Amerika

How Unions Destroy Industries

In the West, we were so deeply subverted by Leftist thought that our highest virtue is being a worker, which we express through endless praise of “working hard” and politicians who “create jobs.” Part of this is merely our dependency on paychecks in order to pay off the many costs of living in a civilization dedicated to subsidizing the weaker. The rest is pure dogma.

As a result, we are all expected to stand up and clap whenever a union appears, whether in our police departments or automakers, instead of expressing the realistic opinion that unions make jobs miserable and ineffective, are always linked with organized crime and Leftist politics, guarantee offshoring, and eventually cause whole industries to disappear.

Our media overlords expect us to choke down the realization that it is cheaper to manufacture virtually everything abroad and import it here as a consequence of “lower wages,” while not explaining that most companies would prefer to stay here and have a much simpler supply chain. To our society, it is just coincidence and an accident of history that imports are cheaper.

In part, they are correct: labor in foreign lands is cheaper. But when you add up all of the transportation and administrative costs, it is not that much cheaper, so why do they do it? For one thing, foreign lands do not have unions, which avoids a host of legal problems as well as raised cost that does not go to the worker.

When a union gets into a shop, the first thing it does is create inflexible rules. These many strictures tie down the manufacturer and give the worker what are perceived of as rights, but are really obstructions to doing a job fully and correctly because it is subdivided into so many tasks. This means that their only chance for promotion is through the system established by the union.

In addition, this division of roles introduces many inefficiencies and a vast amount of waste, as now what must be coordinated is not individuals who can adapt, but inflexible roles. Further, the rules — in the name of being fair to the business — create a demi-legal system by which individuals who do not toe the line and conform to strict rules of behavior risk their jobs.

At this point, the business resembles a hybrid of capitalism and communism. The union essentially becomes a labor contractor with whom the business negotiates prices, with the union holding all of the cards because it can shut down production (and for some time in the West, has had legal protection in doing so). The reign of the prole manifests itself.

Union shops offer workers many ways of demanding more from their employers but with each one, most of the money expended goes to the union, bureaucrats in management, and lawyers. Not only that, it makes the jobs mind-numbingly specialized and simplified, which turns the workplace into something more like a jail sentence than an opportunity to shine. This drives away the competent, retaining the rest.

The collective bargaining approach of unions also serves to limit high-performance workers, who would have been promoted anyway, while raising the average because they receive the same benefits as everyone else in the collective. The additional rules restrain the inspired, and make labor into a bulk quantity, further increasing the tedium and repetition of jobs.

While unions are popular with workers, this presents a problem because the workers — by definition — are unaware of the business requirements for the place at which they work, and are prone only to see the negative and want as much lassitude as possible. That not only makes jobs boring, and limits their ability to compete, but tends to shut down businesses.

If you run a business in a specialized industry, and are forced to unionize your labor, you have now acquired parasites in the form of lawyers, union bureaucrats, and more middle management. These are dead losses into which money is thrown and nothing is returned except the promise of some respite from the union, which may shut down production anyway.

Since most businesses operate with relatively thin margins and on a month-to-month basis, shutdowns threaten the existence of the business itself. To stave it off, they acquire investors, which slowly transfers ownership from local families to investors in the big cities. This in turn encourages the cutting of unnecessary costs in order to increase value, and here the workers lose.

Looking at labor costs, and shutdown costs, companies opt to outsource, close plants, or simply move the business offshore in order to survive without getting taken over by investors or facing shareholder revolt. When one company in an industry does this, others follow suit. Some even adopt the new American model, building parts overseas for assembly here.

If they could, most companies would rely on domestic labor and reward only those workers who showed the power to rise above the rest. This in fact benefits the workers, as it means that there are higher rewards for doing well; the union smooths out this process, so that the rewards are smaller — that excess goes to the union, of course — and the risks are lower, promoting incompetence across the board.

Unions are acclaimed as good by most people in our country. However, any time that “everybody” agrees on something, it usually means they are projecting their hopes rather than their beliefs, and are doing so to conceal a downside that no one knows what to do with. In the case of unions, the downside is that all this “free” stuff comes at a cost, and that unions were not needed in the first place, at least for the competent workers.

When a union takes over a shop, it quickly becomes a bully. It is no wonder that all unions seem to have connections with organized crime. They bully the business, and they bully any workers who rise above the minimum standard. As always with humanity, The Human Problem rears its ugly head, and what “most” want wins out over quality, which then reduces future prospects for all.

From a leadership perspective, it never makes sense to allow the lower to rule the higher, and workers are low on the totem pole for a reason: they cannot do what those above them can do. As a result, the tail wags the dog, the cart comes before the horse, and the business becomes dedicated to its workers instead of performance.

This has an ugly ripple effect in that it not only drives away competent workers, but also drives away competent management. To a leader, legally-protected unions represent in intractable problem, and so they flee to industries without a fatal flaw, leaving behind those of a bureaucratic disposition who are happy to stamp triplicate forms all day and have no ambition to improve the products or services produced by the company.

We hear many sob stories about how long ago, workers faced difficult hours, injuries on the job, and tyrannical bosses. A presumption of innocence, however, is as bad as a presumption of guilt, and we have to ask ourselves how much of this was the result of the worker simply screwing up, since we know that most humans are screwing up most of the time.

Even more, it neglects the obvious nature of market forces: workers who deliver performance can negotiate for higher salaries, while those who have no such utility must rely on collective bargaining, fully aware that this will weaken the company, damage the industry and pass on costs to consumers. No presumption of innocence should be assumed there.

Most Americans are familiar with the media trope of cruel bosses and brave unions opposing them, such to the point that it is a cliché acted out regularly in our media. On the other hand, we have to ask why so few of our native industries remain around, and why those that do seem to be concentrated in the hands of monopolists who can afford to pay off the unions. Unions are entropy.

In recent news, journalists — who should know from covering both sides of the story that unions are not a universal good — found themselves facing a boss unwilling to pay the union tax:

A billionaire’s decision last week to shutter the news sites Gothamist and DNAInfo, just a week after employees voted to unionise, seemed to mark another low for unions in online media age.

Owner Joe Ricketts seemed to be making good on threats to pull the plug on his publications if workers joined a union. But in a public statement, Ricketts – a Donald Trump backer and founder of the discount stock brokerage TD Ameritrade – said the decision was purely financial.

The company, he said, “is, at the end of the day, a business, and businesses need to be economically successful if they are to endure”.

His statement is honest. A union shop will raise his costs, force bloat of the staff, and deliver lower results. Many businesses that are viable without unions become impossible with the unions, and so instead of signing up to dump his funds into a dying firm for a few years before having to pull the plug, he opted to spend the money elsewhere.

Not surprisingly, this investor is fully aware of the destructive nature of unions:

In a blog post last month, Ricketts argued that unions “promote a corrosive us-against-them dynamic that destroys the esprit de corps businesses need to succeed” that “makes no sense … where an entrepreneur is staking his capital on a business that is providing jobs and promoting innovation”.

The original post elaborates more on the vital problem he sees with unions, which is that they create a divided power structure, where there is an internal gang opposed to leadership, and therefore infighting accelerates, but more importantly, focus on actual productivity and business competition decreases:

I know that businesses constantly face a barrage of obstacles to survival – never mind success – and, in the face of that, everyone at the company needs to be pulling together or that company won’t make it. I know that keeping a company growing and thriving requires focus and tireless effort by everyone. Indeed, in my opinion, the essential esprit de corps that every successful company needs can’t exist when employees and ownership see themselves as being on opposite ends of a seesaw. Everyone at a company – owners and employees alike – need to be sitting on the same end of the seesaw because the world is sitting on the other end.

Following his notions, we can see how when a union enters a business, the goal shifts from an external goal — making a competitive product or service — to an internal goal, which is negotiating the most possible from the business. Under this burden, there is no unity, and instead, people are afraid to trust and work with each other because of the infighting.

As Ricketts notes, the union latches on like a parasite, and serves to drain from a business striving toward purpose:

That’s why the type of company that interests me is one where ownership and the employees are truly in it together, without interference from a third-party union that has its own agenda and priorities.

As if to confirm that they are bad actors, representatives of the unions attempted to separate business decisions from the question of unionization:

“Ricketts and his minions have made ugly statements that suggest unionization led to the shut-down,” Peterson said. “At the same time they’re hinting that they couldn’t figure out how to make a profit on local news.”

This fellow seems confused. He told a business owner that for the business to proceed, labor costs would have to radically increase and a new power structure with zero interest in seeing the business succeed would have to be incorporated. Ricketts was telling the truth both about unions and this being a financial decision; he realized that with this added cost and loss of focus, the business could not survive, so he shut it down rather than sending more money into an ever-widening pit.

As with most things in humanity, business is a competition between the competent few and the incompetent “me toos” who want a share of the proceeds without being able to contribute to generating those. A successful civilization, like a successful business, finds a way to put the competent in power and limit the power of the rest. Either the best oppress the rest, or the rest oppress the best.

Jobs are horrible and people work too many hours, but unions helped make this possible by ensuring that thriving businesses fail, good workers do not get rewarded enough, and that intricate labyrinths of rules and unnecessary divisions of labor would make jobs tedious and hateful. As usual, human “good intentions” — or wishful thinking — doom whatever they touch.

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