Monday, January 19, 2009
Through much of American history, people -- especially on the left -- have loved unions. Sorry, I just can't understand that. It seems to me that the principal effect of unions is to confer monopoly wages on their workers, through a mechanism, the strike, which imposes high costs on innocent third parties, including nonunion workers.
My wife recently had one of the pictures I inherited from my parents reframed, and we discovered some newspapers from 1953 that had been in the back of the picture. The headline from the New York Daily Mirror read, "Milk Starts to Flow in Shops, Price Rise Due." The explanation was that a strike by the AFL dairy workers had just ended, with a wage increase. No milk for the little children -- just great.
It is also ironic that the story ran in the New York Daily Mirror, which would be out of business in less than a decade. It published for nearly 40 years, but it was killed by the 114 day New York newspaper strike in 1962. Wow, 114 days!
Most classical liberals assume that unions should be allowed, but the argument is quite a bit harder than people realize. If we prohibit horizontal price agreements by firms, then it is hard to understand why workers get to do the same thing. It is true that unions could provide some benefits, but if so employers would have an incentive to use them without the need for strikes. If unions are allowed under classical liberal principles, that would have to be under quite different legal regulations than the law now employs for unions.
Happily, for some time unions have only been powerful in the public sector. That, of course, does not mean they are harmless. When I was growing up in New York City, in 1968 the city teachers -- illegally -- went on strike for more than 7 weeks! I don't think we started going to school until November! (Those were the days of John Lindsey, not Ronald Reagan, and the teachers, unlike the air traffic controllers, were not fired.) In San Diego, the government employee union has essentially bankrupted the city with a corrupt pension deal. And now, of course, California looks to be moving in the same direction, in part due to government employee unions.
Still, restricting unions to the public sector is helpful. But sadly if our President has his way, that won't be the case.