In America labor unions have been lionized like no other organizations or movement, earning their own holiday, which is described by Wikipedia as:
“Labor Day in the United States of America is a public holiday celebrated on the first Monday in September. It honors the American labor movement and the power of collective action by laborers, who are essential for the workings of society.”
Do labor unions deserve any of their praise? Does the labor movement deserve its own holiday? The answer to both questions is a resounding no. I know these answers won’t make progressives and others on the political left happy but that is the truth. In today’s polarized political climate which is dominated by political correct thought police few offenses will be treated more harshly than shattering the falsehoods associated with labor unions. This is precisely what I’m doing with this article.
Labor unions are credited with all of the positive developments in our society such as the 40 hour work week, weekends, and living wages. Free market capitalism, not labor unions produced all of these positive benefits. This is documented in the article:
The article “Labor Unions are Anti-Labor” by the Mises Institute contains a treasure trove of information proving that labor unions do far more harm than good.
How many Americans mistakenly believe all of the positive press labor unions have received?
“Many Americans, perhaps a substantial majority, still believe that, irrespective of any problems they may have caused, labor unions are fundamentally an institution that exists in the vital self-interest of wage earners. Indeed, many believe that it is labor unions that stand between the average wage earner and a life of subsistence wages, exhausting hours of work, and horrific working conditions.”
What produces widespread economic gain?
“…the only thing that can explain a rise in real wages throughout the economic system is a fall in prices relative to wages. And the only thing that achieves this is an increase in production per worker. More production per worker — a higher productivity of labor — serves to increase the supply of goods and services produced relative to the supply of labor that produces them. In this way, it reduces prices relative to wages and thereby raises real wages and the general standard of living.”
The wage gains produced by unions are offset by inflation.
“What raises money wages throughout the economic system is not what is responsible for the rise in real wages. Increases in money wages are essentially the result just of the increase in the quantity of money and resulting increase in the overall volume of spending in the economic system. In the absence of a rising productivity of labor, the increase in money and spending would operate to raise prices by as much or more than it raised wages.”
Free market capitalism makes everything cheaper which raises everyone’s standard of living.
“With relatively minor exceptions, real wages throughout the economic system simply do not rise from the side of higher money wages. Essentially, they rise only from the side of a greater supply of goods and services relative to the supply of labor and thus from prices being lower relative to wages. The truth is that the means by which the standard of living of the individual wage earner and the individual businessman and capitalist is increased, and the means by which that of the average wage earner in the economic system is increased, are very different. For the individual, it is the earning of more money. For the average wage earner in the economic system, it is the payment of lower prices.”
Labor unions raise the wages of members by limiting the number of people employed in a given industry.
“…the efforts of labor unions to raise money wages are profoundly opposed to the goal of raising real wages and the standard of living. When the unions seek to raise the standard of living of their members by means of raising their money wages, their policy inevitably comes down to an attempt to make the labor of their members artificially scarce. That is their only means of raising the wages of their members. The unions do not have much actual power over the demand for labor. But they often achieve considerable power over the supply of labor. And their actual technique for raising wages is to make the supply of labor, at least in the particular industry or occupation that a given union is concerned with, as scarce as possible.”
Labor unions use many different tactics to limit the number of individuals employed.
“…unions attempt to gain control over entry into the labor market. They seek to impose apprenticeship programs, or to have licensing requirements imposed by the government. Such measures are for the purpose of holding down the supply of labor in the field and thereby enabling those fortunate enough to be admitted to it, to earn higher incomes.”
Labor unions raise the cost of hiring an individual beyond the market value which results in fewer being hired.
“Even when the unions do not succeed in directly reducing the supply of labor, the imposition of their above-market wage demands still has the effect of reducing the number of jobs offered in the field and thus the supply of labor in the field that is able to find work.”
More union workers in a given country will result in higher unemployment in that country.
“The artificial wage increases imposed by the labor unions result in unemployment when above-market wages are imposed throughout the economic system. This situation exists when it is possible for unions to be formed easily. If, as in the present-day United States, all that is required is for a majority of workers in an establishment to decide that they wish to be represented by a union, then the wages imposed by the unions will be effective even in the nonunion fields.”
Here is another article which contains very similar information.