101 Comments

I have very similar feelings about Unions. In arguing against them I often think about their historical contingency. Like if you were starting today, without the history of unions would these be the best tools for equalizing the power of labor vs capital. The answer is almost certainly no.

So I think we need to offer a trade. No unions, but a few programs that help labor be more powerful. We get no fault unemployment insurance. you can quit your job and based on how much time you've worked you get unemployment. Second the governement will pay for you to move, up to 3 times as long as it's to a place with more opportunity. Third sometype of systemization of retirement and health benefits accross all employers. You set up your 401k, and just give you employer an account number like direct deposit, health has to be similar, no changes with jobs.

If just say unions are immoral, which they are, but don't deal with the power imbalance, rational folks will stick with the unions.

Expand full comment

Well put. Simply saying Unions bad without addressing the power imbalance between corporations and individual workers isn't going to win anyone over. The whole reason Unions arose is due to miserable working conditions and hours. There is much Unions have done to improve the lives of workers, which is why they have stuck around to this day, dispute the ethical issues Richard correctly points out

Expand full comment

Respectfully disagree. Saying the “whole reason” unions arose, would be like me saying the whole reason guilds arose in the Middle Ages was to protect the townspeople from shoddy artisans. At best, this is a side-effect, and more honestly, it is probably a shallow rationale for rent-seeking behavior.

There are countless employers, and hundreds of millions of employees. I have never joined a union, yet I found my employers to be quite competitive with their wages, working conditions and benefits. That is the way free markets tend to work. Wages and conditions improve with marginal productivity, thus workers benefit over time with increasing productivity.

Saying unions improved the lives of workers is probably correct in a limited degree, but that is because employee bargaining will improve workers lives as long as productivity increases over time. Collective bargaining is just one type of employee bargaining, but it is not the only type, and I would argue that history shows it has been the least effective and the most prone to negative side effects both for workers in general, and even union workers over the long haul.

Government backed unions are labor cartels, and like all cartels, are really about exploiting non members, which in this case is consumers, other prospective employees and investors. Unions raise wages about twenty percent over the market clearing rate, leading to capital fleeing to Right to work states, or overseas or replacing labor with technology. Thus unions price themselves long term out of the market, leading to abandoned rust belt towns.

Expand full comment

"I have never joined a union, yet I found my employers to be quite competitive with their wages, working conditions and benefits. "

That's because you were in some higher status quick growth stage industry (e.g. I.T.), but also because you benefit from over a century of union work demanding and achieving rights for employees...

The era when unions emerged and were established was like the dark ages for workers (child labor, no safety laws, mandated company stores, people paid in company money, unpaid overtime, employee thugs beating workers, and many other niceties).

Expand full comment

Nick, I was actually in a boring, old fashioned low growth industry.

I do not understand why you refuse to believe that wages and working conditions would, could and did improve based on competition among for workers. When you track wages properly adjusted for inflation and productivity, the two go hand in hand, and they do so in every reasonably free market state or nation, regardless of union repression.

Unions aren’t responsible for improved wages and conditions, prosperity is. Do you disagree with this statement, or just not understand it? As a check, are you able to voice the argument of how wages would naturally tend to rise with productivity based upon supply and demand? Are you not aware of how much better wages are in non union industries in right to work states where none of the gains are due to unions? Or is union bargaining some kind of magic dust that just drives wages up through the ether?

When unions emerged, they did in a world where employees were incomparably better than they had been a century earlier. Wages were higher, not lower when unions first emerged.

As for child labor, mandated company stores and employer violence, these are all things that were corrected by reasonable law, not by unions. The fact that unions may or may not have fought for these things doesn’t mean they were significantly responsible for their passing. I suppose they contributed, but so did millions of people living in right to work states who never have and never would join a rent seeking organization such as a union.

Expand full comment

> I do not understand why you refuse to believe that wages and working conditions would, could and did improve based on competition among for workers. When you track wages properly adjusted for inflation and productivity, the two go hand in hand

That's nowhere near true. Productivity has skyrocketed since the 70s but wages have remained stagnant, barely better than inflation (and regularly not even that). And that's even with all the tricks to downplay the real reduction in PPP in many areas through composite inflation indexes.

> Unions aren’t responsible for improved wages and conditions, prosperity is. Do you disagree with this statement, or just not understand it?

Disagree.

> Are you not aware of how much better wages are in non union industries in right to work states where none of the gains are due to unions?

Again, non-union industries with high worker demand - like I.T (itself propped by the huge influx of VC money to burn, based on cheap loaning "free money" schemes like Q.E. Ultimately the public pays its share for all the "innovation" of bullshit startups, and the rich guys get to keep the profits from 1 in 1000 success stories).

> When unions emerged, they did in a world where employees were incomparably better than they had been a century earlier. Wages were higher, not lower when unions first emerged.

The removal of child labor and slave labour (and later Jim Crow labor), plus expansion of US industry as European powers were exhausted and in decline due to WWI, explains that. Not some benevolence and willingness to share the fruits of higher productivity.

Much much fewer people in the late 18th/early 19th century (that's late 1700s/early 1800s) worked for mass employeers in industry and services in the US, compared to the start of the 20th century. Heck, at 1800 over half of the US didn't even exist.

What are we comparing, wages at the slavery, high aggricultural economy, and wild west era US versus those industrialized US at the time right before the emergence of unions?

Expand full comment
Aug 15·edited Aug 15

> like the dark ages

So… nonexistent and a pop-history myth?

Expand full comment

No, more like:

Very real, and a popular way for modern historians (not the brightest era for scholarship) to draw some attention to themselves and defend their era of study by "debunking" it as "pop history myth" while ignoring the very real and very heavy drop of organized state functions, infrastructure, quality of life, cultural output, and so on, for many centuries after the fall of Rome.

And of course the dark ages here are used metaphorically. So whatever you believe about them, you could open a few books and read for yourself what the conditions were like at the time. Instead you went for a cheap irrelevant response. Or do you think child labor, company thugs, company stores, no safety laws, and such, are a pop-culture myth?

Expand full comment

I think it's highly unlikely that companies would be able to pay in company money (scrip), because workers wouldn't accept it. But unions had nothing to do with the elimination of this practice -- it independently became illegal.

Expand full comment

Good points

Expand full comment

Unions have also tended to harm workers. But example, the aggressive tactics of unions explain why Detroit is now a fraction of its size from a few decades ago, and there is not so much of a U.S. steel industry. The unions simply priced themselves out of jobs.

At one time in did think that it was the power imbalance that created unions - but that doesn’t actually stand up to scrutiny.

Expand full comment

"explain why Detroit is now a fraction of its size from a few decades ago"

The insistence of automakers to making crappy cars compared to competition like Japan explains that a whole lot better...

Expand full comment

The work rules imposed by the UAW and the inability to terminate employees who failed to meet quality standards had a lot to do with the crappy cars.

Expand full comment

I very much doubt that, since the crappiness began with the very designs and models. Or they couldn't change designs too because of those pesky unions?

Expand full comment

Wages and working conditions steadily increased with productivity during the late 19th and early 20th Century -- wages went up in concert with the unfolding of the Industrial Revolution. This began before unions had any sway whatsoever.

It's true there is, in some sense, a "power imbalance" between workers and large employers. But just as business competes for consumers, business competes for workers. If Company A offers me a pittance, and Company B offers me a pittance + $1 and Company C offers a pittance +3, I as a worker can go to Company C. A company that fails to pay market wages won't get any workers and will fail. The same, of course, is true for consumers and companies. As a consumer, I can choose from several grocery stores. If, say, Wal-Mart offers bad products or bad prices, I can go to Food City. If I prefer quality over price, I can go to Whole Foods.

I don't actually think there's any reason to think that Unions have, one the whole, benefitted workers.

Expand full comment

Wages stopped tracking worker productivity in 1980 with the election of the anti-union Ronald Reagan. This is obvious if you look at a chart of the two trends.

Expand full comment

In regulated industries they have a role to play because the market is not totally free, and it can open the door for strongarming certain kinds of labour into unacceptable conditions.

With no better alternative, unions will have a place. These theoretical considerations still dont stand up to the simple fact that capital is inherently much stronger than labor and always will be. Capital also directly influences the political realm much stronger.

Expand full comment

> If just say unions are immoral, which they are, but don't deal with the power imbalance, rational folks will stick with the unions.

This tends to conflict with the fact that unions have dramatically declined. If you do nothing, rational people will abandon the unions, and we know that's the case because it's already happened.

Expand full comment

Ignoring the myriad of modern examples of firms moving heaven and earth to prevent and block unionization wherever it begins to rear its head.

Pretending we are in a perfect free market full of informed laborers that are bled dry by the negative externalities of oppressive unions is laughable.

Expand full comment

Dealing with the power imbalance requires understanding why it exists.

A free market requires at least a free flow of information and low barriers to entry. When a worker negotiates for a new job, he rarely knows what his abilities tend to command as a salary, but the company does. One way to address that would be to require all companies to post on a yearly basis, the actual compensation they paid each of their workers, and those worker's responsibilities.

They don't want to do that because they like having the power imbalance, and also because they fear that it would lead to their competitors conducting a raid of their best employees (which can only happen if they underpay).

The biggest "barrier to entry" for workers is that other potential employers have little visibility into their skill levels. This is the point of a job interview, but you don't even get to that point until a potential employer decides that your resume is sufficiently interesting.

Expand full comment

The biggest source of imbalance is workers need money more than the company needs the worker. The second biggest issue is the amount of jobs available to a worker in a given locality. Which is why there is a much lower imbalance for high end white collar workers. Who have savings and can move. Information is a much smaller issue. If your Starbucks workers will get unemployment if they quit after being mistreated they'll be treated and paid much better. No organizing required. If you live in a town with one factory but the government will pay for you to move to a city, you are much less dependent on that company.

Expand full comment

I think you underestimate how important workers are to a business. Companies hire specifically because they need the workers - and it costs them a lot if they have to replace them: recruiting and training aren't free.

Now this could well be true for cases of so-called "unskilled" workers, hired to do what pretty much anyone who can show up on time and take instructions can do, but even there, a responsible worker is worth a fair bit.

As to your second point, I can largely agree: if you live in an area where there are way more workers of a particular type than available jobs of that type, it is a problem. And yet, moving is still probably the best choice. It just means that you take apartments rather than buying a home until you have a secure livelihood.

But even here, information is essential. The book "Middletown" tells the story of a city in the early Twentieth Century and the lives of the workers. There were clearly many more workers than the businesses needed, so many poor people were underemployed. Then two "nearby" (as in, two states away) faced a worker shortage, so they contacted the local paper to put in want ads. But the business owners convinced the paper not to run them because they liked having a worker surplus, and they that many workers would have left to take those jobs if they knew about them.

Expand full comment

A rare miss from Richard here but a large one.

At macro level you just won’t find any theoretical or empirical support for unions making a big difference to living standards.

I work in a large organisation in Europe and I’d say about 2/3 of my colleagues are union members. Non-membership is not a big deal, and membership is a trivial 0.5% of salary. I’m a member and I don’t have any interest in picketing or striking nor does anyone but a small minority. I am interested in my own working conditions, however, which align pretty closely with the 95% of colleagues who like me will never be senior managers. Membership gives me an outlet to push for utterly tedious things like parking spaces and work-from-home rights, etc. I keep union leadership appraised of my gripes, which get an outsize weight as most union members don’t bother to complain. I’ve in the past volunteered on union committees - again tedious work but one that gave me an insight into how the organisation works in a way that has helped my career progression.

If there wasn’t a union someone would in fact invent one or something very similar like an elected workers’ council. Management likes having a union there (at least in theory) as they can at least claim they have consulted on matters.

Overall Richard just overstates the impact of unions. They’re just another NGO and have a pretty minimal impact on the world.

Expand full comment

Dead wrong they priced themselves out of auto industry ( Detroit access) teachers union is abominable bankrupting cities Illinois and california can’t pay the pensions and let’s talk about the abysmal graduation rates NYC / Ca/Chicago yet demand highest salaries increases

Expand full comment

Europeans are somehow unable to grasp that the reason US wages, employment and living conditions are much higher than Europe's is simply because of strong European labor unions, and government labor laws stifling economic freemarket growth

Expand full comment

I hear this sort of thing from Europeans a lot. I don't know enough to object but stories like Swedish unions vs. Telsa make me skeptical.

Maybe European unions are more chill because all the entrepreneurs move to the US.

Expand full comment

In Europe unions often don’t have much to do because things like working conditions and wage setting is much more regulated by government than in the US.

Expand full comment

This is all very well argued, but why pick on the "unions" (blue-collar workers) to the exclusion of the "professions" (glorified middle-class unions)?

Expand full comment

Could you elaborate? I am myself currently employed in IT (and quite well) but I've also become professionally adept as a welder, machinist, EMT, and truck driver, and not felt a strong drive to join a union of any sort. And as my comment somewhere else around here will reference, a close friend of mine has recently divorced himself from the local chapter of the Librarians Union (hardly a blue-collar field) that was threatening to induct him by force.

Are you saying that white collar work is inherently organized? That does not match my experiences at all. If anything, many white collar employees are strongly disinclined to even discuss wages, which tends to make them rather weak, from a bargaining perspective. I just spent a year making $20k less than a colleague, simply because we had never discussed the matter and I had no reference of scale with which to go to the contract manager.

On the flip side, when I was driving long haul flatbed cross country, I knew exactly what other people at my level were making (25% of the cartage fees the company charged) and they even published the top 25 paychecks in any given week. Which even for me may have been a step too far, but it definitely inspired people to understand what was possible, depending on what sort of loads they were moving, and with what celerity.

Expand full comment

>Are you saying that white collar work is inherently organized?

No, I’m saying that the so-called “professions” (physicians, lawyers, etc.) are really just types of unions and so the same criticisms that apply to unions apply to them. But, to be even clearer, I also think that unions/professions are fine as long as they are fully voluntary and contractual rather than politically (governmentally) imposed and privileged.

Expand full comment

Ahhhh, gotcha. OK, thanks for the clarification. I concur with that conclusion.

Expand full comment

I live in Canada where the medical association literally decides the yearly supply of doctors and threatens to withhold them if the government doesn't hike its pay. Very corrosive and a lot of the reason you have to wait so long in the ER or to see a specialist.

Expand full comment

Yes, it's a form of doublethink to hold that the "unions" are a problem but the "professions" only exist to mantain desirable standards.

Expand full comment

If one lives in California one sees union workers such as cops and firefighters earning mid six figures, but these people have blue collar work and demeanors.

Expand full comment

There is often an overlap in the incomes of the two categories.

Expand full comment

I wonder if other conservatives who are against unions ever stop to think that trad con social views are similar to union views. That is, constraining the freedom of individuals freedom around things like sex to raise the price. Aren't people who wish to add costs to short term mating to prevent a race to the bottom doing so in effect to form a union to control the price? Isn't punishing say "slutty women" similar to punishing scabs?

Expand full comment

I think there's a relevant counter-argument, in that tradcons discouraging women from being promiscuous often make their case by appealing to the woman's own self-interest. For example, I think most people would agree that being a single mother and/or having multiple children by different fathers is much more difficult than being a married mother with children by one man. Sexual promiscuity obviously opens you to up to greater risk of contracting an STD. Many modern tradcons go to great pains to warn women that sexual promiscuity will make them depressed, have poor self-esteem or otherwise make them miserable (with varying degrees of empirical basis for such a claim). Maybe you think these appeals are insincere or made in bad faith, but they are made.

By contrast, punishing scabs is the reverse: unions are accusing scabs of putting their own self-interest above the interests of the group, accepting an employment arrangement which the scab finds favourable, but which the group would prefer that you didn't take because it isn't in THEIR best interest.

Expand full comment

I have definitely heard examples of what you have described, but there are also plenty of instances of tradcons (and other people, like radical feminists) directly attacking promiscuous women as well. For example, accusing women who dress sexily of wanting "attention," because for apparently it is bad to get people to pay attention to you by doing stuff that they enjoy paying attention to. There's also a tendency to call non-promiscuous women "nice girls" or "good girls" and promiscuous women "naughty girls."

I have also definitely heard unions accusing scabs of being shortsighted and not understanding that supporting the union is in their long-term self-interest, even if scabbing is beneficial in the long run.

Expand full comment

These are examples of tradcons saying mean things to women, but does not qualify as government-backed coercion.

Expand full comment

I listed some explicit government coercion at another point in this thread:

-Laws prohibiting prostitution

- Laws restricting strip clubs and other sex work

- Laws restricting production and distribution of pornography

- Using Title IX in universities to set up kangaroo courts that favor the accuser in sexual assault cases; this has the effect of discouraging sexual promiscuity since people can't have sex without risks of false accusations.

- Banning or restricting the teaching of sex-ed in schools (Imagine if a carpenter's union tried to ban shop class because they were afraid the students might become scabs!)

Expand full comment

You'd have to explain how the government forces people to go along with this hypothetical union.

Expand full comment

I can think of a number of ways:

-Laws prohibiting prostitution

- Laws restricting strip clubs and other sex work

- Laws restricting production and distribution of pornography

- Using Title IX in universities to set up kangaroo courts that favor the accuser in sexual assault cases; this has the effect of discouraging sexual promiscuity since people can't have sex without risks of false accusations.

- Banning or restricting the teaching of sex-ed in schools (Imagine if a carpenter's union tried to ban shop class because they were afraid the students might become scabs!)

Expand full comment

Well, in some (and increasing) cases trad cons are seeking the government to do this. Does anyone at this point not get that anti-abortion belief is about controlling sexual behavior? That is, adding costs to short term mating in an effort to add cultural incentives to the tradeoffs of people who prefer early marriage, kids, etc.? If you are unconvinced, I suggest @Rob Kurzban’s book where the data is pretty clear that mating self interest is the strongest predictor of abortion (and anti-abortion) belief. Not religion, or life concerns or anything else like that. But even if the government isn’t doing it, is the government the only way people can sanction individual liberty? The government might not even be the most effective way to do so. My point is the principle is the same - that letting everyone do what they want in the proximity sense might harm everyone’s liberty in the ultimate sense. And I suspect the degree to which one is fine with that or not fine with that is based on what externality is the most emotionally available. In both the case of labor and social conservative beliefs, you have a collection action problem where freedom in the proximate sense might lead to less freedom in the ultimate sense. I don’t really have any strong feelings about this, but it seems clear that small “c” social conservatism is in some way deeply about self-interest in that one’s proximate self-interest, if everyone does it, is no longer in your self-interest.

Expand full comment

To conclude that the goal is controlling sexual behavior, you have to completely ignoring pretty much everything people who oppose abortion have said about it over the past couple of thousand years. The discussions are pretty consistently about the idea that killing an unborn child is tantamount to murder. Now many of the same people also want to set standards for sexual behavior, but that doesn't make the two the same thing. Yes, there is a strong correlation, because both are found very strongly among very religious folk (not necessarily among people who simply identify with a religion). Correlation does not prove causation.

But none of this has to do with the government making laws to privilege unions above those they wish to coerce.

Expand full comment

Self report isnt as good of evidence as predictive correlates given that people evolved for self-deception (to better deceive others - see Trivers) and that argumentation is meant to convince others. My observation also applies to the pro-choice side as well. Your likelihood of being pro-choice or anti-abortion is best predicted by your likelihood of needing one. And note most anti-abortion types carve out exemptions for every case not relevant to mate market incentives. I note conservatives tend to be skeptical of leftists moral justifications for policy positions when the self interest correlates are overt.

Expand full comment

> And note most anti-abortion types carve out exemptions for every case not relevant to mate market incentives.

Sorry, I don't follow this. If "most anti-abortion types" do so, you should be able to provide a half-dozen examples from around the religious spectrum to help me, right?

Expand full comment

And yes, it does have to do with the broader philosophical point about proximate freedom, when exercised broadly, actually undermining ultimate self interest - the moral intuition thst motivates both the moral logic of unions and the oral logic of small "c" conservative cultural norms. And if you haven't noticed, social conservatives absolutely wish to use the state to put a finger on the scale to restrict individual freedom around moral norms. Again, I get the argument and I think we are just faced with two competing but mutually compelling moral intuitions. It's pretty predictable I'd be pro-choice given my number of lifelong sex partners and my low participation in traditional institutions since I don't really need them. But I totally get how a woman whose best life is early marriage to a man who can support her would want to add costs to short term mating as it makes that life harder to attain. And it could be that without a critical mass of people leading that life there are downstream costs to everyone. But that is the same calculation as unions wanting a cartel to prevent scabs from pushing down everyone's wage. What you have to explain why pro-life belief tracks do well with anti-birth control beliefs and to "lifetime sexual partners" but not to war, death penalty, etc.

Expand full comment

No, it's not the same. I think you missed the key point of this article: that unions could not exist without the government intentionally distorting markets in their favor.

A pro-life belief is, by definition, opposed to anything that prevents a pregnancy from coming to term, and is closely correlated in Christian religious claims to the injunction to "be fruitful and multiply."

As far as I can tell from speaking with such folks, there is a lot more room to differ on other topics, including war and death penalties.

Expand full comment

Yeah I get that's the point but I'm more interested in our intuitions about when coercion to constrain individual freedom is and isn't considered ok and the similarities between the market regulatory left and the personal behavior regulatorysocial conservatives in understanding how freedom can undermine collective action that underwrites flourishing. And how the emotional and self-interest availability of the harms matters to the inconsistencies and that rational arguments are just pot hoc rationalizing those deeper intuitions. Lots of examples of freedoms people are happy to have constrained so long as they know that others will be constrained as well.

Expand full comment

> anti-abortion belief is about controlling sexual behavior

It’s about not killing babies.

Expand full comment

Minor point, but relating to Taff Vale - the Labour Party didn't come to power until the 20s. The reversal to Taff Vale was passed by a Liberal government, which was progressive for the time and had a degree of links to the trade union movement although not nearly as much as the Labour Party.

I think you can argue though that one of the reasons the Libs passed the reversal was to ward off the nascent ascendancy of Labour in former Liberal strongholds. Either way, this was at the time the most left wing government in British history.

Expand full comment
author

Thanks, corrected

Expand full comment

Aren't unions essentially labor monopolies, and as such shouldn't they be illegal?

Expand full comment

This is too much "market idealism".

Humans treat employment (or any other long term relationship) as more important than just "choice" by employer and employee.

Union, like PTA or alumni association, gave outlet to other long-term relationship.

Expand full comment

Excellent article. Hanania at his best.

Expand full comment

Interesting topic. I look forward to reading the rest of the series.

Expand full comment

This could become a book

Expand full comment

What a bunch of sophistic claptrap. Because there is always a surplus of labor, without unions, employment becomes a race to the bottom for workers. And I suppose you are also opposed to the minimum wage?

Expand full comment

There is NOT always a surplus of labor; if there were, nobody outside a union would ever make above the minimum wage.

There is, however, sometimes a surplus of a particular type of labor. For one reason or another, too many people chose to develop the same skills and now find themselves in a buyers' market. This has been happening for centuries, and in the middle ages led to the creation of guilds, whose purpose was to block competition. Unions are simply a modern version of the same thing.

Expand full comment

But labor isn't fungible and the costs of changing labor are considerable - it simply isn't always in the interests of the employer to find a lower hourly compensation if that leads to a sub-minimal level of quality or if churn is damaging to the business. I've lived and worked in both a Euro union economy and a US right-to-work state and I honestly detect no greater job security in the former than the latter. Granted that's just a sample size of one but union people seem to think employees are constantly looking to race to the bottom; outside the absolute lowest levels of employment this just isn't true. Good employers either operate at an equilibrium or even seek expansion, as my company is doing now. Were this not a right-to-work and at-will employment state we would be far more cautious about doing so.

Expand full comment

I don't see how history validates this view. Unions have been in decline for decades and there isn't a clear race to the bottom.

Expand full comment

> there isn't a clear race to the bottom.

Seriously?

Expand full comment

Do you have any responses beyond sophomoric incredulous sneering? Something involving "facts", "logic", or "competent rhetoric", perhaps?

Expand full comment

Do the comments I'm responding to deserve something better?

For example, is the idea that "unions have been in decline for decades and there isn't a clear race to the bottom" based on facts, logic, or "competent rhetoric" (sic)?

Here are some actual facts about wages since the decline of unions:

https://www.pewresearch.org/short-reads/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/

https://www.epi.org/publication/union-decline-lowers-wages-of-nonunion-workers-the-overlooked-reason-why-wages-are-stuck-and-inequality-is-growing/

https://www.epi.org/publication/charting-wage-stagnation/

Expand full comment

Which has absolutely nothing to do with the presence or lack of unions, and can instead be traced to a single event in 1971.

https://wtfhappenedin1971.com/

And that event, which had nothing to do with unions in any way, shape, or form, was Nixon fist-fucking the dollar by taking us off of even the remnant of the gold standard, leading to the situation we have now where folks on Wall Street just move things around, cut them up, trade them to each other, and siphon the increases in the money supply into their personal accounts, without actually generating any value. It's what has completely decoupled the US annual budget from reality, leading to the current $35T in national debt.

Expand full comment

> Seriously?

Seriously?

Expand full comment
Aug 15·edited Aug 15

> I suppose you are also opposed to the minimum wage?

I can't speak for the author, but as for me, yes. The actual minimum wage is "zero". Demand more than your labor can actually justify, and that's what you'll end up earning.

---

To turn it up a notch, do you seriously think that in a country of 350 million people, with economies ranging from "New York" to "New Mexico", a single federally set minimum wage could be anything other than a sick joke?

Expand full comment
Aug 15·edited Aug 15

> I suppose you are also opposed to the minimum wage?

Not him, but yes. It merely outlaws jobs that produce less than that wage. It bars the workers of those jobs from work altogether. It is compulsory unemployment.

Expand full comment

There isn't *always* a surplus of labor. I've lived in metro Boston for 40 years now and the McDonalds near me has *always* paid more than the minimum wage. I laughed when progressives started campaigning for a $15 minimum wage because the McDonalds on the highway near me had a banner up stating that as their starting wage.

Admittedly, for almost all of human history, there has been a surplus of labor, or the equivalent phenomenon in agrarian and foraging societies. Malthus was right about all the history he could see. But once a society is considerably urbanized and considerably industrialized, the birth rate drops a lot, and workers start becoming scarce. (Also, capitalists accumulate large amounts of capital, to the point that the returns on capital start declining. That was noted by Marx ... and also by Adam Smith.) So the U.S. doesn't have any serious surplus of labor but places like Bangladesh still do.

Of course, that means that clothes are cheap in the U.S. because they're made by labor in Bangladesh. But if you want to get a burger flipped in the U.S. you need a worker that is physically present in the U.S. (though perhaps not officially authorized) and those are not in surplus.

Expand full comment

The late 1940s and 1950s were a peak for union membership in the US. Not coincidentally, this period also saw the development of a strong middle class, as well as large government infrastructure projects like the highway system. Since then, the unionized percentage of the workforce has declined. Not coincidentally, while worker productivity has continued to rise, real wages have stagnated since 1980 with the election of the anti-union Ronald Reagan. Today, the middle class is barely distinguishable from the lower class as we approach gilded-age wealth disparities.

Opposing unions because they require "government coercion" is libertarian fantasy, like opposing "government coercion" in the production of food and medications on the grounds that government regulation is always bad and people should be free to buy poison if producers can fool them into thinking it's safe. The reason unions require government protection is because employers have an inherent advantage that is only balanced by collective bargaining.

The history of labor unions didn't start with "government coercion." We effectively had a libertarian system in the gilded age, where the only option workers had to improve their conditions was to strike, while physically defending themselves from company goons and scabs. The government stepped in to regulate employer-employee relationships as a way of imposing order. Imagining that we could go back to a peaceful period that never existed, when workers freely chose their employers and individually negotiated their pay and benefits is just libertarian fantasizing for something that has never existed anytime in human history.

Expand full comment

The case for a union is not that they raise wages, but that they can lower wages. Imma write a blog post on it, but the case for unions is that they socially optimal bargaining incentive compatible in cases of economic downturn.

Expand full comment

I think there are practical factors involved as well. The industries that were the center of "mid-stage industrialization" had huge economies of scale, and so they needed huge numbers of workers. (My memory is that there is an exit off one of the interstates in Gary, Indiana marked simply as "U. S. Steel Parking Lot 3".) When a business dominates the labor market of an area, the market breaks down in two ways. On short time scales, the business can arbitrarily lower wages as there aren't enough alternative employers. On longer time scales, the business has to get workers to move to the area while the workers are well aware of the first market failure. One exit from this is for the business to voluntarily restrict its freedom of action by empowering a union. The existence of the union then allows the business to tap a much wider labor market over the long run.

A similar thing seems to have happened with large factories in early-stage industrialization. The factory needed to get workers to move to the factory town, away from their safety net of relatives. Since there was no state-run welfare system, away from one's relatives, if one was sick or crippled, one might die of starvation. So the factory owners endowed charities (run by people who owed different allegiances than the factory owners!) to reduce this risk for workers they wanted to recruit.

Expand full comment

I was in a union for about 23 years, but that ended in 1995. I am now retired, but if I had it to do over again, I would opt out. There may have been a time that unions worked for the betterment of workers, but I doubt that is the case any longer.

Unions are like cults in that once you partner up with one, you lose your individuality. You would never want to go against your union brothers even if you disagreed with them. It all boils down to the same old tug of war. Company profits verses wages. You have to look at both sides.

True that the company does not exist to provide jobs. It exists to market products and services that earn an income for the owners. Then again, few companies can operate without employees.

Expand full comment

The hypothetical threat of a union is a critical deterrent to management abuse - if management crosses a threshold of poor behavior they know they'll have to incur costs associated with countering a unionization drive. The benefits of this implicit threat to non-union labor arguably outweigh any benefits to unionized labor, and a legal regime to support that threat is a necessary precondition for that threat to have teeth.

Second order effects are important and underdiscussed!

Expand full comment

Not sure that I agree. Many people quit their job because of what they perceive to be bad management. If that reaches a critical threshold, it threatens the entire business.

And it is not clear that union leaders know what good management is. Plus unions treat good managers and bad managers the same way.

Expand full comment