CCQ 8 Is There a Place For Unions?

Broadstairs asks

What is the place for Unions in a free (and capitalist )society?

I’d better make sure it is clear that I am not speaking for ACT here. We had at least one full-time union official on our candidate list in 2005 and I know several other ACT members with union sympathies. Many ACT members are from “working class” backgrounds and some of the old worker/boss or “so called “social justice” mentality still lingers with some.

So you may guess my leanings. Unions do have a place-in history books.

So what is a union? A union is a group of workers who band together to use their collective strength to gain certain advantages that they might not otherwise be able to enjoy.

Now replace the word worker with diamond miners, oil producers or businessmen and what do you have? A cartel.

Now aren’t cartels meant to be bad, VERY BAD things. Don’t we have a Commerce Commission to bust cartels?

Now tack another few words onto the definition “at the expense of those who are not members.”

This gets to the heart of the evil of unions.

In a free market, the price of tomatoes, electricity, “erotic massage”, dental work and all other commodities or types of human labour is determined by the law of supply and demand.

I notice that I have to pay staff considerably more than I did two years ago (way above inflation) because labour (especially skilled)is in short supply.

If the economy keeps softening and labour supply increases, wage pressures will drop.

Now that is the natural fow of the market. Prices (wages are the price of labour) are signals to be heeded when making decisions.

Right now, some smart teens are forgoing university and learning trades. Why, because chippies can get double the wages of schoolteachers. The demand is high, wages go up, people are attracted to that sector and the shortages are eased. It all works beautifully to everyone’s advantage.

Under a market system you very quickly learn your real value to others. If you don’t like it, you look for ways to increase your value. You become more diligent, you improve your skills, you improve your education, you get another job that uses your talents more productively, you get a heavy traffic licence, or a welders ticket, or a Phd or do a modelling course.

You and everyone else in the market are always on your toes, always on the lookout for ways to make yourself more valuable to your fellow man.

Now some people don’t like the idea of being paid what others deem they are worth. They tend to be the lazy, the malcontents and those suffering from an delusions of grandeur. They are boys who want a man’s wage without developing a man’s skills, or being willing to take on a man’s responsibilities.

Unionism is tailor made for these losers. Now they can band together, pay a little money to the union boss and wield their collective muscle against vulnerable employers and the public.

In a union, all you need is numbers and muscle. If your employer is weak, or you are in a strategic industry (port worker, air traffic controller, Cook Strait steward) you can extort wages well above market levels.

What’s wrong with that? Won’t you then spend those wages in your community to the benefit of all?

Yes you will, but your boss, or his shareholders will have less money to spend in their communities. Those people outside your union will also have less money to spend and some may have no job at all.

In short, although unions can extort higher wages from the community, for a certain group, it means that everyone else must share what’s left of the wealth “pie”.

But don’t unions protect the vulnerable, the simple, the easily “exploited”?

A friend of mine had a leather factory. They employed a young retarded man to do sweeping. He was essentially of “sheltered workshop” capability. He loved his job and he worked at the factory for several years. He was paid a good wage, but lower than the factory “standard’ for a labourer.

Along came the union and said, pay this guy the standard wage. The factory owner refused as it would be both uneconomic and unfair to the more able labourers. The union said that you will have to fire him then. The owner argued and argued but the union wouldn’t budge. The young guy was eventually fired and went to a sheltered workshop and an even lower wage.

Some bosses are pricks. Some bosses are stupid. But the vast majority are bosses, because the are smart, enterprising and know how to value people.

The few bosses that abuse their workers, end up back on the factory floor very quickly in a free market. Labour is any employers greatest asset and those who look after their staff the best, in the long term, make the greatest profits.

Marginal workers, the poorly skilled, the unintelligent, the illiterate, the retarded still don’t need unions. They have employment contracts, they have sympathetic workmates, they have family, they have teachers, friends, church members and employment lawyers to advocate for them. They even have the courts if their contract is breached.

Their ultimate safeguard, one that socialists will scoff at, is tha free people are benevolent and will always try to “see their mates right”.

Unions can do nothing for you that you cannot do for yourself. Who needs them?


Author: Admin

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27 thoughts on “CCQ 8 Is There a Place For Unions?

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  3. Intersting isn’t it TIC, you’re doing a job you like and money is secondary. You’re happy and your conscience is clean.

    Yet some unionists get big money and cushy conditions and they’re still bloody miserable.

    It’s not just what you earn, its hoe you earn it that counts.

    You can’t feel true satisfaction knowing you’re being paid more than you’re worth because your mates have threatened to wreck your employers business if he doesn’t cough up.

    It’s no surprise that unions so quickly resort to threats and violence to get their way. Their level of ethics is pretty damn low.

  4. Good points. I am in my current job paid well below the going rate, because there are a number of other issues. I don’t mind because the money is good enough from my POV, and I love my job. I’ll never join a union. In my industry the union has turned into a Labour party publicity machine, whereas most of my colleagues are centre-right in their political beliefs so some resigned in protest. And the government has signed up into cosy union-member-only deals like the pillocks they are. Also in this industry there is still centralised wage bargaining, which Labour brought back in just for the union’s benefit after National had dropped it.

    Right now the strikes are all up, the latest being the Ontrack employees. the sole rationale for their claim seems to be parity with other rail union employees. Their union is talking amalgamation with the even more militant Maritime Union, this can only be a bad thing in the long term.

  5. Yes, all good points Trevor. And on the historic note: I think (some) unions were more like professional societies in the past (a 100 years ago).

    These days they seem to be mostly stooges for the Socialist Worker. Your factory sweeper is the perfect example. And again it’s a perfect example why there shouldn’t be a minimum wage at all because it is always the bottom of the market that is most adversely affected: they can’t get a job, they can’t pickup job skills. They get just one thing: life on benefits.

  6. To clarify. I would not ban unions, just as I would not ban any other cartel. A point I will deal with when I answer the question on the Commerce Commission. The correct way to deal with unions is to give them no special privileges in law and apply normal laws against them when they resort to thuggery, intimidation, breach of contract etc.

    With no special privileges, the market will sort out unions, just as it will sort out any other attempt at cartelisation.

  7. Darren: there’s no problem with unions, as such – mere groups of people who agree to cooperate in some way; the problem comes when governments grant special privileges to unions. E.g., when businesses aren’t allowed to hire non-union workers, or aren’t allowed to fire people who join unions, or keep union recruiters off their premises, or when union workers go on strike and proceed to harass, beat, and even murder strike-breakers, while the police look the other way, etc.

  8. I guess my point would be, while a lot of what you say is right – you wouldn’t ban them, unless you believe the Commerce Act should apply to unions?

  9. By and large I agree with you, Trevor.
    However, employers form their own associations, cartels, or whatever.
    And what about where the jobs market is somewhat monopolistic.
    I am a journalist and you effectively work for either Fairfax, APN, or one of a few independents. there is not much choice.
    Growing up in the UK, I remember the Confederation of British Industry was generally referred to as “the bosses union”, not that there is anything wrong with that.
    I guess the Employers & Manufacturers Association fills a similar role here in NZ.
    If employers can bandy together and help each other, increase their market power, then so be it.
    So can the employees and that is where unions fit in.
    What is sauce for the goose is sauce for the gander.
    It is all about freedom of choice.
    I am not a union member by the way. The issue comes down to one of fairness. I have come across some awful employers here in NZ so you quickly leave them and likewise, some unions go too far.
    The 1979 ‘winter of discontent’ was a real education for many, myself included, and that led to Britain’s Golden Age of Thatcherism.

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