

  • B Dubya

    American private sector unions have devolved into gate keepers at the job, criminal enterprises that misuse their members’ contributions and pension funds, and bedfellows of any politician who will get them more of the same.

    Much of what may have provided a moral basis for the union movement of the first half of the 20th century has become enshrined in federal law. All that is left for unskilled labor unions today is the continuation of the taking from managemant that invariably leads to outcomes experienced by companies like International Harvester, Hostess, GM, Chrysler, and a myriad of other dead or dying companies.

    Companies will pay for quality people to make their products. They will pay more for them than for poor producers, slackers and fleas, because the productive worker can contribute to profitability. Unions attempt to convince their members and management that every worker is the same as another IN THE UNION. That is patent crap, and it is the ultimate poison pill in every union contract.

    You want to work for a decent wage and keep a future? Then you had better figure out a way to get the Jimmy Hoffas out of it.

  • http://www.wikistrat.com TMLutas

    The problem with this article is that it is factually challenged. The truth is that worldwide, we are absorbing labor into the international system at a rapid rate. The two largest chunks of unassimilated labor on the planet used to be India and China but the original rush of labor into the system has ended in China and is ending in India. We are at the end of an era and this article completely misses it. Go look at the Boston Consulting Group analysis that by 2015 there will be major industries who will, for completely financial reasons, relocate back to the US. Go look at the stores and even today you’re starting to see made in the USA goods that weren’t there 5 years ago. This trend is picking up, but entirely missed by the article.

    If you wish to improve the lot of workers, improve the ability of people to hire them. Legalize work to absorb labor and make it easy to start a business and operate in changing conditions without having to constantly play mother may I with various governments. Educate to produce more entrepreneurs.

    The article provides a false range of choices, excluding viable, real actions that we can undertake to improve worker conditions. Be that as it may it is not entirely without useful insight.

  • David

    If the unions had not overreached and failed in the last election (trying to embed unionization into the state constitution, trying to defeat “anti-union” legislators and judges, …) it is entirely possible that the status quo would remain.

    The unions made a desperate play to preserve their rent-seeking advantages. Their failure exposed their weaknesses and allowed the current situation to occur. I have little sympathy for the idiotic union leadership that now complains when their own tactics are turned against them.

  • Greg Toombs

    Michigan’s employers had recently been doing so well prior to the Right-To-Work votes, yes? Time to try something that’s been successful elsewhere. Treating employees with dignity doesn’t require a union.

  • willis

    The author is correct is every way but one. Corporations do benefit from the presence of a strong union. General Motors is the best example. What other company can point to a steady evolution from the rags of the 1960s to the riches of today? Those who fail to see the vital protection afforded the down trodden laborers from harsh, brutal management need look no further than the case of 13 GM workers caught on camera a couple of years ago smoking pot and drinking alcohol on the job. They were fired immediately, leaving their helpless families to starve. Thanks to the strong arm of their protective union grievance committee they were recently re-instated, with the appeals judge ruling that their smiling faces looking straight into the camera was inadequate evidence. Michigan may now indeed reverse its strange, unexplainable loss of jobs and deteriorating communities of several decades, but it will do so on the backs of laborers working for the same slave wages the 93% of us non-union employees endure instead of the more dignified welfare handouts they are enjoying now.

  • Andrew

    I am in agreement with the first two replies, so this comment will address another issue raised in the essay. Mr Garfinkle says “The only hope, therefore, is that American corporations will gain comparative advantage through the scientific and technological innovations we have always been so good at..”, which is a fine sentiment that is wholly unrealizable when the federal government is controlled by statists and environmental activists. The laws, rules and regulations extant and continually being added to which further limit the ability of American entrepreneurs to experiment and innovate guarantee that avenue of improving the lot of American workers is foreclosed.

  • http://rantburg.com Steve White

    Mr. Garfinkle eloquently points out that capitalists, industrialists and factory owners can be excessive in their demands for production, for low wages, and for unsafe working conditions.

    He unfortunately (perhaps there is a word count limit on his blog?) fails to note that unions have their faults as well. Excessive demands. Featherbedding. Unrealistic work rules. Twisted grievance procedures. And, of course, the word that every union person hates — goons.

    Might there possibly be something in the middle?

    A major problem for unions today is that they are trying to fit a 19th century or early 20th century organizational and political model into the 21st century. It is as if they think the world is still Paterson, New Jersey, or Flint, Michigan.

    Safety issues are now handled by the government. Ask the average factory manager who he fears more, the union steward or the OSHA representative. There is a substantial, government-provided safety net. There is a minimum wage, maximum work hours, and detailed human resources rules.

    In other words, everything the unions fought for in 1890 and 1930 has been accomplished. There is nothing left to fight for, but human nature being what it is, the unions have moved on to fight for new things. That is exactly what employers today, and a fair bit of the population, are against.

    One need not be an ‘Ayn Rand acolyte’ to recognize that the Chicago Teachers Union is outright marxist. That Mr. Hoffa Jr. believes in tearing down our country. That the SEIU believes in ‘radical transformation’ and ‘social justice’. We all know what those code phrases represent.

    And you wonder why many good, average people in Michigan endorsed what just happened?

    The 21st century union movement has lost its way. This is as true in Europe as in America (I’ll not hazard a guess as to what the trade union movement in Sri Lanka or Vietnam looks like). That is why people are reacting against them.

    If it were about wages, safety and dignity the unions would still be a power. It isn’t, so they’re not.

  • thomass

    I think the race to the bottom (as an example) is over blown. The wages and benefits are just too high now. But that’s not all of it for me. I’m also tired of union politics. I did pay more for American products (including union made) for the reasons you mentioned. I also know they’re better than Chinese (Chinese car parts = junk). But; the unions helped force Obamacare on me. Cadillac care for them and the bosses but veterinary care for my family and I. Shame on them. They have to come down. This funding of the far left has to go. Plus the all the things together they (re: the union leadership) support are bankrupting the country (not just the employers of their members).

  • David Pittelli

    “Corporations should want workers with high morale and loyalty, because that boosts productivity more than any other factor. So-called right-to-work laws that undermine unions will produce precisely the opposite.”

    And that’s why Flint and Detroit are booming while those nonunion auto plants in Indiana, Tennessee etc. are hell-holes of wasted lives and crappy production?

  • Fred

    Nobody is against unions per se. The bias is against enforced unionism, which simply transfers money and power from one corporate office to another. A very small amount of union dues is actually spent assuring worker rights. The rest goes to politics and fat salaries.

    If the unions perform a beneficial function with dues that don’t strike workers as a rip-off, they will continue to join. If the unions can’t attract a voluntary membership, they deserve to fail, just like any other service group.

  • Tom

    “Corporations should want workers with high morale and loyalty, because that boosts productivity more than any other factor. So-called right-to-work laws that undermine unions will produce precisely the opposite.”

    It is not clear to me how unions, as we have them today, foster loyalty that is desirable to a company. We have created an adversarial system, with unions representing workers and owners representing the devil. Unions demand that member be loyal to the union, in the form of dues and strikes, but seem more interested undermining loyalty to the company. Especially with regards to work rules/conditions etc.

    How is that beneficial to a company?

  • Chuck

    This analysis is thoughtful but overwrought. America has always been about the individual and right to work laws are aimed at enhancing the individual’s freedom. If I as a worker want to join a company and I can see that the union provides value for its members, I will want to join that union. But if I instead see that the union is a bloated monstrosity in which only 10% of its funds are used on behalf of members and it is a major funding agent for political causes with which I disagree, then I certainly should not be forced to join that union, and there’s no way that such a union should come between me and the company for whom I would like to work.

  • Jeremy Abrams

    Globalization is indeed causing a crisis in middle class incomes in America, and the dilemma of open market competitiveness vs. protectionist drift is a real one.

    But I would say that the more immediate crisis facing labor is the lack of jobs to labor at.

    The greatest inequality is between people who have the dignity of sustaining themselves, vs. people who have lost that dignity, and must subsist on handouts from a government that goes a trillion further in debt each year.

    For every rich business owner there are probably ten men and women who sweated unsuccessfully for years at a business that failed, and had to start over at some near entry-level job in mid-life. You tax the winners, and the entire edifice of effort that supports our economy will falter.

    Rich people for the most part are not rich at my expense, and they spend their money in ways more oriented to sustainable job-creation than does the government.

  • wjr

    This entire discussion has a problem with linear thought. Things are going to get much, much worse for the “laboring” class.

    3-D printing of parts and, eventually, entire machines, AI driven robots and the collapse of traditional media with its’ “big iron” manufacturing base means the end of large scale industrialization.

    In the not too distant future if you want something you will pay for the software and a “maker machine” will make it for you on the spot. It’s science fiction, I know, but it is coming.

    Now, the real question is what to do with the great mass of people who will have absolutely no hope of ever getting or holding a job? The vast majority will simply not be able to be the scientists, engineers or software designers that will be useful in the general economy. And the “service” industries can only handle so many.

    Soon both Marx and Adam Smith will be historically obsolete. So, now what?

  • George B

    Unfortunately my limited exposure to unions has been negative. When I put out campaign literature for a Republican congressional candidate, Union members were the ones who did childish things like take down door hangers and knock over yard signs. In contrast, the college student leftists were friendly as we crossed paths canvassing. As an engineer, I would hear stories of other engineers in the Northeast and Michigan being forbidden to do work because of work rules. Here in Texas getting your hands dirty getting the job done is considered to be a good thing. My non-union American made Honda Accord has been a reliable car for more than a decade while the Ford it replaced had numerous annoying little part failures. My theory is that Ford had to use lower quality parts to make up for the cost of benefits delivered inefficiently by the UAW while Honda was able to put that money into better parts. Given all this, I would expect the Michigan right to work law to be a net positive for the state.

  • http://www.elementsofpower.blogspot.com SMSgt Mac

    In agreement with my past Econ textbooks and profs, I acknowledge the net benefit of union representation when there is a monopsony market for highly specialized skills. (BTW: This makes me as far more ‘pro-union’ than my late Grandfather who was a union organizer in the late 1920′s but grew to despise what unions became by the 1950′s.) The problem for the unions is that with the advancement of modernity, there are fewer and fewer combinations of said markets and skills.

    Pushing thinly-disguised attempts early in this thread to ‘poison the well’ against Objectivism and individualism aside, I read a lot of ‘divine right to stagnate’ in this particular post.

  • richardson

    The facts on Michigan ground, and most other labor ground is reliance by the leadership on laws designed to give them advantages that they cannot obtain by way of the persuasiveness of their argument or posture. Please describe where in the capitalist/employee relationship is employer assisted by laws forcing the employee to financially support and abet by other means, a leadership that in the main is in it for financial largesse to itself and purchase of political support. It’s hard to imagine WRMead welcomes a comparison with your brand of semi-tolerant for the moment leftism.

  • James

    In the case of Michigan, the SEIU was able to force all Home Health Care workers in the entire state into the SEIU. This was done through the passage of a new state law. This law was so expansive that it covers non-profressional workers who perform this service. People taking care of relatives at home are now paying union dues for this privilelage. After such an action, I am having trouble feeling any simpathy for the Unions in the state of Michigan.

  • Warren Bonesteel

    there was a time when unions did good things in America. Work place safety, living wages, forty hour weeks..

    Then, like many of the Fat Cats they despised, they got greedy…and became just as corrupt as the ‘robber barons’ they love to hate.

    iow, they damaged their own credibility.

    In other ways, they were almost too successful, with most businesses adopting many of their proposals so well, that workers in many places had no need to unionize.

  • 698uy08y9u8

    Anyone who works for himself and signs a contract to provide goods or services to another entity as part of his business has the same reduction in “freedom” that a worker does when he accepts employment. The worker has more freedom. He can quit. A business may not have that freedom under their contract.

    There was a time when workers were oppressed by corporations. That is a long ago phenomenon and will never come back as long as osha and other government programs and labor protection laws are in existence. The current state of affairs is that unions are labor cartels that restrict economic activity for the benefit of mostly labor leaders, somewhat for workers, but against the interestes of the poor and unemployed and consumers.

    The new two tiered wage structure is just one example of how unions are primarily concerned with protecting their own power and not with the interests of workers. They have abandoned the younger generation to “exploitation” for the purpose of maintaining the feathered beds of unproductive older workers. What ever happened to equal pay for equal work?

    I would also be more sympathetic to unions if they didn’t resort to violence to intimidate their opponents and if they didn’t have a history of involvement with organized crime.

    There are also many good arguments against allowing public sector unions to exist.

  • http://abriefhistory.org Mike_K

    You should read :Crash Course,” a book about the auto industry and the UAW. Japanese auto companies expected to see their new plants in the south unionized. They were surprised that the workers wanted no part of the UAW. The one attempt at a union plant, for the Saturn, failed because Yockich, along with GM executives didn’t want want anyone telling them how yo build cars.

  • James Robertson

    The bigger problem is that unions mostly arose to protect the interests of low skilled laborers, who were needed in vast numbers, to run factory jobs. Those jobs are gone, and they aren’t coming back. The skilled worker, who can bid for his or her own wages on an even footing has no need of a union; in fact, a union mostly gets in the way, providing nonsensical work rules and making it hard to get a higher wage. Basically, it provides a floor and a ceiling. Useful for low skill jobs, but not useful at all in a high skill required sector. Even in China, the need for armies of low skill workers is vanishing – that’s why Apple is bringing some manufacturing back to the US. It’s simpler (and cheaper) to have the handful of high skill jobs needed closer to the design teams. What the author is pining for is a world that no longer exists, and won’t be coming back.

  • elkh1

    The problem with union is they protect their members no matter what they have done. They let their bad apples spoil other hard working members: e.g NYC’s rubber room for teachers who can’t teach, they even protect pedophiles. These horror stories turn Americans against the unions. Another problem is the union rules: e.g. my sister works at Chrysler, she said they have to wait for an electrician to change a light bulb, it’s not their job to pick things up that were dropped on the floor, they laze around the whole day so they can stay for OT, they don’t listen to the salaried supervisors. Things like that raise the cost, and taxpayers are paying the price to bail them out. Union bosses are high paid crooks, like the politicians who protect them to skim the taxpayers, and consumers.

    Too bad the unions refuse to reform before it was too late because they have the thuggish muscles to push everyone around.

  • David Bennett

    “Collective bargaining is also good for corporations, and intelligent corporate leadership looking out for the long-term success of their enterprises knows that. Corporations should want workers with high morale and loyalty, because that boosts productivity more than any other factor.”
    I don’t think that it can be shown that collective bargaining produces workers with high morale and loyalty. Perhaps loyalty to the union but generally not high morale. This is the basic fallicy of modern unionism.

  • Rick

    If a job can be performed by a part-time student for minimum wage, let it.

    Where in this formula is the freedom of the laborer to improve themselves in order to be more valuable, thereby commanding better wages?

  • Pam

    There should be a venue to explore and discuss the concerns of workers and wage earners. This article isn’t it. For one thing, commenter James is correct: Michigan hasn’t outlawed unions. While no longer forcing workers to be unionized may have repercussions not fully realized, it’s up to unions to sell their product, not act like thugs and goons. We shall see if that will be possible.

    Also, the author makes no mention of union abuses and corruption. All human endeavors and institutions will fall into these conditions to some degree, sooner or later, and unions need reform. Collective bargaining produced abuses in Wisconsin (see http://www.redstate.com/mattbatzel/2012/03/29/wisconsin-better-off-because-of-collective-bargaining-reforms/). While I happen to agree that, in general, a satisfied and loyal workforce is more productive, unions certainly don’t automatically produce this result.

    Also, just for the record, I still hate American cars.

  • Jose

    Adam says, “Corporations should want workers with high morale and loyalty, because that boosts productivity more than any other factor.”

    But where is the evidence that private unions engender “high morale and loyalty” to the company? There is no evidence that unionized auto workers are any more or less loyal, or have higher or lower morale, than their non-unionized counterparts.

    The only benefit that collective bargaining has for the company is that it reduces the variability of wage & benefit negotiations. There’s one wage scale for everyone. But that means that the company cannot pay less effective employees less than more effective employees, and vice versa.

  • LR

    Dignity? Has the author actually been to Detroit? The US auto unions destroyed their industry and their city. Where is the dignity in Detroit?

    Where is the dignity in denying the right to a secret ballot? Where is the dignity in denying the right to freely associate?

    The author’s premise, which he cannot acknowledge, is that the unions can only survive through the illiberal denial of basic civil rights. Any serious thinker on the left would acknowledge that the unions have a real problem when their success is contingent on denial of civil liberties.

    The fact is that US unions have failed because they have failed to demonstrate a compelling value proposition in a globally competitive market. The fact is the US unions, while proficient at beating up reporters and other acts of thuggery, do not even begin to know how to do this.

    An engagement with a management consultancy might be a good start.

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  • Mark

    I have always said to anyone who asks that without Unions we probably wouldn’t have the wages and benefits that we currently enjoy. However, the Unions have taken a political position that is in conflict with many that are forced to support them. I recall when that process started with the IBEW, and the deaf ear that the Union leadership turned to the membership that protested. When (at least) 40% of Union membership votes Republican, but 90% of Union contributions go to the Democrats there will be conflict. For all the theories behind the benefits of Unionism, the bottom line is that the leadership will look after their own best interests even over the benefits of the members. This is just human nature. I have never been threatened by a boss or manager, but I cannot say the same thing about Union members. When an elected Democrat in Michigan can state that there will be blood, when Union members tell the Governor that they know where his daughter plays soccer, a line has been crossed. If the product has to be forced, and dissent is met with threats of violence, maybe the product is defective.

  • RustyGunner

    The image held up here is of the ideal union, noble and altruistic, and that might even have been the true state of affairs once upon a time. Unionism today is a gravy train for union leadership and its political bedfellows. The actual workers have to contend with shrinking job markets and rules that hamper innovation and competitiveness. The Republicans in Michigan didn’t stab the heart of a precious labor flower, they stepped on a racket.

  • Frank fowles

    The larger  issue not covered.  Labor is nothing more then a liberal whole part of the democrat party. Union forces support from all members regardless of deeply held views.  The is repugnant  to the ideas of freedom and American values.  Unions played only one side of politics and are now paying the price. No person should be forced to support a point of view,  only because they need a job to survive. As Cotton  Mather once said of in forced religious  believe ” it stinks in the nostrils of god” so can be said of in forced support of a political view. It is not a “right to work” issue  it is the right to think and say what we please in a free society. 

  • Koblog

    “I’m a Patriot! I buy American…WHEN I CAN.” Hah.

    It’d be very interesting to inventory Adam’s holdings and see just how much is American made.

    Secondly, in the woeful tale of New Jersey silk, please show me via the wonder of unionism exactly how much silk in New Jersey produces today? Bueller? Bueller?

    What’s the matter with Michigan? $70 BILLION dollars in bailouts for a single company that’s still failing due, primarily, to unionism, that’s what.

  • Tom

    This doesn’t end trade unionism. It just allows workers to decide whether or not they want to be members. This keeps employees from having to be indentured servants to a union. Why should people have to join any organization as a condition of employment?

  • pep

    “Whatever their thinking or their actual motives—and I’m not thereby giving them the benefit of the doubt—they are instrumentalizing people. They are in effect enabling the withdrawal or the diminishment of the acknowledgment of workers’ dignity.”

    Ah, I see. You mean like the situation whereby one is not free to work somewhere unless one agrees to give his money to people who didn’t earn it and with whom one disagrees?

  • JKB

    How exactly is the requirement to obtain membership and pay off an organization in order to practice your chosen trade, not instrumentalizing the person? The individual has no choice in their work, their effort or in their conditions. They must be selected by the union in order to work even though they have demonstrated themselves beneficial to the employer.

    All “right-to-work” does is permit the employee to have the right to practice their chosen trade by simply demonstrating themselves as being able to bring value to the employer. They are not required to as for leave to perform their work from the union bosses, they are not limited in their ability to work by who they know in the union, they are not required to pay dues to the union.

    They can decide for themselves whether they receive value for the union dues. Dues which go disproportionately to paying high salaries, benefits and administrative costs for union employees (vice members) (61%) as opposed to actual marketed purpose, i.e., collective bargaining (11%). This is far more disproportionate toward overhead than was argued was appropriate for health care insurers in the recent policy debates.

    Right to work doesn’t stop union membership, collective bargaining or any other action. It only frees an individual wanting to work from having to gain permission to work from a third party and being forced to pay that third party for exercising their right to work.

  • Fen

    Well reasoned and sourced article, but to paraphrase Sam Broder: “If it was up to Mr Garfinkle to cure the Economy… You’d have the best worker’s Rights in the world but no Wealth.”

  • Paul A’Barge

    if companies can hire as many non-union laborers as they like, it is obvious that union bargaining power will essentially collapse

    if such a large number of potential employees are non-union then that’s not injustice. It’s a free and open marketplace.

  • Jim

    What a fantastic morass of muddled thinking. Why is it that our friends on the left have so difficult a time understanding things simply? It seems that anytime there is a question that touches on base-principles, persons of a socialist mindset are very hard pressed to come up with a clear, concise thought.

    Unions in this new right-to-work state are now another economic player involved in the Free Market. That is, like a business, they must now find a way to provide and promote a useful commodity – labor for sale in a free market. They must convince laborers to join with them on the one hand; the must convince businesses that their laborers are more economically desirable than non-union labor. They need to provide valuable, useful services on both ends. The free ride of government coercion on both ends is over. In short, they are whining because “Right-to-work” means that they must now get to work. I honestly hope they figure it out soon.

  • closed shop

    Chide the audience for not “understanding” organized labor and its history, but excuse the author for not understanding the right to work movement and its history?

    Michigan isn’t on some untried experimental path; it’s joining a large number of States in creating a workplace arena that has been very successful.

  • Subotai Bahadur

    Without commenting on the moral aspects, merely the factual, Labor-Management relations are by their intrinsic nature in this country completely adversarial. It is considered a zero sum game. A closed shop does give the Union Leadership [not necessarily the members, see the pay scales of Union administrations and what percentage of dues go to pay and benefits and what go to labor negotiations and the grievance procedure] absolute advantage. But it also makes it totally counterproductive for Management to do anything that benefits Labor, because any concession or benefit merely becomes a new floor for the next extortion. We have seen historically that the end result is a loss of jobs. Further, Unions absolutely resist any technological innovation, forcing the company to fall farther and farther behind any non-constrained competition.

    And there is no learning curve for the Union members. Within 50 miles of where I write this, there was a major steel mill complex, locally owned. And it was closed shop organized. It ran for 60+ years, with the Union preventing any changes in either technology, job descriptions, or staffing from WW-II levels. And it went bankrupt. It sat for better than a decade, empty. And the town went into economic collapse.

    An out of state company came in and bought the carcass. They invested hundreds of millions in bringing the plant up to modern standards. And knowing that it was a Union town and that they would have an easier time of it, they invited the Union back in with new job descriptions, and at Union negotiated wages. One proviso was that at the end of the first contract term, there may be benefit increases, but no wage increases because they had to recover the costs put into the plant.

    New contract time comes around, and there were substantial benefit increases offered, but no pay increases. The Union insisted on 25% pay increases over the term of the next 5 year contract. The company had not made a dime of profit yet on their rehabbing investment.

    There was a strike, and a lockout. And the company did hire non-union labor at the old wages with fewer benefits. And the lockout held, because the Union did not take into account the fact that it was either the steel plant or welfare in the area.

    Not only did the union not get back in, but the out of state firm sold to a Russian company. Still no union. Wages and benefits at the whim of the Russian company. And the Russians have let it be known that they are willing to close the company down if there is a strike.

    Yeah, that worked out well.

    Just as the adversarial nature makes it more sensible to close down or move elsewhere, the insulation from reality provided by a closed shop makes Union demands unrealistic in the real world.

    They lost a closed shop. Unions were not made illegal, they just lost their absolute advantage. Just as companies have to compete on a wider scale, and be destroyed if they fail; unions now have to compete to show workers that there are actual benefits to being a union member. That is going to have to include a realistic assessment of whether it is better to lose the jobs or maybe, just maybe it would be better to not approach every negotiation as an opportunity to destroy the company.

    That does not mean taking the world of the company absolutely as to finances. But maybe they can afford to hire real accountants who are not blinded by Union hatred of the company and capitalism. It might have helped Hostess make some concessions on idiotic work rules to save the jobs of the union members there.

    Nobody is talking about returning to the days of Dickens. But ignoring economic reality sure has not worked out that well.

    Subotai Bahadur

  • John Hawkins

    Like so much other socialist thought, this defense of labor unions assumes they operate like the author thinks they should instead of how they actually do. In his world, labor leaders fight for the little guy. In the real world (which surprisingly enough contains Michigan), union leaders are in it for themselves, spending almost $6 of the little guy’s money on themselves for every $1 they spend representing the little guy.

    There may have been a day when the union leaders stood up for the workers, but it’s long gone. They only pretend to now while the feather their own nests and undermine the industries that provide all the money in the first place. Closed shop laws were one of the big things that allowed this to happen, that allowed rent-seekers to grub their way into power and use the legitimate fears and worries of rank-and-file workers as a ruse to fleece the workers (and everybody who buys stuff they made).

  • Russ

    Until the very late 19th century, mainstream American thinking also favored the entrepreneur, be it a farmor or a mechanic or what have you; all political sides were KEENLY aware of the dependence and inherent inequality that being an “employee” created.

  • Victor Erimita

    If you think people who “work for themselves” are ” more free” than those who work or others, you have never worked or yourself and you have never employed others. No one works for themself, unless perhaps they are a self sufficient farmer. You work for your customers. And nowadays, especially if you employ anyone, you work in larger part for them than you can imagine if you’ve never employed anyone. And the government increasingly dictates, to greater and greater levels of detail, exactly how you shall employ them, exactly how you shall go about “working for yourself,” and whether you get to keep any of the fruits of your labor r investment ( which the culture increasingly insists you either didn’t earn or even somehow stoke fom someone else.) Add to that unions dictating how you shall go about serving your customers (about whom the unions care as little as they do about those who invested in the businesses that employ them) and attempting to monopolize and dictate to the entire labor market, and you get…well, Michigan. Corrupt union leaders raking in union dues for themselves, destroying industries and economies, all in the interest of the “dignity of the worker.” Like those extremely dignified workers who collapsed a tent on the heads of people whose viewpoints were unacceptable to them and punched Steve Crowder in the face.

  • http://davidhdennis.com David H Dennis

    In the 1970s, when unions were at their strongest, American automakers made some of the worst cars assembled before or since. Unions and their members were often in open war against management, deliberately slowing down assembly lines and assembling cars poorly.

    There is a reason for this: Unions thrive when there is strong distrust between labor and management. If workers and managers hate each other, as they did in the 1970s, unions step in to mediate the conflicts and get as much as possible for their workers.

    Unions don’t just negotiate for wages; they negotiate for work rules. These rules are arbitrary and capricious, such as saying it takes a trained electrician to change a light bulb. They invariably slow down operations, increase costs and do nothing to increase product quality.

    The Japanese had a different way: As much as possible, they foster an alliance between workers and management, where the team works together towards the goal of the best possible quality. Management treats workers with respect, and they do likewise. This creates a work environment where vehicle quality is optimized. Incidentally, it’s not a low-wage environment; pay is about the same as in Union shops.

    As a result, labor in the foreign-owned auto plants in the south have successfully resisted unionism. It just doesn’t do anything for them.

    The problem with restricting foreign competition is that without competition, car companies will produce lousy cars, electronics companies will produce crummy electronics, and everything will cost 10x what it does now, thanks to high labor costs. That’s not the world I want to live in, for sure. Ironically enough, it would be worse for the poor and dispossessed than any other outcome.

    D

  • geek49203

    Crock of cr**.

    First, the industrial revolution — which gave rise to unionism/communism/socialism — has matured to the point where the slavish heavy labor jobs are all but gone. Flint used to have 100,000 GM jobs, and now GM has 50,000 employees in all North America. Ford once employed 110,000 in the Dearborn Rouge plant, and now Ford is at 45,000 in North America. The 1970′s model for the ALF-CIO, UAW (and the historical citations in this work) no longer apply because the world changed.

    Second, the Michigan unions made 2 political power plays that invited reprisal. First, the SEIU made a “closed shop” of everyone getting Michigan checks to take care of loved ones in their homes. Second was the Constitutional referendum that failed last November. Both of those sought to pad the coffers of the Dem party, and the GOP responded in that light. This, after all, has little to with caring for workers, and everything with political power (and money).

  • Jeff from Michigan

    “What’s the matter with Michigan?” Nothing. We are digging out of the unsustainable blue model. What’s not to like about governance where they stand up and address issues rather than kick the can down the road ala Grandholm. Detroit should have been put into bankruptcy years ago. We are addressing the fiscal issues and the underlying reasons for it. The power elite don’t like it because their rice bowl is being broken. The design margin is used up and Michigan is a harbinger of what is to come.

    Get ready it’s coming. Promises that cannot be kept will not be. Seeking to expand the design margin globally would only delay the collapse. All the supposed “elites” have botched their primary jobs of governance. Time for a change

    I just finished Kaplan’s “The revenge of Geography” and then Codaville’s “The Ruling Class” They point out reasons for the failure of our “elites”

    So what’s the matter with Michigan? Nothing.

  • JaminGMan

    Part of the reason for the private sector decline is the success of the very same unions getting work laws past. Many of the precious labor practice abuses unions strived against in the past are now against federal law. Overtime pay, child labor, worker safety and discrimination are all now regulated by the government. The only main thing left is pay and benefits. But if a union is to hard on a business for those it either goes bankrupt or goes overseas.

  • filbert

    Right-to-work laws do nothing more than placing the same sorts of competitive pressures on labor unions that companies experience. Companies have to balance worker productivity (of which worker satisfaction is a component) against overall profitibility. Labor unions under closed-shop laws have a guaranteed cashflow regardless of their actual performance in mediating the employer/employee relationship, and it is not surprising (indeed it is human nature) that closed-shop unions will not be as diligent in this sphere as right-to-work unions, and will instead have their attention wander to various peripheral issues not directly germaine to the employer/employee relationship. This isn’t a “unions are bad” or a “unions are good” position, it’s a “unions are people and will do what people do” position.

  • Clifton

    “Collective bargaining is all that keeps large numbers of Americans at least clingingly in the middle class…”

    That’s one of the big myths that gets in the way. Factory workers are not middle class: they do not manage other neither do their jobs require post-graduate specialized training nor are they business owners nor are their jobs primarily mental as opposed to physical.

    They are instead *skilled working class*.

    The “we’re all middle class” myth just gets in the way of seeing the facts.

  • kay

    The fault with the argument is that the unions are also “instrumentalizing” the workers. All union money goes to the Democratic Party and supports abortion even though that is not what many workers want. That wish is disregarded -totally, thoroughly and contemptuously. Then, unions drag workers in one place into no-win situations simply to enhance their bargaining power in other places. This happened with the Hostess negotiations and also with the Mercury Marine negotiations in Wisconsin. So it isn’t just capitalism that disregards the worker and that is one of the reasons why unions are declining. Wages come from only one of the fatcats ripping off the workers – why keep the other one?

  • http://thevailspot.blogspot.com Rich Vail

    “as the son of a rare jewish member of the teamsters…”

    Hey buddy, I’m WAS a jewish member of the United Brotherhood of Capenters and Joiners, I was a brother of:

    Michigan Regional Council
    3800 Woodward Avenue – Suite 1200
    Detroit, MI 48201 USA

    as well as:

    Mid-Atlantic Regional Council
    8500 Pennsylvania Avenue
    Upper Marlboro, MD 20772 USA

    Unions today are not about helping the working man, the Carpenter’s union is now a top down organization where the locals have no choice in their leadership:

    Union President is selected by the regional Vice presidents…who happen to be appointed by the local business agents…who are apppointed by the union president…so…circular logic means that the members are paying dues to keep the leadership in luxery…and aren’t answerable to anyone…

    Needless to say I quit the union. It seems the only reason for the union today is to keep the leadership in office…after all, they can’t be voted out of office.

    They only area where unions are alive and well are the public sector unions. So, I applaud Michigan for eliminating the requirement that I join a union to work in a particular shop. Unions are killing this nation, one shop/office at a time.

    They are answerable to no one…and only give money to one party. SO, it’s well past time to eliminate their monopoly to raking in money…only to give that money to one party.

  • Denton

    The problem I see with your analysis is that there is contract anymore. Salaried employees are closer to slavery than hourly and routinely dismissed for no cause other than the need to make the bottom line look better in a quarter. Management across the board treats its own lower levels, technical and support staff, and non-exempt as interchangeable parts. I’m not convinced management ever considered employees people but I know they don’t now.

  • Nate Whilk

    “We say, and to our credit we mostly believe, that all men are created equal; but for all practical purposes the very structure of our economy says otherwise.”

    We are *created* equal in that all have natural (or God-given, if you prefer) rights and are equal before the law. Even the Founding Fathers knew that men have different abilities and inclinations and that each should keep the fruits of his own labor.

    “All the same, no one who does not work for himself or within an integral family unit is truly free and “at liberty” the same way that someone who does work for himself is.”

    “What that means, among other things, is that understanding capital-labor relationships, and understanding the role of unions as well, requires more than economics.”

    Well, perhaps *more* economics is needed. Like the economic effects on the self-employed who now has to do his own marketing, accounting, etc. which take away time from his actual work.

    Martin Berman-Gorvine, sadly, like many on the left, has gone with ad hominem attacks, exaggerating the previous commenters into people who advocate “the most extreme form of laissez-faire (for the owners only, that is) capitalism”.

    He also dismisses them, saying, “That the intelligent management of capitalism to produce widely shared wealth requires a form of thought alien to Ayn Rand and her acolytes, is utterly beyond these folks.”

    I think we’d all be excited to hear the details of “the intelligent management of capitalism” that he mentions and where it has been practiced successfully on a large scale and for long periods of time. Because he’s sure of it, I presume he has done it himself. I’m sure many of us “folks” would understand it, contrary to his prejudices.

  • Mahon

    If all of this is the case, how do you account for the fact that the most innovative companies in America, whose employees are well compensated and treated – the Googles, FedEx’s, etc. – are non-union? Do you really think that the non-union employees at the Honda and Toyota plants in this country have less “dignity” than the remaining UAW workers in Detroit? There may be places where unions are necessary, but they are the trailing and not the cutting edge of the economy.

  • Kathy Kinsley

    Yes, sometimes “organized labor” is necessary. But not institutional organized labor.

    I, and *4* other people once formed an ad-hoc non-union, and faced down a fortune 5 company (you’ll notice the lack of zeros after that 5). We got what we wanted.

    They had decided to make our small and seriously downsized (working 60+ hours a week) department “overtime exempt” (oh yes, we’d all get raises – to about 25% of what we made on overtime…). We got together and delivered our two weeks notices…unless they reversed their decision. They reversed it. Within the hour.

    THAT kind of collective action, I fully support. Requiring dues and activism that only keeps the union heads fed? NO.

  • SunsetHoodlum

    People say they prefer to buy american. In reality it is much more complex. I suggest the author speak to couple of sales people who sell imported and domestic products.

    Thanks for the history lesson on Paterson. Brilliant article.

  • http://thewildwebster.wordpress.com TheWild Webster

    Employers should be able to hire whomever they want the same as individuals should be able to choose who they want to work for. Anything else is idiocy and allows for the abdication of responsibility on the part of one or the other parties.
    Many like to point to the days of the (so-called) “Robber Barons” and elude that we will inevitably fall into that kind of exploitation. What many fail to see is that without the coercive help of government force, neither party in any work relationship can ‘force’ another to do anything they are not willfully interested in doing.
    A worker that fails to meet the responsibilities of his job or to do so at a rate competitive to what others of similar capability are willing to do it will ultimately find himself unemployed. An employer that does not pay his employees commensurate with their experience in a given market will find himself with no one working for him. Without an outside hand of government allowing or engaging in coercion, the only source of exploitation in such a situation is a failure of one or the other parties to both understand and exercise their willful participation in any work arrangement.
    So the modern unions allege the historic employers irrationally and unjustifiably exploited their workers. There may be some truth to this, but not without the inclusion of government power that both allowed and assisted in them doing so. And not without properly acknowledging that now the tables have turned 180 degrees and now organized labor can irrationally and unjustifiably exploit the employers with that same assistance of government monopoly on the use of coercive force.
    Both practices should be ended and all the individuals involved should be held responsible for their own rational or irrational behavior.

  • Tom Perkins

    “Some fool once tried to persuade me that unions never had any moral purpose or standing, but were just ethnic gangs organized to keep outsiders from certain job categories…how pathetic.”

    What’s pathetic is how true it is, and how you don’t recognize it. My sole experience with unions personally, is one of terrorism, sabotage, and threats against my person. Not a lot, but it was informative. Wrecking work, leaving messages on the phone, and telling me they’d break my fingers if I picked up a screwdriver–my word against theirs. I’ll give mightily to keep their children fed, clothed, and schooled, but every one of those thieving scum can die cold in a field for all I care. There is not one union which is not a conspiracy against the public, and every one of the workers could have tried to go be a farmer if they thought that was a better deal, not one of them was forced to work in a mill.

    The bottom line of this law is that the workers can fire the union, which is all that could keep the union as honest as it can be, which is never better than being a monopolist protecting bad workers and good alike, and making goods more expensive to the enrichment of the workers in the union and the relative deprivation of those not in it.

    I suppose you think that if everyone joined the Union, then the hamster wheel would go around by itself?

    Mr. Garfinkle, if in an market not jiggered with Union violence on the scale, if their labor wasn’t worth a middle class life style, why should they have it?

    Look for the Union Label, then don’t buy it.

  • David N. Narr

    Agree w/DenisC above: Too much Euro-Socialist theorizing. The Unions created this problem for themselves, just as management and 19c circumstances encouraged the rise of the unions; the Unions (and technology) encouraged management to flee to jurisdictions where they could enjoy greater scope to run the businesses they built.

  • Douglas6

    The biggest problem with trade unions – one that the author completely ignores – is the negotiation of work rules. Wages and benefits are one thing, but work rules are what make unions uncompetitive and destroy companies. The Teamster work rules – forbidding cake and bread to be transported on the same truck – are what drove Hostess into bankruptcy. Many employers would be far more willing to accept and negotiate with unions if all that the unions negotiated were wages and benefits. It’s all the rest that makes dealing with a union so unpleasant and wasteful.

  • Jim M

    Adam,

    I don’t understand how allowing people (workers) more freedom is a bad thing. If workers are not compelled to join a union by “right to work” laws and unions lose their power and influence, who is to blame? If the unions can’t make a persuasive argument to convince workers that paying union dues are in their best interest, who’s fault is that? If the average worker sees union bosses living high on the hog as a result of confiscated union dues, how is that different than a greedy capitalist taking advantage of the worker’s labor? Please explain. I would like to hear your side of the story.

  • Laika’s Last Woof

    Our nation was conceived in liberty, not “egalitarianism”. I don’t believe that word appears anywhere in the Constitution, either in its original text or any of its amendments.

    “Liberty”, on the other hand, you can find in the first paragraph. If you think your pointy-haired boss is a human-capital-instrumentalizing son of a so-and-so or whatever just quit and write a comic strip instead. You have that right.

    And if you don’t want to pay that guy who punched Stephen Crowder protection money just to do a job he has no business interfering in you no longer have to do that either … thanks to Michigan’s new right-to-work law.

  • Andrew Allison

    As George Will wrote: “The unions’ frenzy against this freedom is as understandable as their desire to abolish the right of secret ballots in unionization elections: Freedom is not the unions’ friend. After Colorado in 2001 required public employees unions to have annual votes reauthorizing collection of dues, membership in the Colorado Association of Public Employees declined 70 percent. After Indiana’s government in 2005 stopped collecting dues from unionized public employees, the number of dues-paying members plummeted 90 percent. In Utah, the automatic dues deductions for political activities was ended in 2001; made voluntary, payments from teachers declined 90 percent. After a similar measure in Washington state in 1992, the percentage of teachers making contributions fell from 82 to 11. The Democratic Party’s desperate opposition to the liberation of workers from compulsory membership in unions is because unions are conveyor belts moving coerced dues money into the party.”
    adding a quote from Jefferson, “To compel a man to furnish contributions of money for the propagation of opinions which he disbelieves and abhors is sinful and tyrannical.”

  • Kurmudge

    Mr. Garfinkle is disingenuous at least, and ludicrously foolish at best. He acknowledges that you can’t export trade unionism, especially to those poor autocratically-governed countries whose low wage rates beat us in economic competition, he acknowledges that globalization is here to stay, and he notes that the companies that fail to compete go out of business. Yet, he suggests that we should let that happen, even when there is a better alternative- right to work.

    Are the non-union auto shops in Tennessee sweatshops? No- they get nearly equal wages, and decent fringes- they are simply not ruled by self-interested, featherbedding UAW bosses whose work rules, not wages, drive the companies into bankruptcy. The UAW inflexibility reflects the idiotic myopic voting patterns of the country, pretending that you can increase the cost of labor and preserve the same number of employees.

  • Bruce Russell

    Mr. Garfinkel is obviously longing to instantiate his dreams upon a cursed world. How does a unionized UAW worker have more dignity than his nonunion counterpart in Tennessee or South Carolina? Is there dignity in knowing that your high pay and benefits have destroyed the auto industry?

  • Bob Clyde

    Garfinkle’s cri du coeur is stuck in romantic memories of the unionism of a century ago. The realities of today are the opposite of yesteryear. Today’s unions, for the most part, do nothing essential or even very useful for workers in our now largely service economy. If the unions actually do something for their worker-members, those workers will continue to be dues-paying members. If not, the unions will wither.

  • Tom

    Thanks for a set of fine thoughts, which never the less make a lousy argument.

    Whatever their thinking or their actual motives—and I’m not thereby giving them the benefit of the doubt—they are instrumentalizing people.

    In fact, the union leaders have, for far too long, both instrumentalized their own members as well as the admittedly fictitious corporate person.

    Kurmudge #90 notes that UAW work rules are terrible; not addressed in this long note, and thus silently consented to.

    Andrew #89 notes that unions compel members to pay dues, which are used to support Democrats, who often have political policies the union members disagree with. That is already a breaking of what should be a bond between the member and the union — an actual breakage far worse than the hypothetical one alluded to, but never described in enough detail to falsify it.

    The notes about “wage slavery” are very relevant. But working for oneself, being an entrepreneur, involves a risk/reward/effort combination, not mere ratio, that most University educated folk resolve in deciding for the wage slavery instead of the risk. Unions and Democrat anti-business attitudes are a big reason there is too little entrepreneur-ism for optimal growth plus wealth spreading. (Plus that e word is too long.)

    Another issue not discussed is the reality that ownership requires saving, non-consumption, but most workers prefer total and even over-consumption. So they don’t build up savings (except in their house. except not now.)

    Finally, to leave off the gov’t unions is to miss the most important aspect of unions today; and of the near future.

  • Nathan

    I don’t buy the argument that modern non-union working relationships are akin to indentured servitude. Mr. Garfinkle recognizes some of the substantial differences and even names the important one, though he gives it too little credit: Workers can move.

    The mobility of workers allows them to take the quality of their work with them and to bargain effectively with an employer, assuming that their labor is valued. Americans in the workplace see this exercised every day. In essence, this is claiming that individuals can form a union of a single person. If that “union” has valued worth to the company, the company will bargain within its ability with the “union”. If not, then they shouldn’t do so anyway, the “union” isn’t producing.

    Unions are not the only way to go. The ability of workers to move is the whole point. Don’t brush by it.

  • Louis Wheeler

    Let’s dismiss the socialist propaganda: Trade Unions are a cartel. Their only purpose is to restrain trade; this is why they were specifically exempted from the 1890 Sherman Anti-trust act.

    They restrain trade in order to jack up wages above the free market rate. Every member receiving above market wages causes another worker to receive correspondingly less. This disparity is unnatural, so unions must maintain their position through politics and violence.

    Unions are in decline because people have found ways around their dominance. Either technology and capitalization has obsoleted their job classifications or their jobs have been shipped overseas or to some nonunion state. Industries shift locations when Union inflexibility renders them incapable of competing.

    Trade Unions are at their endgame; their only growth has been in government. Michigan has been losing jobs since the fifties; Detroit has become a wasteland.

    Right-to-Work legislation is the only thing which will keep jobs in the state. Michigan will continue to lose jobs until they lower their tax rates. Many other states are more business friendly.

    The US dollar is losing its Central Bank reserve status, so the price of foreign goods will triple to quadruple in a few years. As a consequence, jobs will be returning to the US. But, those jobs will not be in Michigan, as long as some other state has lower labor costs.

  • richard40

    “Owners recognize and deal fairly with unions only under two conditions: when the circumstances of competition make that economically viable, and when they acknowledge the dignity and humanity of their labor force.”. You also need a 3rd condition, a sensible, non-corrupt, non-radical-socialist union, that will deal fairly with them, and realize that the workers dont do well in the long run unless the business also does well.

    I also disagree that right to work will definitely destroy unions. It will destroy corrupt unions, that care more for the union bosses, union burocracy, and the dem party, than for their members. It will also destroy unions that solely value seniority, and exclusively protect senior workers and pensioners, even non-productive ones, at the expense of younger and better skilled workers. If the union realy does benefit all the workers, and not just the union leadership and some workers, then the vast majority of workers will be eager to voluntarily remain in the union, despite right to work.

    Right to work basically turns unions into voluntary associations, where people join for mutual benefits and fellowship, instead of monopolistic rent seeking cartels, where people must join as a condition of employment, instead of joining them because they beleive in the union.

    • Louis Wheeler

      Richard, Trade Unions have mostly been adversarial. They accept the Marxist position that businessmen are exploiters and unnecessary. The truth is that workers and management have different functions; only by cooperating do they succeed.

      Businessmen do not control prices, wages or costs; a marketplace does that. Competition and cooperation are necessary for success. From the Civil War until 1910 when the Progressives took over, prices fell as production rose. Wages, standards of living and profits increased because productivity improved.

      The problem is that the US has, since the 1890s, been following what Walter Russell Mead calls “the Blue Model.”

      The Social Gospel and the Progressives have promoted the Corporatist welfare /warfare state. They are attempting to create a Heaven on Earth through government actions. This never worked very well and is now falling apart. An uneasy alliance was formed with the Marxists which often broke out in violence.

      Both labor and management were turned into cartels under FDR. Workers and owners had the pretense of freedom. Much as in NAZI Germany, the government called the shots.

      There is nothing wrong with workers having agents representing them. But, the Union leaders became worse exploiters than a boss could ever be. The Unions controlled the government to give the Union leaders benefits at the member’s expense. But, all this is approaching an end.

  • Mike Giles

    What has changed is that unionism arose in an era when the US received millions of immigrants yearly,in an era when most work was – at best – semi skilled. No businessman is going to pay you more when there are ten guys lined, up outside the door, willing to take the job. I think that accounts for the level of violence in US labor relations. Violence was the only way to keep those ten guys from taking the job. BTW, where did the idea that unskilled workers, on an assembly line, should receive middle class wages, begin. Shouldn’t middle class wages be received by skilled workers or professionals?

    • Louis Wheeler

      Mike, America became a victim of its success. The US was long known for paying its laborers more than in Europe. The Elites complained that employees were not properly servile. Labor was in short supply. The reason was simple: workers were always quitting to head West to build a farm. Or they went into business for themselves.

      This changed after the Civil War because America was flooded by immigrants. That increased the competition for jobs, so wages fell.

      Since these workers tended to increasingly come from middle or Southern Europe they were infected with Socialist ideas. This meant that they expected to be servile to a boss and were less likely to be entrepreneurial. Since, according to Marx, owners would grind the worker down to a subsistence living, workers felt they needed an agent to represent them.

      Unfortunately, those agents became corrupt and exploited the worker worse that a boss would ever do. Mechanisms were set up to lock employees into a company and their unions.

      There was, also, the effect of the Progressives. They cartelized Labor and management to make them less entrepreneurial. This progressed from 1890′s onward, but the big push was under FDR.

      Foreign competition in the 1980s cleared away most of America’s business cartels. Unionized businesses could not compete. Firms without unions had the flexibility to respond quickly to changing market conditions.

      Union participation has been in decline since the 50′s except in government. It is now their turn for the ax, because states and cities are bankrupt.

  • Andrew

    I confess to not having read all prior 95 comments, so maybe somebody already made this point. That is, I was frankly surprised to read this lengthy, eloquent, fairly comprehensive post about the role of unions in protecting the interests of labor from capital, including the positing of two equally unrealistic global solutions (total American protective state; and export trade unionism elsewhere), yet not once was there any mention of the obvious middle-ground: eliminate the barrier between laborers and capitalists by giving workers ownership stake in the enterprise.

    You see, if laborers are paid solely in wages, they are irretrievably at the behest of advances in technology and the resulting productivity gains. In the global economic competition, they have already lost; those spoils will inevitably go to the owners of the capital. Increases in labor productivity, meanwhile, more equally flow to the workers themselves (the worker who can knit 10 socks any hour will command higher wages than the one who can only knit 5). Unfortunately, the rate of productivity growth for labor is much lower than for other applications of capital (i.e. IT and automation). The only reasonable, tactical approach to mitigate these trends is to give workers equity stake in the companies for which they work.

    Yes, I know, in the post-Enron world, we want to diversify our 401k and all that good financial pragmatism. But at the end of the day, the only way to square this circle is to make it economically advantageous (whether through taxes, regulation, or otherwise) for companies to divvy up their ownership such that its workers have a seat at the table in board meetings and reap some of the benefits of rationalization and technological progress.

    • Louis Wheeler

      Sorry, Andrew, cooperatives have been tried. They don’t work well. Sometimes, an owner is caught in a bind where major changes must be made. Too often, the employees in a cooperative will not accept those changes, so the company folds.

      There is only true way of looking at a business: everyone in it is self employed, selling what they own. That is easy to see that in the case of the owners, but that applies to laborers as well.

      Workers sell their property, their labor hours, to someone else. They receive more money from an owner than from doing anything on their own. Moreover, they take no risk in the business. They do not come up with hundreds of thousands of dollars of capital necessary to enable them to combine their labor hours with raw materials to produce something salable. They need not find buyers, since goods do not sell themselves. If another employer offers them more money, they are free to walk away. They don’t owe the employer anything more than honestly doing what is asked of them.

      Hence, their employer owes them nothing more than what was contracted. If the employees want to sit on a board of directors, then they are free to start up a competing business.

      There is a division of labor here. Each person specializes in doing what he does best. Workers often do not have the skills and training to make management decisions.

      Only businesses without much competition (cartels) can afford to monkey with what works. That does not say that workers are not intelligent; management would be wise to ask for employee input, especially in technical fields.

      The idea here is very simple. Unless everyone in the company hustles to provide salable goods and services, then no one will be paid for long. If an employee provides a sufficient profit on his labor, his employer will pay him more, to keep him from being bid away or from going into business for himself.

      Using the government to effect the changes that you want, just lowers everyone’s profit.

    • Shaun

      I can somewhat agree with this point, but would this not also leave the workers more at the mercy of economic shocks? There would have to be the proper mix, but something like this could work, but I can also see a situation where moral hazard could corrupt the company.

      • Louis Wheeler

        What causes the economic shocks, Shaun? Shouldn’t we address this fact before we use politics to bias the market in the Trade Union’s favor?

        I suggest that you look up “The Austrian theory of the business cycle.” It explains why we have economic shocks. Before Fractional Reserve banking was invented in the 1660s there was no boom / bust economic cycle. If you increase the money supply this causes an artificial boom which must be liquidated later.

        The problem here is that the Progressives favored cartels in labor and business. This lead to the welfare / warfare state promoted by the Prussian state under Otto von Bismarck. The Progressives borrowed our economy and educational system from Prussia. No wonder we experienced the same decline as did Germany.

  • Philip

    Thank you. I’m a conservative, so I do disagree with you on some points, but I enjoyed your article. I think you made some good points and had given me some new perspectives on the issue.

  • Mike

    Via Instapundit: RICHARD EPSTEIN: “Between 1980 and 2011, overall employment levels rose by 71 percent in right-to-work states. In non-right-to-work states, they only rose by 32 percent. That differential does not come at the expense of wages, which grew four times as fast in right-to-work states: 12 percent versus 3 percent elsewhere. The explanation is clear enough. The productivity gains from escaping union work rules are shared with employees as employers bid up wages. The short-term monopoly gains to unionized workers eventually are, over time, more than offset by productivity losses. The New Deal union model is an economic mistake of major proportions.”

    That more or less obliterates your entire argument. Unions are bad for America.

  • Tom

    @Andrew:
    One way to do that might be fore the unions to take their dues and, instead of using them for political contributions, buying stock in the company. Unless there’s some law against that, of course.

  • http://yahoo William D.

    Those born after 1946 will probably have a difficult time understanding “Right to Work.”
    or many of the other complex labor issues.
    We do not yet have an agreed upon set productivity measurements and the real hard issue of “Community values”
    Adam Garfinkle alludes to a time we once had but lost due to over emphasis on “free market economic theory” and individual competition. Unions could teach the young about community if they reform.

    Consider:
    You work in a factory, you are a working class guy married with kids. Your job is hard and grimy but the pay is good enough to feed, cloth, house the family. The factory has reasonable production standards and good working relations with the labor force.
    One day management announces increased production standards with no increase in pay. Company profits are up and dividends are increased. But … Working conditions and morale are getting poorer and management is developing a “them and us” mentality. Also, there is some talk about our jobs going overseas.

    Can we conclude that labor needs representation?

    Absent enlightened management, I think it is absolutely essential.
    Current economic/political conditions work against most workers. If workers do not unionize and engage in the political process they will not prosper and will decline. (Remember the Supreme Court ruled that corporations are people) And yes unions need to modernize and reform. No tampering with the pension funds and democratic political voting for union members.

    Prof. John Kendricks(Sp.?) wrote that pay increases should be awarded bases on productivity increases. Kendricks added another idea. “Productivity” should be based on more than just increases in widgets per man hour. He felt that established accounting practices did not portray adequately the health of the company. He believed “productivity” should be broadened to include many other items. Long term profits achieved by short term labor cuts regardless of profits should not be allowed. It is interesting to note that management is judged on very little other than profits. Underfunding pension plans, differing maintenance, selling off assets are not held against managers. (A proponent of “Total Factor Productivity” measurement).

    Prof. John Dunlop (Harvard University labor economist and arbitrator) wrote that labor should not get pay increases without productivity gains. Many corporate managers did not agree. Why?

    Might be worthy to note that unionization of workers is increasing for government workers and service workers in general. Why?

    What would make over 10,000 government workers jeopardize a relatively high paying job by going out on strike?

    Poor morale? Lousy working conditions? Poor management? Money was not a factor.

    Note: Ronald Reagan wrote Robert Poli (PATCO Union President) a letter, before the election, on Oct.11, 1980 …
    “You can rest assured that if I am elected President, I will take whatever steps are necessary to provide our air traffic controllers with the most modern equipment available and to adjust staff levels and work days so that they are commensurate with achieving a maximum degree of public safety”.

    “… I pledge to you that my administration will work very closely with you to bring about a spirit of cooperation between the President and the air traffic controllers.
    Such harmony can and must exist if we are to restore the people’s confidence in their government”.

    PATCO and most air traffic controllers gave their support to Reagan.

    August 1981, President Reagan fires over 10,000 controllers.

    So much for “good faith bargaining”

    Note: I have worked in New Jersey factories in Newark, Bloomfield, and the Oranges.
    I was a union member of the AFL/CIO and a charter member of PATCO (non-striking).

    The young, and many managers will find labor and labor history difficult to understand. Maybe it is like the military. Unless you were in combat you may not get it.

    Significant labor book to read by Prof. Joseph McCartin, Prof. Georgetown University,
    Collision Course: Ronald Reagan, The Air Traffic Controllers, and the Strike that Changed America.

  • Ed Roger

    Unions are a labor cartel much as OPEC is.
    In places that have changed to right to work, thousands of workers are opting out of joining into this mis-use of their union dues to contribute to political causes that they do not agree to. Democrats are really big on choice, until it comes to school choice, and a mans right to CHOOSE to join a labor union or not. Let Union members vote, I say. Let them vote with their feet. The rest of us that toil for 40+ years are tired of funding their aggregious pension and benefit packages that pay for 25 or more years after the are vested, and then continue for their spouses. Some deal huh?
    Thanks taxpayer, but NO THANKS to unions, and their thuggery which they call “bargaining”

  • Shaun

    To me this article represents a strong refutation of Rentier Capitalism, a type of Capitalism many on the hard right seem to think is the same thing as Laissez-Faire. It’s more like Socialism for the Rich and quite frankly I’m deeply puzzled why so many commenters seem to defend that.

    • Louis Wheeler

      Sorry, Shaun, People on the right do not favor Rentier Capitalism. We call that Crony Capitalism. Businessmen are not all the same. Some people and firms get and maintain their wealth through contacts in and special privileges granted by government. We oppose them. They support the Democrat Party now.

      What confuses you is the rise of the Progressives who sought restrictions of trade through cartels in labor and management. The Elite monied classes (old money, such as Fisk, Gould, Astor, the Credit Mobilier group, etc) are not capitalists. They did their best to prevent the real capitalists like Armour, Carnegie, Sears, Rockefeller, James J Hill and Henry Ford from succeeding.

      Your position is refuted by American history. Workers progressed the most when there was the least governmental control. I suggest that you look at the phenomenal increases in standards of living between 1870 and 1910. Ordinary people’s lives improved despite enormous immigration.

      Unionization is opposed to freedom and prosperity. The Unions favor minimum wage laws which prevents young people from gaining work and experience. The only way the Unions can get above market wages is to depress other worker’s wages.

  • Mary Wilbur

    Garfinkle has a very romantic, nostalgic view of unions. I never had a union job, but while I was employed I never thought of myself as an “identured servant” or thought my employers treated me with anything other than the dignity that we owe every humanbeing. Unions have, I think, created a terrible model for the laborer. The adversarial model of the relationship between labor and management has slowed or prevented the development of a cooperative way of doing business. This is a 19th century idea. I believe it’s called the labor theory of value or something like that. The greatest problem that labor, both union and non-union, has in the 21st century is that technology is putting them out of a job. One of the commenters has already mentioned that the kind of labor that will be needed in the fast approaching future will require far more brains than brawn. The number of people who will become redundant by virtue of automation and who lack the intellectual skills necessary to create it, is frightening. What will they do?