Date Written: 3/14/2023
Questions: 1) Evaluate this statement: “All workers have benefited from the existence of labor unions.”2) Evaluate this statement: “Government must intervene in the economy to bring about improved working conditions.
Today many people believe that labor unions are a wonderful thing. Supposedly labor unions are the only thing that prevents all the helpless workers from being exploited by the evil business owners. But, once again, this is another government promoted fallacy. In fact, workers don’t need labor unions to protect them. Improvements in the lives of workers came about through the free-market, not labor unions.
Labor unions are often given credit for the increase in leisure time, the improvements in working conditions, and the higher wages that workers receive today. However, labor unions had nothing to do with these things. As businesses invest in capital laborers become more productive, so less labor is required to to the same things. As a result, competition became more intense, so many employers competed for the best employees by offering shorter hours and/or higher wages. Over time this process has improved the lives of workers. Labor unions only hamper this process by advocating for legislation that penalize businesses, therefore it slows down the process that improves the lives of workers. (Click here to learn more about how the free-market raises the standard of living).
Labor unions not only harm workers by penalizing businesses, but they also harm non-union workers. If unions get their way, then they will force businesses to raise the wages for union members. When wages are artificially raised like this, employers can no longer afford to hire as many workers. So, there are some workers that are forced out of their job and must seek an unskilled job elsewhere. With all the new displaced workers other industries get “watered down” and wages there fall. So the claim that labor unions benefit all workers is definitely false. Labor unions displace some workers and force them into lower industries.
Labor unions also promote laziness among workers. Instead of working hard to earn a higher wage laborers only need to complain to their labor union. If enough workers do this, then the labor union can organize a strike and force a business to give the laborers more money even though they didn’t earn it. Therefore, the workers can basically be as lazy as they want because the labor union will always be there to coerce businesses into paying higher wages.
How Labor Unions Get Things Done
Labor unions also use immoral means to obtain their ends. They will force businesses to obey their demands by organizing strikes or threatening to do so. Most people think strikes are a fundamental right of workers, but they are no such thing. Strikes are when a group of workers all walk out on their jobs and stop working. This part of the strike is totally fine. Everyone has the right to quit their job if they want to.
But there is more to a strike then just multiple people quitting their jobs. After they have walked out on their job, these strikers will block the entrance to the business and prevent any potential new employees or customers from entering. If anyone tries to get past the strikers, then they will often use violence to stop them. And they don’t just push and shove. Many times strikers will carry knives and stab people. They also will throw bricks to shatter the windows of the business. They use lines of broken glass to keep people away too. The strikers are no better then an angry mob and for some reason the legal system does nothing to stop this lawless behavior.
All of these actions violate the right of property of the business owner. The strikers have no right to damage his property or decide who has access to his property. The strikers also have no right to harm anyone that tries to enter the business. This violates their right to life. These actions are completely immoral. What is even more absurd, is that when the strike is over the business is supposed to rehire the strikers that just terrorized them.
In conclusion labor unions do not benefit workers to a great extent. They indirectly harm workers by advocating for anti-business laws. Remember businesses are what raise the standard of living. They also displace many workers and incentivize the ones that remain to be lazy. Plus they use immoral violent means to achieve their goals. Labor unions are not the saints that everyone thinks they are.
What Improves Working Conditions
Let’s take a closer look at one thing that labor unions and government intervention are thought to be the most needed for: the improvement of working conditions. Like everything else, the free-market handles this better too.
It’s obvious that employers have the incentive to provide basic workplace improvements like electric lighting. If they didn’t provide basic improvements they would be constantly plagued by employee accidents and this would severely hamper the efficiency of the business. But what about improvements that don’t directly impact the efficiency of the business like air conditioning? Is government regulation necessary to coerce businesses into installing air conditioning? The short answer is no.
When air conditioning was first invented it was obviously very expensive because it was new and inefficient. Despite this a handful of business will opt to install air conditioning to make there business more incentivizing for workers to work at. In return for the air conditioning, the business might offer slightly lower wages to the employees. Employees that value a little workplace comfort more than the little bit of extra money will choose to work there. All the businesses that didn’t install air conditioning will now have to pay their employees a compensating differential. (A compensating differential is an increased amount in the wages of the employees to compensate for some negative thing)
Over time, as the free-market raises the standard of living and real wages, more business will decide to install air conditioning. This happens for two reasons. Reason one: As time goes on, there will be improvements in the design and efficiency of both the air conditioning units and air conditioning manufacturing. Therefore air conditioning becomes cheaper and more businesses are willing to install it. Reason two: As real wages rise, more laborers are willing to sacrifice a small amount of income for the increased workplace comfort of the air conditioning. So any businesses that still refuse to install air conditioning will have to pay a huge compensating differential to attract any employees to their business. It then becomes cheaper to simply install air conditioning than to pay employees the compensating differential.
This process is how the free-market tends towards the improvement in working conditions. I used air conditioning in the example above, but this process is the same for all workplace improvements. But what happens when the government does intervene and impose regulations to improve working conditions?
What Happens When Government Intervenes
Let’s consider what would happen when a government imposes a regulation that requires businesses to install air conditioning. The only countries that would “need” this regulation are the poor third world countries; all the richer western countries already have air conditioned workplaces because of their relatively free economies.
In these poorer countries, if businesses are required to install air conditioning, then many people will lose their jobs or receive lower incomes. Some business will simply go under because they can’t afford to install it, so some people lose their jobs. Most businesses will be able to afford it, but only by lowering the wages of their employees and probably laying off some to. The workers living in these poor countries need every fraction of money they can get. With even a small reduction in their incomes many people could starve. These people are willing to sacrifice the comfort of air conditioning in order to earn more money. All government regulation does is interfere with these people’s decisions and in many cases makes them lose their job and starve.
Well said.