Labor Rights, Addendum

Unions are under attack. This has always been the case and it seems it always will be. The threat is very real, and although efforts to derail unions have followed a trend of increasing subversives over the years, unions still face a very grave hostile sentiment today.The modern-day battle is primarily philosophical. It is a battle of minds, to recruit individuals into a particular belief system, the main versions of which either absolutely detest unions, or wholeheartedly support them. We must certainly battle against the detestation, since its core ideology disparages the basic human right behind unions and purports that unions are inherently corrupt. Each of these tenets is false and dangerous.We can be sure that the ultimate goal here is to eliminate unions. After all, what is the point of attacking unions, philosophically or otherwise, if not to tear them down completely? People who detest unions do not take time to polish them.Union “busting” is a colloquial term that describes this relentless effort to destroy unions. Although the phrase itself may be a bit passé, its meaning is alive and well today and is carried out at many different levels. The recently publicized union “crackdowns” by the state governments of Wisconsin and Ohio merely compliment the day-to-day abuse that unions receive at the hands of the private sector. Much of this abuse takes the form of closed-door dealings that further encourage union corruption. Taken alongside the continual condemnations in the public square, one can only use semantics to deny the reality of union busting today.That these busting efforts may even slightly erode labor rights demonstrates the parlous state in which unions currently find themselves. Fortunately, most advocates of union rights are not so short-sighted as to miss this. What may seem as trivial pestering now could lay the groundwork for outright busting of unions sometime in the future, in spite of current laws that are meant to protect unions.Of the philosophical arguments against unions, there is one that stands out as both frequent and effective. Almost all capitalists—including those from the self-described Keynesian, Chicago, and Austrian schools—claim that unions ultimately, and perhaps inadvertently, create situations that are unfavorable to labor. The tale goes like this:

If unions raise wage rates in a particular occupation or industry, they necessarily make the amount of employment available in that occupation or industry less than it otherwise would be—just as any higher price cuts down the amount purchased. The effect is an increased number of persons seeking other jobs, which forces down wages in other occupations.… Unions have therefore not only harmed the public at large and workers as a whole by distorting the use of labor; they have also made the incomes of the working class more unequal by reducing the opportunities available to the most disadvantaged workers.

That is Milton Friedman—perhaps the most popularly celebrated economist of the past fifty years—from his bestselling book Capitalism and Freedom. What he is basically saying is that if a company or industry seeks to spend x amount of dollars on labor, but a labor union demands a wage increase of y, then either lay-offs or lack of hiring will invariably occur in order to achieve x. In a capitalist economy, this may be the case. However, rarely when making this argument does anyone mention the elasticity of labor. One drawback to this equation is that it assumes x must remain a constant. This need not be the case. Furthermore, if the demands of labor unions force a company to spend x+y on labor, why is it so impossible for the company to recalculate labor costs to equal x+y, so as to benefit from maintaining the workforce and producing more?Of course, it is not impossible. Companies do not lay off workers or cease to hire new employees every time a wage increase is enacted. Some companies realize the value of well-paid workers that have job security and accordingly budget more for labor costs. Yes, it is true that harm comes to “the public at large” when companies downsize labor as a knee-jerk reaction to wage increases brought on by union bargaining. However, unions are not to blame for this. Why not blame those who choose to limit the amount of workers in the company or industry?Well, the solution is not to lay blame or discourage people from doing what they are naturally inclined to do: unions will always strive for higher wages, and companies will always try to keep operating costs at a minimum. The solution is to facilitate positive results of union bargaining. To master this technique, one must have the proper tools. By allowing the workers to have ownership in the means of production, a distributist economy finds itself well-equipped for the job. When workers take ownership in capital, they find themselves with an incentive to work more diligently, yielding higher profits that can help pay for the increase in wages. Imagine a system where adding more well-paid workers to a labor force is considered an investment long before it is considered a cost burden.Distributism offers a system where unions work hand-in-hand with their employers to achieve common goals.  This is opposed to the current system in which the two sides constantly fight, even though mainstream economists, such as Friedman in his aforementioned book, admit their fates appear to be intertwined:

The decline [of unions] does not reflect a decline within particular industries or occupations but rather a declining importance of those industries or occupations in which unions are strong relative to those in which unions are weak.

One obvious inference of this is that if the industry withers, so does the union. Less obvious is that a “weak” union is not necessarily an unsuccessful union. On the contrary, a union may only be “weak” because the current labor conditions do not call for a strong union. Could it therefore also be true that if a union withers, the industry or company may follow?  Successful companies and industries often boast well-compensated employees. On the other hand, servile economies are never successful, and a population of underpaid workers makes entrepreneurship less likely. One way or the other, unions and employers can benefit from looking out for each other.Society can benefit from this as well. Let us stop needlessly and futilely attacking unions. At the very least, accept their inevitable existence. Focusing reform efforts on preventing and policing union corruption is not only wise, but is our responsibility. Let us strive for economic solidarity by courageously investing first in labor—in human capital. All people, and especially all Catholics, are called to do these things.