Amerika

Why The World Abandoned Unions

Most people view the world in terms of their own dinner plate. That is, what comes their way is good, and what does not is bad; they are oblivious to consequences beyond themselves, such as if what could be on their dinner plate needs to go somewhere else to perpetuate what ultimately fills the plate.

When conservatives say that people are self-interested, they mean in part that people are only aware of what responds to their needs and desires. They are less aware of what happens far away, whether in physical space or a chain of events, and so they can be swayed with what is immediate.

The immediate must be short-term, tangible, material, and directed at them or someone like them. People show remarkable ability to project themselves into any other individual and thus to defend the point of view of that individual.

For this reason, humans are hard-wired to like unions. They imagine themselves as miners earning a pittance a dance and wish for an all-powerful union to step in, punch that boss on the chin, and hand them more free money.

Even worse, they believe the selectivity of stories told by miners and media alike. They will tell you the set of facts that benefits the argument for their demands, but leave out other things or choose not to report on them. We see a very one-sided view, even from those who are trying to be “objective.”

It is worth, however, looking at the history of unions. They rose in the early part of the twentieth century, took a break during the Great Depression and second world war, but then became active in the postwar prosperity. During this time, America rose to industrial prominence.

The reason for this was not hard to see: every other European country had been devastated by warfare, specifically heavy bombing, to the point where they were impoverished and lacked even basic factories. Others, like the UK, had trouble managing their economies in the postwar period.

As America grew wealthier, its unions grew more powerful. As one fawning account claims, unions made us all more prosperous:

Timothy Noah, in his 2012 book “The Great Divergence,” wrote that incomes in the U.S. were their least unequal between 1944 and 1977 — which also happened to be the golden age of unions. Steelworkers, autoworkers and manufacturing employees of all sorts made good middle-class incomes, with generous pensions and benefits. They got regular raises. But the main reason is that they were unionized. They negotiated with company executives who always knew that if the negotiations failed, the threat of a strike loomed. That was leverage.

According to Krueger, a quarter of the work force in 1980 belonged to unions. The next year, Ronald Reagan fired the 11,359 air-traffic controllers who had gone on strike; in so doing, he ushered in an era in which companies, the government and the courts robbed unions of most of their power.

Government rules and Supreme Court rulings have made it harder to unionize a plant, and easier to fire union organizers. Companies like Toyota Motor Corp. have put factories in the anti-union South instead of Detroit. Other companies have moved manufacturing overseas, leading to job losses for unionized workers in the U.S. Boeing Co. has long had a unionized workforce in Seattle.

Economics tells us some things about unions. First, they raise costs; these are passed on to consumers, since businesses have to maintain their margins or face shareholder revolt. Second, these additional costs provide zero additional benefit to the company involved.

Unions also provide a collective subsidy through collective bargaining that eventually drives away jobs and leaves a place where people are stranded by lack of opportunity. Before that happens, they reduce quality and bring in organized crime. No one wins with a union. They take prosperous towns and turn them into wastelands.

Not surprisingly, what killed the unions was competition. Leftism fears non-participants; that is, if you refuse to join the Leftist mob/clique/gang/cult, you are seen as rejecting them through rejecting their ideas, because since their notion of equality is Utopian and total, anyone who fails to join in has effectively denied them and become an enemy. Similarly, unions fear anyone who refuses to get onboard because if an alternative exists, it will be more effective and competitive, and the market will favor it.

Some data suggests that unions died because they could not take the South and so companies simply moved there:

“If there’s any one moment that set the stage for later developments, I think it was that failure in the post-war years to continue the union growth that happened in the ’30s and during the war,” McCartin says. “Once there became a region of the country that wasn’t unionized, it became a lot harder. When you compare us to France or Germany, there wasn’t really a region of one of those countries where unions were just totally frozen out. The union movement was geographically hemmed in in this country—that turned out to be really, really costly.”

With a non-union option present, unions faced a dilemma: if they pushed too hard, industry would simply move to non-union areas. They already saw that offshoring was becoming more influential as businesses found it acceptable to escape adversarial and parasitic labor groups and go to places where their offers of employment were accepted as a leg up.

In Europe, unions have been integrated into the legal way of doing business. They fade into the high costs of the regulatory state, and Europe is able to trade on the presumed quality of its products worldwide and demand higher costs. However this is fracturing at home.

The “yellow vests” protests see the consumer realizing that costs have been passed on to him. Unions, regulations, taxes, lawsuits, the hiring of bureaucrats and consultants to navigate the EU rules, and the resulting flakiness of entitled workers are all costs that business passes to consumers.

It has to. Its other option is going out of business. This is why unions drove companies to the South or overseas, and why most major European companies now maintain an Asian presence. Even as salaries rise in Asia, the lack of union activity on par with the West means that companies find manufacturing there to be preferable.

In turn, within the West, a boom in consultants and outsourcing has reduced employee count for many firms. The fewer employees, the less likely a union is to occur or be active, and so many companies now consist of an office with a half-dozen people who spread money to suppliers and branded products to customers. Anything else is outsourced, offshored, or handled by consultants.

If the West continues down its path, the “yellow vests” will see all of their jobs go to China. Government will buy them off by promising benefits that it cannot afford and will later cut or make impossible to acquire through a maze of bureaucracy. In the end, the cost goes to the little guy, as usual.

Humans may yet learn that the problem with our self-interested and individualistic viewpoint is that what fills our dinner plate consists of a long chain of events. If we interfere with this chain, eventually the impact reaches our dinner plate, even if it takes decades to do so.

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