Unions are an Outdated Concept

December 14, 2020

My Dear Reader,

With the recent news regarding UAW corruption and potential Federal involvement or takeover, I believe that now is the time to reexamine the necessity of unionized labor and how much it actually helps the working man. The concept of unionized labor is a holdover from the birth of the industrial revolution in the late early 19th century. Because labor laws had not yet caught up with the new technologies of the day, labor was cheap, arduous, and in some cases deadly. Much like the slave wages of the poor workers of the Chinese Government today, European laborers needed to organize strikes and argue as one body in order to gain leverage in wage disputes and increases. Around the turn of the century, and unsurprisingly coinciding with the rise of representative government, unionized labor was able to secure many benefits for workers including a limited workday and political power to enforce a minimum wage. With support from leftist political parties, the power of the unions grew steadily throughout the early 20th century. Unfortunately, this is when corruption began to help the union more so than the workers themselves.

Notoriously, large unions were infiltrated by the Italian mafia in order to influence contracts and demand inflated expenses in order to line the pockets of the mafia and the union heads. Union elections and advocacy shifted from what was needed by the workforce and instead used to bolster the power of the union as a bargaining tool and political machine. Throughout the 1970s and up until now, unions have acted in the interest of politics and platitudes while delivering little benefit to those that they serve.
When America used to build her own automobiles, they were constructed in the Michigan city known as Detroit. Rubber would be shipped in from Ohio along rail lines that were constructed with Pennsylvania iron and steel. This created separate and unique economies in different northeastern and Midwestern cities and states. Because of the availability of labor jobs that did not require a college degree, many families could be supported by a single income and live in a relatively safe neighborhood. But the factory owners and those who were wealthiest typically lived in neighborhoods that were much more noticeably well-off. This is of itself did not create resentment among the American public, but it did add a new wrinkle to the urban American political game. Crafty Politicians of the early 1960s began to run on the platform that the companies and those at the top of the factory food chain were making too much and taking too much from those at the bottom. A similar philosophy to the Rousseauian angle we examined in our first book. By 1961, Detroit had elected its first mayor whose campaign was almost exclusively a campaign for Rousseauian high taxation rates. The plan was to use the money collected from increased tax rates on the wealthy to fund schools and education as well as road networks and welfare programs for the city. By the mid-1970s taxation on not only the wealthiest but the corporate structures within the cities had become too high, which caused a rise in production costs and selling price. Given the rapid Globalization of the time, larger car companies like Ford, GM, and Chrysler decided to divest and decentralize from Detroit. An interesting book from 2004 titled “From Motor City to Motor Metropolis: How the Automobile Industry Reshaped Urban America” explained the exact problem very concisely:

“This [union power] led Ford to be concerned about the vulnerability of its huge, flagship Rouge River plant to labor unrest. The workers at this plant were “among the industry’s most well-organized, racially and ethnically diverse, and militant.” A strike at this key plant could bring the company’s manufacturing operations as a whole to a halt. Ford therefore decentralized operations from this plant, to soften union power (and to introduce new technologies in new plants, and expand to new markets). Ford often built up parallel production facilities, making the same products, so that the effect of a strike at any one facility would be lessened. The results for the River Rouge plant are striking. From its peak labor force of 90,000 around 1930, the number of workers there declined to 30,000 by 1960 and only about 6,000 by 1990.”

Despite the obvious decline of industrial jobs and the state of these cities in the modern era, unions still ask for dues and politicians still ask for their support. According to the linked Fox Business article,
“An independent monitor will help root out corruption in the United Auto Workers union and members will decide if they will vote directly on the union’s leadership under a reform agreement with the U.S. Attorney’s office.” But the problem still remains in that the government is not infallible so long as they have a potential for political gain. If we want both corporations and their employees to be free to work, we must examine how we protect their labor without driving work away. Furthermore, it would be prudent to damage or remove their political power to erase the current handwashing between the public and private sectors.

To your Creation and Potential,

Kevin Prendiville