I kind of got out of the habit of writing this blog and took a "brief" 3-year break. The recent election, however, has jolted me back into a blogging mood. As has the following item from the news:
The Twinkie is no more... along with Ding-Dongs, Ho-Ho's... and we have the Bakery, Confectionery, Tobacco Workers and Grain Millers Union to thank for it. Hostess has apparently been struggling financially for several years, according to a story in the NY Times, but it was done in by a Union strike that crippled 2/3 of its factories. The workers were presumably striking for better pay. Now they, and the rest of Hostess's 18,500 employees have no pay. Nice job.
This underscores why I believe Unions are a detriment, not only to employers, but to the workers whom they claim to represent. Labor unions began in the late 1800's in order to protect workers from poor working conditions and to ensure that workers were paid a fair wage. At this time, the nation had a very different economy from what we have now: the U.S. had just transitioned from an agrarian economy to an industrial one; family farms went the way of the dinosaur, for the most part, and, with many towns being one-mill towns, laborers only had one choice of where to work to put food on the table. In this environment (the economic term is monopsony), the employer had no incentive to create a welcoming (or in many cases, safe) work environment, or to pay workers decent wages, because the workers had no other choice than to work at the mill or face destitution. In other words, workers had no bargaining power; the employer offered the wage and terms of employment, and the worker took it. In this environment, the organization of labor into unions made sense; it provided workers with the bargaining power that they did not have on their own, allowing them to demand higher wages and better conditions. Unions were, at their inception, very much a functioning of the free market. Government did have to intervene insofar as having to remove legal barriers to organization under antitrust laws, and to require employers to allow their workers the freedom to organize.
More than a century later, we do not face anything closely resembling the monopsonistic work environment that our great-great grandparents faced. Factories are cleaner and safer, wages are higher, and benefits are better. A number of factors have contributed to this, including government safety regulations, but, particularly in the area of wages, the biggest driver has been competition between employers for workers. No longer, except possibly in some isolated rural areas, do single mills command the entire workforce. Modern transportation allows workers to commute to other towns for work, and multiple employers are in any given town, giving the workers expanded choices about where to work. While it is not perfect -- unskilled workers working for large employers do sometimes face unfair treatment -- it is far better than the newly-industrialized world of the 1890's.
In this world, unions become anachronistic. Union leadership garnishes workers' wages to pay their own salaries and to support politicians who protect their power. They force wage rates above the market rate, which creates higher unemployment (supply and demand in the labor market works the same as in the market for bread and milk: if the price of bread goes up, you buy less bread; if the price of labor (wages) goes up, companies hire less workers). Rigid work rules that were once designed to prevent exploitation of workers now only serve to reduce efficiency, resulting in higher production costs and therefore higher prices for consumers, and, in the case of public-sector unions, tax rates. Multi-year labor contracts restrict the ability of employers to react to changes in economic conditions, increasing the probability of bankruptcy. And strikes, as in the case of Hostess, sometimes only succeed in forcing the employer out of business, leaving the workers that the union claimed to be protecting unemployed, not to even mention the ripple effects that plant closures have on regional economies. And, of course, all of the cupcakes that people won't get to enjoy...
So (unless another company buys up Hostess's production line), the next time you start craving a Twinkie only to realize that they don't exist anymore, thank a labor union.
No comments:
Post a Comment