Strengthening Constitutional Self-Government

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Economy

Union Chutzpah

Thomas Sowell, in writing about enduring misconceptions of labor unions as vehicles to empower otherwise marginalized workers, offers this insight into the M.O. of unions that has become both true and tragic:

To unions, workers are just the raw material used to create union power, just as iron ore is the raw material used by U.S. Steel and bauxite is the raw material used by the Aluminum Company of America.
Sowell here demonstrates how so much of what unions have bargained for has not been quite what workers thought they were bargaining for.  The important thing to remember about unions, Sowell argues, is that in themselves they don't create wealth.  However productive the individual members of a union may be in their own work for a company, the union--as a separate entity--is only in the business of "siphoning off" the wealth workers and management produce for a company.  Sowell notes that the reason private sector unions have been in decline in recent decades is because workers have seen the natural economic results of the long dominance of unions in various sectors of the economy.   Unemployment resulting from the bankruptcy of a worker's industry--which, in many cases, can be correlated to the rise of the union in that industry--turns out to be just as frightful to workers as unemployment resulting from the whims of management. 

So in the private sector, workers and management have finally come to a place (or, at any rate, are closer to that place) where they understand the inseparable link between their mutual interests. 

The movement away from unions in the public sector is much less likely to come, however.  It turns out, unfortunately, that public sector unions and the politicians who manage their affairs also have an inseparable set of mutual interests. The former have an interest in negotiating fat contracts and benefits while the latter have an interest in keeping this large constituency fat and happy--whatever they may ask. 

The (now familiar) problem in this scenario is that he management is NOT the politicians who make these deals but US; the tax-paying public.  We foot the bills for the contracts these two groups of our employees negotiate while they reap the benefits.  In theory, there is no limit to what they can ask or negotiate.   Where is the competition that could arise to overtake and humble this industry?

In the meantime, well-meaning and hard working teachers, fire-fighters, police officers and any number of other public sector workers--beholden as they often are to the unions--are still (as they rightly point out) paying taxes and functioning as equal and sovereign citizens of our great nation.  The time will come for them when they will have to decide whether or not the union that claims to represent their best interests is really doing what it claims on their behalf or if it is only taking what it can--without regard to the future well-being of its members, their children or the nation we all claim to love.

UPDATE:  I meant to include a link to this fine article by Peggy Noonan in Friday's WSJ that offers some useful reflections on the tone of union rhetoric and the ways in which it may be off-putting--even to union members.  This and Sowell's piece above ought to be required reading for Republican politicians who want to come out on the right side of this debate without making the mistake of seeming to be against the "little guy."  Who is the little guy anymore, anyway?

Categories > Economy

Discussions - 3 Comments

I don't think we are management in your scheme; I think we are shareholders. Unfortunately, we cannot invest somewhere else without leaving the country and changing our citizenship, or at least residence, place of work, and severing or straining many of the ties that bind. I think management does consist of our elected politicians in the executive and legislative branches. They have been negotiating badly and not representing our interests, conceding too much and that for many years. We are not willing to invest more in a company whose labor practices has put it into debt. We are not even particularly happy with the product. anymore.

Of course, any of us might get into management, but at a great cost, so we are reluctant to do it. And public employees are conflicted shareholders.

Unions want all of us to be workers or maybe worker/shareholders are best. I don't know what they'll do without shareholders, but they think we are all the rich, anyway. Maybe my analogy breaks down here.

I think we're both kinda right. We're more shareholders than management because we don't have much control over the actual management . . . but, in the minds of the unions, we're management in the sense that they think we're on a par with company owners--so far above their reality that we must have unlimited funds to supply their wants. And, in fact, we do rather own these "companies" and could begin to affect the management if only we would take the election of our board members more seriously.

If we are talking about the USA, who else owns the company? We are not privately held, that's for sure, although there are members of management who think they own the company whole and clear. We need to et rid of those guys.

Yes, we have to be very careful about who is in management and we have to remind the workers from time to time that they are also shareholders, despite what the unions tell them. They forget our mutual interests.

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