Wednesday, September 10, 2014

How unions could help the middle class

I'm in the middle of a book called, The End of Loser Liberalism, by Dean Baker. He has an interesting passage on unions as follows:
"Though labor law provides protections to workers and their unions, it
also constrains workers' power in important ways. For example, it is illegal to
organize or honor a secondary boycott. If the workers at a restaurant go on
strike and then arrange for the Teamsters to refuse to deliver food to honor
the strike, the restaurant can enlist the government to deliver injunctions and
impose fines against the Teamsters. If Teamsters officials ignore the injunction
(e.g., they don‟t tell their members that they cannot refuse to deliver food to
the restaurant), they can face imprisonment. This is not the free market; this
is the government intervening on behalf of employers."
Exactly. Why shouldn't people be able to organize peaceful protests such as boycotts and labor strikes, sick-ins and the like? Our laws are designed to give businesses the upper-hand in almost every interaction between worker and capital owner.  Business owners will tell us that they create jobs when they are unmolested by unions. Yet, as we have seen since 1980, if you give business an inch against, labor, they will take a mile.

There is something else our anti-union laws have helped to do, they have given rise to giant monopolies. When labor is captured, business is free to grow in power and size. Such power leads to a positive feedback loop for those who own capital. Bigger stock prices and dividends come at the expense of labor.

But if union power is restored, it can be an effective check on the power of businesses, big and small. If it is discovered that Apple is using slave labor for mining, manufacturing and sale of its products, a big enough union can put the brakes on that far faster than a do-nothing Congress ever will. In fact, it has been found that Apple is using slave labor, amassing enormous profits from it and sharing that profit not with their workers, but with the shareholders. But there is not enough union power to keep Apple in check.

Why does Apple need to use slave labor? They derive enormous rents from patents, copyrights and tax laws that favor capital over labor. Could it be that slave labor keeps prices low enough so that ordinary people, facing wages that have barely moved in 30 years, can afford their products? Oh, wait a minute, most people buy an iPhone on time rather than paying cash.

Want to see wages keep up with inflation? Bring the unions back. Power is in numbers, CEOs understand this, but most ordinary people do not. We've live for a long time without union power and now we're suffering for it.

A strong union-based labor market would help wages to keep up with inflation. A strong union labor market would have the political will and muscle to keep corporate power in check. Unions are a part of the free market, but you won't hear that from a Conservative Nanny State Congressperson or even conservative Democrats.
Post a Comment