Trade unions

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When the factory came into existence... work became an indignity rather than a matter for pride. ... Organized labor has always consented to this entirely uncreative subjection. ~ Rexford Tugwell

A trade union (British English), labour union (Canadian English) or labor union (American English) is an organization of workers who have banded together to achieve common goals such as protecting the integrity of its trade, achieving higher pay, increasing or restricting the number of employees an employer hires, and better working conditions.

Quotes[edit]

  • Standardization of wage rates implies that worker skill levels will be negatively related to the desire for a union job[.]
  • Illinois owes well over $200 billion, with more than $150 billion owed to pensions and benefits of retired state workers. Tax increases, like the newly enacted and veto-overridden 32 percent increase of state income tax, or Chicago’s recent 10 percent increase of property tax, will stave off immediate pension shortfalls, but will not stop the long-term debt from growing.
    The second critical problem is deficit. The massive debt was created because Illinois spends more money than it collects, primarily to pay its workers. For years, political leaders in Illinois and Chicago bestowed labor benefit that they could not afford. Why? Largely because they were elected into office with the support of state workers’ unions—the same parties with whom they ended up “negotiating” salaries and pensions. As a result, Illinois is paying its state employees 26 percent more than what similar private-sector workers receive—among the biggest gaps in the country. Current leaders—Republican Governor Rauner and Chicago’s Democratic Mayor Emmanuel—are trying to put an end to this fiscal sinkhole, but with little support from other lawmakers.
  • [...] unions do not reduce wage inequality among women.
    • Card, David, Thomas Lemieux, and W. Craig Riddell, "Unions and the Wage Structure," in International Handbook of Trade Unions (Cheltenham, U.K.: Edward Elgar, 2003).
  • ...when Matt called the second moving company and explained the situation, a person there strongly advised him to drop the iidea. Unionized moving companies were all mob controlled, the person said. What Theranos was proposing to do risked devolving into violence.
    • John Careyrou on San Fransisco-srea biotech company Theranos risking organized crime violence by dropping a contract with a unionized moving company. Bad Blood: Secrets and Lies in a Silicon Valley Startup, Knopf (2018), p. 42
  • Some economists suspect that President Franklin Roosevelt’s “New Deal” cartelization policies, which limited competition in product markets and increased labor bargaining power, kept the economy depressed after 1933. These policies included the National Industrial Recovery Act (NIRA), which suspended antitrust law and permitted collusion in some sectors provided that industry raised wages above market clearing levels and accepted collective bargaining with independent labor unions.[...]
    The recovery from the Great Depression was weak, and was accompanied by significant increases in real wages and prices in several sectors of the economy. A successful theory of the recovery from the Depression should account for persistent low levels of consumption, investment, and employment, the high real wage, and reduced competition in the labor market. We developed a model with New Deal labor and industrial policies that can account for sectoral high wages, a distorted labor market, and depressed employment, consumption, and investment, despite rapid productivity growth.[...]
    New Deal labor and industrial policies did not lift the economy out of the Depression as Roosevelt had hoped. Instead, the joint policies of increasing labor’s bargaining power and linking collusion with paying high wages prevented a normal recovery by creating rents and an inefficient insider-outsider friction that raised wages significantly and restricted employment.
    The adoption of these industrial and trade policies not only coincided with the persistence of depression through the late 1930s, but the subsequent abandonment of these policies coincided with the strong economic recovery of the 1940s.
  • In this paper, we have provided theory and evidence concerning union rent seeking and its effects on firm market value and intangible capital investment. Consistent with our hypothesis that union rent seeking can take the form of a distortionary tax on the returns to long-lived investments, we find that intangible R&D investments add relatively less to the market value of firms in more unionized industries. Firms in highly unionized industries respond by investing less intensively in R & D.
  • A growing body of work--both theoretical and empirical--has emphasized that unionization may be better understood as a tax on capital rather than a tax on labor. Under this "new" view, unionization unambiguously lowers investment. Using data on union certification elections, we estimate the impact of unionization on firms' investment behavior. Employing both a standard q-model and an "investment surprises" technique, we find that union certification significantly reduces investment. We find that a winning certification election has, on average, about the same effect on investment as would a 30 percentage point increase in the corporate tax.
    • Fallick, Bruce and Hassett, Kevin A., Investment and Union Certification (May 1996). Board of Governors of the Federal Reserve System Finance and Econ. Disc. Series 96-43. Available at SSRN: https://ssrn.com/abstract=3652
  • Half a Billion Dollars. That’s how much the California Teachers Association and the powerful Service Employees International Union have spent on California politics since 2000. The unions’ return on that “investment”? A legislature totally beholden to them for political support and campaign contributions.
    Here’s another mind-boggling number: Half a Trillion Dollars. That’s an estimate of the unfunded public pension liabilities racked up by California’s state and municipal governments due to overly generous pay and defined benefit pension plans lavished on unionized government employees.
"When unions get higher wages for their members by restricting entry into an occupation, those higher wages are at the expense of other workers who find their opportunities reduced." Milton Friedman
  • When unions get higher wages for their members by restricting entry into an occupation, those higher wages are at the expense of other workers who find their opportunities reduced. When government pays its employees higher wages, those higher wages are at the expense of the taxpayer. But when workers get higher wages and better working conditions through the free market, when they get raises by firm competing with one another for the best workers, by workers competing with one another for the best jobs, those higher wages are at nobody's expense. They can only come from higher productivity, greater capital investment, more widely diffused skills. The whole pie is bigger - there's more for the worker, but there's also more for the employer, the investor, the consumer, and even the tax collector.
  • There may be here and there a worker who for certain reasons unexplainable to us does not join a union of labor. That is his right. It is his legal right, no matter how morally wrong he may be. It is his legal right, and no one can or dare question his exercise of that legal right.
    • Samuel Gompers, address delivered to the Council of Foreign Relations, New York City (December 10, 1918), reported in American Federationist (February 1919), p. 160.
  • We will stand by our friends and administer a stinging rebuke to men or parties who are either indifferent, negligent, or hostile, and, wherever opportunity affords, to secure the election of intelligent, honest, earnest trade unionists, with clear, unblemished, paid-up union cards in their possession.
    • Samuel Gompers, "Men of Labor! Be Up and Doing", editorial, American Federationist (May 1906), p. 319.
  • Don't waste any time mourning — organize!
    • Joe Hill, songwriter and labor organizer, letter to William D. Haywood (November 18, 1915); reported in Philip S. Foner, The Letters of Joe Hill (1965), p. 84. Written while Hill was awaiting execution following his conviction for murder in Utah; the fairness of his trial and accuracy of the verdict remain debated.
  • This paper utilizes unique survey data on labor union coverage at the firm level to examine union effects on the profitability of 705 U.S. companies during the 1970s. Market value and earnings are estimated to be about 10-15 percent lower in an average unionized company than in a nonunion company, following extensive control for firm and industry characteristics. Deleterious union effects on firm profitability are sizable throughout the 1972-80 period, but vary considerably across industries. The relatively poor profit performance of unionized companies may help explain the recent decline in U.S. union membership.
  • Before everything else, the trades unions are necessary as building stones for the future economic parliament, which will be made up of chambers representing the various professions and occupations.
    • Adolf Hitler, Mein Kampf, Volume Two - The National Socialist Movement, Chapter XII: ‘’The Trade-Union Question’’ (1926)
  • I am convinced that we cannot possibly dispense with the trades unions. On the contrary, they are among the most important institutions in the economic life of the nation. Not only are they important in the sphere of social policy but also, and even more so, in the national political sphere. For when the great masses of a nation see their vital needs satisfied through a just trade unionist movement the stamina of the whole nation in its struggle for existence will be enormously reinforced thereby.
    • Adolf Hitler, Mein Kampf, Volume Two - The National Socialist Movement, Chapter XII: ‘’The Trade-Union Question’’ (1926)
  • It is probably true that business corrupts everything it touches. It corrupts politics, sports, literature, art, labor unions and so on. But business also corrupts and undermines monolithic totalitarianism.
    • Eric Hoffer, "Thoughts of Eric Hoffer, Including: 'Absolute Faith Corrupts Absolutely'", The New York Times Magazine (April 25, 1971), p. 50.
  • Under the Supreme Court’s 1973 Enmons decision, vandalism, assault, even murder by union officials are exempt from federal anti-extortion law. As long as the violence is aimed at obtaining property for which the union can assert a “lawful claim”—for example, wage or benefit increases— the violence is deemed to be in furtherance of “legitimate” union objectives. By the Court’s peculiar logic, such violence does not count as extortion.
    • Richard Kendrick, [Freedom from Union Violence: Policy Analysis No. 316], Cato.org, September 9, 1998
  • We examine state-level job growth following two recent recessions, those with troughs in November 1982 and March 1991. In the five years following the troughs, we assess whether variations across states in union membership and right-to-work laws affect the rate of job growth. We find evidence that links union influence to slower job growth during an economic recovery, a finding consistent with previous studies reporting that unions negatively affect average employment and employment growth.
  • It ill behooves one who has supped at labor's table and who has been sheltered in labor's house to curse with equal fervor and fine impartiality both labor and its adversaries when they become locked in deadly embrace.
    • John Llewellyn Lewis, president of the Congress of Industrial Organizations (CIO), radio broadcast (September 3, 1937); reported in Vital Speeches of the Day (September 15, 1937), p. 733. The quote was directed at President Franklin D. Roosevelt, as noted by The New York Times, which reported, "The fact that Mr. Lewis did not mention the President by name did not dull the point in the eyes of those who had followed labor developments through the violent days of last Winter and Spring. These observers unanimously accepted this part of his speech as a direct reference to Mr. Roosevelt's invocation of 'a plague on both your houses' when the labor unions and steel mill operators were 'locked in deadly embrace' only a few months ago"; (September 4, 1937), p. 1.
  • The United Mine Workers and the CIO have paid cash on the barrel for every piece of legislation that we have gotten. We have the Wagner Act. The Wagner Act cost us many dollars in contributions which the United Mine Workers have made to the Roosevelt administration with the explicit understanding of a quid pro quo for labor. These contributions far exceed the notions held by the general public or the press.
    • John Llewellyn Lewis, president of the Congress of Industrial Organizations (CIO); reported in Saul David Alinsky, John L. Lewis: An Unauthorized Biography (1949), p. 177.
  • Trade unions up to a certain point have been recognised now as organs for good. They are the only means by which workmen can protect themselves from the tyranny of those who employ them. But the moment that trade unions become tyrants in their turn, they are engines for evil: they have no right to prevent people from working on any terms that they choose.
    • Nathaniel Lindley, Baron Lindley, J., Lyons & Sons v. Wilkins (1896), 74 L. T. Rep. (N. S.) 364; reported in James William Norton-Kyshe, The Dictionary of Legal Quotations (1904), p. 238. See also Mogul Steamship Co. v. MacGregor, Gow, & Co., 66 L. T. Rep. (N. S.) 1; Temperton v. Russell and others, 69 L. T. Rep. (N. S.) 78.
  • Controlling for industry sector, firm size, and firm age, the author finds that within the manufacturing sector, union firms grew 3.7% more slowly per year than nonunion firms, and within the nonmanufacturing sector, union firms grew 3.9% more slowly than nonunion firms.
  • Union officials and other CalPERS board members pursued their own political agendas, demanding, for instance, that the fund not invest in firms and countries that lacked worker-friendly labor policies. By 2011, according to a Mercer Consulting report, CalPERS had adopted 111 different policy statements on the environment, social conditions, and corporate governance, all dictating or restricting how its funds could be invested.
    CalPERS leaped into “social investing” at exactly the wrong time. That trend had gained currency in the 1990s with an emphasis on buying into environmentally “clean” companies. Tech firms were high on the list, so the 1990s Internet start-up boom made social investing seem like a sound financial strategy. But when CalPERS debuted its Double Bottom Line initiative in 2000—so called because it would supposedly produce both good returns and good social policy—the tech bubble had already popped.
    Many socially conscious investors then turned their attention to another industry that didn’t pollute: finance. One social-investing research firm named Fannie Mae the leading corporate citizen in America from 2000 through 2004. Other finance firms that attracted big cash from social investors included AIG, Citigroup, and Bank of America, according to an analysis by American Enterprise Institute adjunct fellow Jon Entine. When the market for shares of these firms imploded in 2008, so did the performance of social investors.
  • Union pressure is exerted on the whole tenure profile of wages. The explicit linking of wage levels to seniority reduces incentives for worker investment in general (transferable) training.
  • It’s illegal for you to use violence or the threat of violence for economic gain. It’s unlawful for you to steal someone’s identity. If you try to freeze out competition to obtain a monopoly, regulators may come down on you. If someone in your organization exposes you for wrongdoing, that whistle­blower is protected from retaliation.
    On the other hand, if you’re a union boss, sometimes those rules simply don’t apply. You’re exempt from many laws that apply to regular people.
  • That exemption stems from the Supreme Court’s interpretation of the Anti-Racketeer­ing Act of 1943, known as the Hobbs Act.
    That law forbids the obstruction of interstate commerce by robbery or extortion. It’s the main federal law against extortion (economic gain through violence). Unions’ exemp­tion is rooted in the 1973 Enmons case, in which the Supreme Court ruled that unions are exempt because the law simply doesn’t apply when unions are seeking “legitimate” union objectives.
    The case involved three members of the International Brotherhood of Electrical Workers (IBEW) who were indicted for firing high-powered rifles at three utility company transformers. The oil that drained from one of the transformers blew up a substation. The U.S. District Court in Baton Rouge, Louisiana, dismissed the charges against the IBEW, arguing that the actions were not illegal since they were done to obtain legitimate union objectives. Writing for the 5-4 majority, Justice Potter Stewart put the onus back on Congress for creating a loophole in the Hobbs Act.[...]
    Thousands of violent acts have gone unpun­ished as a result of Enmons. For example, the National Institute for Labor Relations Research identified 8,799 incidents of union-related violence between 1975 and 1998. Less than 3% of these incidents resulted in convictions, according to the Institute.


  • Like most organizations, labor unions have aims they cannot at­tain, make claims for deeds they never achieved, and get blamed for sins they never committed. For example, labor unions try to claim credit for raising wages. But, regardless of their claims, unions have had no more to do with the general level of wages than with the general level of the seven seas. They have, it is true, succeeded in obtaining increases for their members at the expense of nonmembers; they have de­stroyed property and done other damage to their employers; and they have thrown many of their own members into unemployment.
  • Labor unions are politically in­fluential. In large measure they get increased federal activity on projects they sponsor. Their coerced and uneconomic wage hikes cause unemployment. Then they use their pressure for gov­ernment guaranteed full employ­ment which adds billions to the costs of government. It is pre­cisely this successful pressure on government that is the effective subcause of inflation. This is how labor unions cause inflation!
  • By outlawing Solidarity, a free trade organization to which an overwhelming majority of Polish workers and farmers belong, they have made it clear that they never had any intention of restoring one of the most elemental human rights—the right to belong to a free trade union.
  • [...] at best, a union can achieve a higher, restrictionist wage rate for its members only at the expense of lowering the wage rates of all other workers in the economy. Production efforts in the economy are also distorted. But, in addition, the wider the scope of union activity and restrictionism in the economy, the more difficult it will be for workers to shift their locations and occupations to find nonunionized havens in which to work. And more and more the tendency will be for the displaced workers to remain permanently or quasi-permanently unemployed, eager to work but unable to find nonrestricted opportunities for employment. The greater the scope of unionism, the more a permanent mass of unemployment will tend to develop.
    Unions try as hard as they can to plug all the "loopholes" of nonunionism, to close all the escape hatches where the dispossessed workmen can find jobs. This is termed "ending the unfair competition of nonunion, low-wage labor." A universal union control and restrictionism would mean permanent mass unemployment, growing ever greater in proportion to the degree that the union exacted its restrictions.
  • “There was no real taxpayer representation in that room,” Seeling, now retired and living in a Dallas suburb, said in a recent interview. “It was all union people. The greed was overwhelming.”
    • Ronald Seeling, former actuary for the CalPers pension system for California government employees, on a 1999 change to the CalPers system that gave more benefits to unionized workers but led to massive shortfalls in later years. As quoted by Jack Dolan "The pension gap", The Los Angeles Times, 18 September 2016
  • Unions function as labor cartels. A labor cartel restricts the number of workers in a company or industry to drive up the remaining workers' wages, just as the Organization of Petroleum Exporting Countries (OPEC) attempts to cut the supply of oil to raise its price. Companies pass on those higher wages to consumers through higher prices, and often they also earn lower profits. Economic research finds that unions benefit their members but hurt consumers generally, and especially workers who are denied job opportunities.
  • The average union member earns more than the average non-union worker. However, that does not mean that expanding union membership will raise wages: Few workers who join a union today get a pay raise. What explains these apparently contradictory findings? The economy has become more competitive over the past generation. Companies have less power to pass price increases on to consumers without going out of business. Consequently, unions do not negotiate higher wages for many newly organized workers. These days, unions win higher wages for employees only at companies with competitive advantages that allow them to pay higher wages, such as successful research and development (R&D) projects or capital investments. Unions effectively tax these investments by negotiating higher wages for their members, thus lowering profits. Unionized companies respond to this union tax by reducing investment. Less investment makes unionized companies less competitive.
  • We are asked to permit a hundred men to go round to the house of a man who wishes to exercise the common law right in this country to sell his labour where and when he chooses, and to 'advise' him or 'peacefully persuade' him not to work. If peaceful persuasion is the real object, why are a hundred men required to do it? … Every honest man knows why trade unions insist on the right to a strong numerical picket. It is because they rely for their objects neither on peacefulness nor persuasion. Those whom they picket cannot be peacefully persuaded. They understand with great precision their own objects, and their own interests, and they are not in the least likely to be persuaded by the representatives of trade unions, with different objects and different interests. But, though arguments may never persuade them, numbers may easily intimidate them. And it is just because argument has failed, and intimidation has succeeded, that the Labour Party insists upon its right to picket unlimited in respect of numbers.
  • The Conservative Party is the parent of trade unionism, just as it is the author of the Factory Acts. At every stage in the history of the nineteenth century it is to Toryism that trade unionism has looked for help and support against the oppressions of the Manchester School of liberalism, which cared nothing for the interests of the state, and regarded men as brute beasts whose labour could be bought and sold at the cheapest price, irrespective of all other considerations.
  • The biggest myth about labor unions is that unions are for the workers. Unions are for unions, just as corporations are for corporations and politicians are for politicians.
"Unions are for unions, just as corporations are for corporations and politicians are for politicians." Thomas Sowell
  • ...in the '20s and particularly when the Depression got underway, black construction companies in the south using black non-union labor would come up to the north and underbid on government contracts, taking them away [from white unionized workers]. And so this was very common, to the point where they passed the Davis-Bacon Act which said that on government contracts you must pay the prevailing wage. Which was translated almost invariably into the union wage.
  • Many people think of labor unions as organizations to benefit workers, and think of employers who are opposed to unions as just people who don’t want to pay their employees more money. But some employers have made it a point to pay their employees more than the union wages, just to keep them from joining a union.
    Why would they do that, if it is just a question of not wanting to pay union wages? The Twinkies bankruptcy is a classic example of costs created by labor unions that are not confined to paychecks.
    The work rules imposed in union contracts required the company that makes Twinkies, which also makes Wonder Bread, to deliver these two products to stores in separate trucks. Moreover, truck drivers were not allowed to load either of these products into their trucks. And the people who did load Twinkies into trucks were not allowed to load Wonder Bread, and vice versa.
    All of this was obviously intended to create more jobs for the unions’ members. But the needless additional costs that these make-work rules created ended up driving the company into bankruptcy, which can cost 18,500 jobs. The union is killing the goose that laid the golden egg.
  • There also is a reason labor unions are flourishing among people who work for government. No matter how much these public sector unions drive up costs, government agencies do not go out of business. They simply go back to the taxpayers for more money.
    Consumers in the private sector have the option of buying products and services from competing, nonunion companies — from Toyota instead of General Motors, for example, even though most Toyotas sold in America are made in America. Consumers of other products can buy things made in nonunion factories overseas.
    But government agencies are monopolies. You cannot get your Social Security checks from anywhere except the Social Security Administration or your driver’s license from anywhere but the DMV.
    Is it surprising that government employees have seen their pay go up, even during the downturn, and their pensions rise to levels undreamed of in the private sector?
  • By the way, I hope you all know about the worldwide boycott of Coca Cola company for things like murdering union organizers in Colombia. See the site killercoke.org.
  • To remember the loneliness, the fear and the insecurity of men who once had to walk alone in huge factories, beside huge machines—to realize that labor unions have meant new dignity and pride to millions of our countrymen—human companionship on the job, and music in the home—to be able to see what larger pay checks mean, not to a man as an employee, but as a husband and as a father—to know these things is to understand what American labor means.
    • Adlai Stevenson, speech to the American Federation of Labor, New York City (September 22, 1952), in Speeches of Adlai Stevenson (1952), p. 62.
  • Another cause of long-term unemployment is unionization. High union wages that exceed the competitive market rate are likely to cause job losses in the unionized sector of the economy. Also, those who lose high-wage union jobs are often reluctant to accept alternative low-wage employment. Between 1970 and 1985, for example, a state with a 20 percent unionization rate, approximately the average for the fifty states and the District of Columbia, experienced an unemployment rate that was 1.2 percentage points higher than that of a hypothetical state that had no unions. To put this in perspective, 1.2 percentage points is about 60 percent of the increase in normal unemployment between 1970 and 1985.
  • When the factory came into existence... work became an indignity rather than a matter for pride. ... Organized labor has always consented to this entirely uncreative subjection.
    • Rexford Tugwell, The Industrial Discipline and the Governmental Arts (1933) as cited in Elements of Refusal (1999), p. 102
  • Two of Chicago’s four city pension funds will be bankrupt within a few years, according to Chicago Mayor Rahm Emanuel. You’d think that’s a scenario unions – the supposed champions for public-employee retirements – would want to avoid.
    But not in Chicago. Unions are fighting to block any kind of pension reform, effectively locking in bankruptcy for city-employee pension systems.
  • While some persons may favor right-to-work laws largely on philosophical grounds (people should have the freedom to decide whether they want to belong to a union or not), the major reason I support such laws is that they seem to promote prosperity — specifically, higher incomes. Real personal income in the right-to-work states rose nearly twice as much as in other states from 1970 and 2013.
    To be sure, most of that reflected higher population growth in right-to-work states — there was massive in-migration to these states from the states denying workers the right to not join a union. Yet even after correcting for population growth, income per person on average rose somewhat more in the right to work jurisdictions. Capital moves to right-to-work states with a more stable labor environment, and that increases labor demand and, ultimately, income and wages.
  • [...] naturally, we assume all bankruptcies are a bad thing. They're humiliating, they impact business, they’re difficult to recover from. The situation is far from ideal. But it’s actually not without its benefits.
    Take for example San Bernardino. It was running a $45 million deficit (on a $130 million budget.) But its creditors – workers and retirees – were unwilling to help out. The best the unions were able to do was to offer what they thought was a major concession: allowing newly-hired public safety workers to retire with 90 percent of their salary at the age of 55 – instead of 50, which had been the earlier deal!

See also[edit]

External links[edit]

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