Why I hate Unions, and you should too

I’ve been reading an awesome book lately by the economist F.A. Harper called “Why Wages Rise”. He makes a brilliant and rational case debunking the widely held belief that we owe our current working conditions and high wages to Unions and the Labor Movement. I’ve noticed that many people on this forum hold the before mentioned belief to be true, and even present it as a well-known and irrefutable fact. I’d like to attempt to present the other side of the argument.
The belief that wages rise because of Union activity is one made by simple observation. People see union’s successfully bargaining or striking for higher wages, and assume that these efforts must be what are responsible for the general rise in wages.
However, Harper points out that such a close up observation can lead one to draw an improper conclusion. He uses the analogy that, by examining a fly running along a chariot wheel, one might conclude that it is the fly that is propelling it. In order to gain a proper perspective of the general rise in wages, one must back up, and observe the entire situation telescopically.
He then presents the below graph. The top line shows the mean wage rate from 1850-1960, and below it the percentage of gainfully employed workers that belong to Unions during the same period.

It’s obvious when looking at this graph that there is no corollary relationship between union membership and the rise in wages. From the period 1850-1895, wages were rising at an impressive rate, and yet union membership was well below 10% the entire period. If one is to draw any relationship at all between union membership and wages from this graph, it would NOT be that an increase in union membership results in increased wages. If anything, the graph points to an increase in wages resulting to an increase in Union Membership, which is just the opposite of what one would expect.
As a prelude to his explanation for why wages DO rise, he presents the below graph in the chapter following.

Its purpose is clear. His case is that wages rise when productivity rises. He explains this using the a priori approach by giving the example of a single person on a deserted island. This single person’s “wage” (or earnings) would obviously be whatever he was able to produce from his labor. If he was able to catch 5 fish and collect 10 berries in a days’ time… his wage would clearly be 5 fish and 10 berries per day. Any hopes of improving his wage must come through improving the productivity of his labor. After this he spends a lot of time discussing the various ways that workers can and have improved their productivity over time (capital equipment, the division of labor, trade, etc.)
I won’t go heavily into detail on his explanation, because it’s not the purpose of my post. My main purpose is to show that the general rise in wages being a result of Union Activity is certainly NOT an irrefutable fact and that there is actually a lot of evidence to the contrary. One must look no further than periods when Union Membership was literally 2% of the entire workforce, and yet there was an across the board increase in wages / purchasing power anyway.

Also, despite what is usually taught in public school, Union activity often causes much more harm than good. Direct sources, such as newspaper articles of various Labor movement events tell the true story. Strikers continuously used violence and coercion against employers, and would physically attack or even kill workers who would try to return to work. The mobs they’d form were often started by, and consisted mainly of “unemployed sympathizers” that had nothing to do with the firm they were striking against. In several instances, when interviewed, the workers had no idea what concessions the employer was even offering at the time. Once formed, the mobs would typically go firm to firm in an attempt to bully workers of other companies into joining them. A great example of this was the attempted strike at Erie in 1870, or the famous “Buffalo Blockade”.
Our school history books often depict the labor movement as this benevolent and noble uprising of the oppressed under class that was mercilessly crushed by evil Robber Barons and various police agencies. In reality, the police / business actions against striking workers was almost always in defense against violence initiated by the strikers themselves.
Here are some Sources (if you're interested)

There is nothing wrong with workers peacefully joining together and collectively negotiating for wages / benefits... It's when they employ violence against employers or other workers that it becomes a problem. Because of the violent tactics that Unions often resort to, and also because there is bountiful evidence that wages rise with or without Union activity, I've come to the conclusion that Unions, and the labor movement as a whole, are largely irrelevant, and should generally be frowned upon.

 

If it wasn't for unions, there would be no such thing as weekends, vacations, workers rights, workers comp, workers rights, fair wages, retirement, or medical benefits. We would all be paid slave wages, like in China. The 119 that died in Bangladesh were making 50 cents an hour, working 12 hours a day, seven days a week. And their families got diddly squat when they died. You really like the idea of that kind of life? That's why you're wrong. If you had two brain cells, you could rub them together and start a fire. Sheesh!

Don't bother trying to respond to me, unless you just want to B.S. other viewers, because I have no interest in any more of your lack of reason.

 

Don't worry--the right has busted them down to 7% now. And you are fucking DEAD WRONG.

And hell no--I didn't read what you put--mainly because I know better. Fuck.

 

Yes, unions have succumbed to the worst kind of bureaucracy and nepotism. Now imagine your working life without unions - it's not hard - just go visit a sweat shop in India or Southeast Asia, and you'll have a pretty good idea of the kind of wages and working conditions you could expect.

 

LOL.. damn son... harsh words. When approaching an issue, shouldn't you look at all sides of the argument, examine the data, and determine what is the most plausible and logical view point? I'm not asking you to agree with me, simply that you hear my side and give it an honest and fair analysis.

Your reference to sweat shops doesn't say anything for or against unions. Wages are incredibly low in those countries not because a lack of unions, but because a lack of education, a lack of capital equipment, and as a result a lack of productivity per worker. People in those countries work in those factories because it's much better than their alternatives. What do you think would happen if they all Unionized and demanded 40 hour work weeks, higher wages, and weekends off? The factory would pick up and move elsewhere, and they'd all be starving and homeless again. It's never the workers in countries like Honduras or Bangladesh that you'll hear complaining about a new factory opening up there. I think they much prefer the opportunity to work there over their life of prostitution, beggary, and disease.

Truth is, factories and sweat shops operating in Bangladesh are directly responsible for improving the wages and standards of living of people living there. Forming a Union would completely negate that.

 

Is there any particular reason your graphs end in 1955?

I can't remember that happening in the UK recently.

I thinks it's fair to say Unions have different histories/relevance and significance depending which part of the world you live in.

I certainly think Unions in the UK and possibly US receive undue credit for workers rights and conditions. Perhaps it was true once upon a time. I don't think it is true now.

 

WHO IN THE FUCK ARE YOU PEOPLE????????ARE YOU=ALL IGNORANT???

THIS FUCKIN BULLSHIT RIGHT HERE PISSES ME OFF WORSE THAN ANY POSTS IN 13 YEARS ON HERE!!!

TRIANGLE SHIRTWAIST CO,HAYMARKET,MATEWAN,JUST FOR STARTERS.

Fuck it-fuck it fuck it. I can't even type anymore fuck it.

 

No sense in giving yourself an aneurysm over a dumb thread, scratcho.

 

:bomb:

 

The book was written at that time. (Why Wages Rise By F.A. Harper) PDF <-Graphs are on page 11 and 16

I haven't looked into the others you mentioned in detail specifically, but the Haymarket episode, I know for sure.. has been largely misrepresented by Historians.

For starters, the vast majority of strikers weren't even employed at the McCormick Reaper Company, and were actually "left-wing anarchists" (aka communists) using the union management disputes to their own advantage. Major labor unions had unilaterally denounced the actions of these groups on several occasions, including Samuel Gompers of the American Federation of Labor and Terence Powderly of the Knights of Labor.

According to the New York Times (17 February 1886, p. 1), “There has been some trouble between the men and their employers for a week past, mainly over the question of wages. The company has conceded every point but one, and that is that five non-union men at work inthe foundry be discharged.”

Which side does it sound is being unreasonable?

Furthermore, violence was initiated by the strikers (as is usually the case) when on February 25th a foreman on his way to work was threatened with a gun. Later the same day, an engineer and a group of gas fitters were accosted in an attempt to keep them out of the plant. When hundreds of workers expressed a desire to return to work the New York Times reports: “Great crowds of strikers lined Blue Island Avenue, facing the works with the evident intention of intimidating any men expecting to go to work.."

After several days of this violence and intimidation, the New York Times reported on May 2nd: "the strikers made a tour of the railroad freight depots. Wherever men were found at work, they were induced, either by arguments or threats, to quit. At the Lake Shore station the doors and windows were closed, but a striker with a sharp eye discovered that freight handlers were at work inside. The doors were broken down and a crowd 1,000 strong forced its way into the building. A couple of policemen tried to drive the intruders out, but, of course, could not. Captain Buckley and a squad of men had better luck, and the crowd tumbled out into the street."

The day of the episode, May 3rd, the demonstrators (most of which weren't even employed at McCormick Reaper Company) were incited into a riot by the anarchist "August Spies" and union leader "Fritz Schmidt" who said (among other things), "On to McCormicks and let us run every one of the damned scabs out of the city!" When the working bell rang, the rioting mob picked up weapons, such as sticks and rocks, and charged the factory... the police defended the McCormick factory and their peacefully working employees. Shots were fired on both sides, eventually reinforcements were brought in and the crowd was finally subdued.

Not exactly a shining example of the glory of the labor movement...

 

I only ask because I wondered if the graph would be the same going forward.


Similar thoughts -
It seems plausible in theory that unionisation, by lobbying for better pay, would be responsible for rising standards of living but that is simply not the case. Wealth can only come from production, and all the legislation or demands in the world mean nothing without the capital and productivity there to meet those demands. More often than not, actually, unions prevent low-skilled labour from entering many industries, decrease competitiveness and production (the very factors that lead to increases in wages and wealth), and historically have been much more hostile and unfair to non-union workers than CEOs and business owners.

http://www.policymic.com/articles/1...hould-honor-free-market-capitalism-not-unions

 

I just got re elected to the board on my union

I didn't bother to read all your bs but I'm sure some might be real but I'm sure most of it is BS

 

I also disagree with the OP, but I don't think that resorting to name calling is the right way to respond

I can understand being frustrated with the OP, because one is hit by a barrage of flimsy arguments and false assumptions. Refuting the argument is therefor an undertaking, which is annoying. I get the feeling that an economist with a deep understanding of these issues and willingness to do a little research would be able to cut this argument to far finer ribbons than I could.

Let me start, however, in describing ways in which I do (or might) agree with the OP

There's a lot to criticize about unions. I reject the notion that the unions were the primary instigators and victims of violence, but I'm sure there are cases where union members were blame worthy.

Unions have a long history of being involved in organized crime. Unions tend to represent their own membership, often at the expense of other workers. Senior members of unions get higher benefit levels, and are less likely to be laid off, even if they perform at lower levels than newer employees

In some cases, wages can be so high for union employees (e.g., detroit autoworkers) that there is no economic incentive to develop more valuable skills

There is a problem of incentivization which is present in any economic system. corporations, unions, and individuals have a tendency to act on principles of self-maximization. they will act to get as much for themselves as possible, while producing as little value for others as possible, and are certainly also willing to harm others in order to get the biggest piece of the pie for themselves.

if one's goal is to have a system that creates the greatest value for society as a whole, the tendency of corporations to act selfishly needs to be put into check. unions act as a check on corporate greed to some extent, but they also act selfishly. also, the tactic of striking is an inefficient regulatory mechanism. it would be better for government to regulate corporations, but in the us, at least, the government has come under corporate influence and can no longer regulate effectively.

Addressing the specific argument that productivity drives wages. This is absurd. The example of the individual on the island has no bearing on economic issues, as there is no market place exchange in this example whatsoever.

It is more reasonable to say that labor in a market economy is priced in a manor identical to the pricing of commodities, which is to say, based on supply and demand.

If a corporation on the island had to pay the worker 5 fish and ten berries to get them to work which produced a greater-than-5-fish-and-ten-berry return, that's what they would pay.

If they could get away with paying just one berry for labor that was 1000 times more productive, that is what they would do.

productivity has no relationship to wage that is independent from supply and demand.

making an economic argument based on data that cuts off at 1960 is absurd. no legitimate economist would take such an argument seriously.

if you actually looked at the post-1960 data, you would see that a single worker family made more money in 1970 than a two income family does today for similar levels of productivity.

why? the most obvious reasons are that women entered the workforce, expanding the supply of workers, while the demand for workers remained about the same. also, the outsourcing of work to china.

in other words, as the supply of labor increased, the bargaining power of corporations increased and they were able to drive down wages.

 

The most significant union accomplishment I have witnessed since my entering the workforce has been one of lowering the incentive and productivity of all workers to a level equal to or below that of those most lacking incentive and being least productive.

 

I simply said that wages rise as productivity rises (if you'll see my post). The actual mechanism that drives them to the current level of productivity was left out, as it was not the intention of my post.

You can derive most all economic principles via this framework. All of which still apply when extrapolated to an exchange economy.

What was not explained was the bidding process between firms that brings employee wages to an approximation of each workers level of productivity (or their Marginal Revenue Product).

However it wasn't the intention of my post to explain in full this mechanism. My intention was to show that the claim that they rise because of Union Activity, is not supported by evidence.

As I said here:

"I won’t go heavily into detail on his explanation, because it’s not the purpose of my post. My main purpose is to show that the general rise in wages being a result of Union Activity is certainly NOT an irrefutable fact and that there is actually a lot of evidence to the contrary. One must look no further than periods when Union Membership was literally 2% of the entire workforce, and yet there was an across the board increase in wages / purchasing power anyway. "

I agree, this is true. It's important to point out though, that if the labor itself was able to produce 1000 times that of one berry, the laborer would not work for the corporation, and simply produce 1000 berries for himself.

You've touched on an important exception in the bidding process between firms for labor though. The actual point of equilibrium isn't the workers precise Marginal Revenue Product, but the Marginal Revenue Product of their next best alternative. In the presence of a Monopoly, or circumstances where opportunity / competition is limited, the marginal revenue product of their next best alternative is sometimes quite low.

However, like I said... it was not the intention of my post to go into detail about this process, and I don't see how you pointing it out refutes any of my claims?

The book was written in 1957, and encompasses an 100 year period... I've seen economic arguments based on MUCH MUCH smaller time spans...

I think any "legitimate economist" would agree, that a century is a pretty reasonable sampling.

Where is the data?

Your "obvious reasons" are complete conjecture, and aren't supported by logic. Your theory implies that there is a fixed number of jobs available at any given time. Which would be true in a world where human capital outnumbered the amount of land and resources available to labor on, however it's not. As long as there are unfulfilled human wants, and resources available to satisfy them, there will always be a potential for work.

My explanation for wages declining in relation to productivity (if they indeed are), would be that the marginal revenue product of workers next best alternative, here in the United States, is being reduced because of government policy hampering market competition.

Real productivity has also become increasingly hard to quantify, due to the cost / benefit analysis of hiring additional workers in the United States growing increasingly convoluted. There is a massive regulatory burden, tort law that dramatically raises employer risk, a complex tax code that often reduces the incentives to hire, etc. etc. etc.

If wages really are separating from productivity, I would look for some sort of intervention into the economy that is preventing market forces from fully functioning. Which would bring about your conclusion of incumbent businesses having more bargaining power.

Again, this is a divergence from the point I was trying to make, which was just that Union activity is not the cause of the general rise in wages. I agree with you though, that an employee's wages might not always reflect the actual level of productivity in all situations. Intervention in the market can cause distortions. It wasn't my intention to make that argument in my post though.

 

Averaged out thats the case. But the divide is widening, the poor are getting poorer

Lowering of unionism has meant more casual jobs, not a good thing in yhe long run for either tax revenue or society'as a whole

Theres always a balance there, unions for the little guy, free market for skilled

 

No name calling there, just stating the obvious. The dude thinks he's infallible From his name alone, it proves my point.

 

I heard that.:iagree:

 

ok, techinically not name calling, just insults that amount to name calling

 

Argggggggggghhhhhhhhhhhhhhhhhhhhhhh