When Unions Were Useful Instead of Harmful

Unions once provided a valuable service, and could again if they chose to.

On Scragged's list of "awful things we often write about" right below "Obama administration appointees" can be found "unions."  Labor unions are responsible for the destruction of countless millions of American jobs and the death of high-wage American mass-manufacturing, to say nothing of the looming bankruptcy of various states and the oppression of taxpayers nationwide.  This country would unquestionably be a better place without unions, unionism, union bosses, union contributions, union corruption, and most certainly, without exclusive union bargaining rights.

How is it possible that such economically devastating and incomparably venal organizations came to be?  How was the first one ever allowed?  Have we always been this stupid?

No.  A very long time ago, unions performed noble and worthy services for their members and their employers, helping greatly to make a better world for everyone.

If unions would take a long, hard look back to their origins, they could benefit us all once again.  Likely?  Perhaps not; but it's worth talking about.

Fighting Against Abuse

The story most Americans know and which public-school teachers and union leaders love to proclaim, is of the workers' righteous struggle against oppressive and callous bosses.  Perhaps surprisingly, there's a lot of truth to the tale.

In the mid-1800s, there were no worker's safety laws or any sort of employer-provided insurance; men injured on the job were thrown out on the street to beg.  Horrors like the Triangle Shirtwaist Fire where locked fire-escape doors led to the incineration or defenestration of 146 souls were shockingly commonplace.

Individually, unskilled workers had next to no power.  With ships arriving daily delivering new immigrants, bosses could instantly replace any dissatisfied laborer with a more cooperative and probably starving substitute.  You think it's too dangerous to work here?  Nobody's making you stay...

American unions were intended to cross company lines, and indeed ultimately to organize workers across entire industries.  The early union organizers recognized that they had to be able to enforce some kind of labor monopoly in order to have any power over their employers.  If a company can instantly replace striking workers, why worry about a strike?  Hence the mass violence that characterized early unionism, as strikers and activists prevented the unemployed from taking the jobs they refused to do by beating them up.

The means may have been wrong, but the ends of the day were good.  First individual companies, then states, and eventually the Federal government established standards for safety, overtime pay, injury compensation, and all the other panoply of worker protections that modern America has come to accept as normal.  As the Industrial Revolution changed into the Information Revolution and almost all jobs required some skills, even the stingiest boss realized that it made good business sense to keep his employees alive.

Quality Labor Supply

But the unions did not merely provide benefits to their members.  For many years, they also provided employers with a way to ensure an adequate supply of skilled workers wherever they were needed.

What today we call "skilled trades" evolved out of the medieval guilds, predating America, in which young men would be apprenticed to masters in a given line of work.  Trade unions followed this same pattern: a young man would be permitted to join the union as an apprentice working under a full member, graduating to journeyman and eventually master status as his skills and experience improved.  By hiring a unionized master electrician, an employer wasn't merely paying unearned economic rent; the employer could have confidence that his new hire was, in fact, fully qualified and able to perform the job of an electrician.

A few unions still have this reputation today: New York City's skilled trades, for example, are notoriously expensive and featherbedded with arcane and needless work rules, but the tradesmen themselves are known for doing their work thoroughly and well, albeit slowly and at great cost.

It's difficult for non-entrepreneurs to fully understand just how difficult finding qualified employees can be, yet how absolutely vital it is to any business.  Particularly in an assembly-line factory, a machine malfunction can easily shut down the entire line, idling the whole plant and all the workers until the problem is fixed.  An incompetent electrician or machinist can not only hurt himself, he can kill the profitability by plant-closing mistakes and needlessly-long repairs.

Yet very few bosses are themselves sufficiently skilled in every trade to be able to properly evaluate a new hire's skills, and government-funded skills tests are no help.  Who can best know how good an electrician or plumber is?  Another electrician or plumber - and that's the service unions provided.

Instead of a headhunter, the boss could call up the local union hiring hall.  "I need an electrician" - and later that day an electrician would arrive, whose certificate from the union was all the proof the boss needed that the new employee would know what he was doing.

Originally, unions did their own training, operated their own apprenticeship programs, and disciplined their own members for professional incompetence much as medical associations are supposed to do today for doctors.  The union members knew that the reputation of their union depended on the high standards of its members and were just as harsh on layabouts or the useless as any boss would be.

We have a friend who bought a house in Boston nearly 40 years ago and wanted a garage.  A union bricklayer gave the lowest bid; he was glad to accept because at that time the union had a reputation for quality work.

To his surprise, the work went a lot faster than he had seen on major projects.  "There isn't much construction now," the bricklayer explained.  "I needed work and I knew you couldn't afford our usual rates."  Although the bricklayer understood that our friend would have gone without the garage if he hadn't gotten a bid he could afford, the union did not seem to connect "not much construction now" with the costs they imposed on building owners whom they assumed to be richer.

Forgetting the Roots

So what happened?  Producing real value is hard work, of course, so it's no surprise that over time, unions found it easier to extort benefits by using political power than by providing valuable services just as GM found it easier to restrict Japanese auto imports than to improve their own products.

In a way, the worthlessness of modern unions mirrors the cause of the Detroit's Big Three's decline.  The car companies forgot their primary purpose: to make cars that people wanted to buy at a price they could afford while still being profitable.  The unions forgot their primary source of value: to reliably supply employers with workers who were skilled in various areas of labor and who were willing to sustain the long-term profitability of the enterprise.

Instead of disciplining the incompetent, today's unions fight to retain their jobs no matter what - so we get such idiocies as the "job bank" where laid-off autoworkers continue to collect their salaries while sitting around playing cards, and the "rubber room" where teachers accused of crimes earn full pay while doing nothing.  The unions no longer have a purpose in fighting for worker safety - it's the law for all workers, regardless of union membership.  By monopoly bargaining power, they can obtain higher wages for their members for a time, but only until the company moves the factory to a less-unionized state or goes bust.

For union workers to sustainably collect higher wages over the long term, they must be worth those higher wages.  Many years ago, they were; today, mostly, they aren't.  Instead of a useful service, they have become a rent-seeking monopoly leech sustained by pure political power - and a change in politics can spell their doom.

Futures Dark and Bright

It doesn't have to be this way.  Bosses still struggle to find qualified workers, the more so since a high-school diploma no longer means much of anything and even a college degree is no guarantee of common sense or useful experience.

Union bosses dream of extending unionism into white-collar professions like computer programming.  They've had no success thus far - but that's because they've forgotten the service they once provided.  If there's one job category where old-style unions would really be useful, it's computer programming!

Think about how many incompetent programmers there are whose skills can only be judged by their peers, with no organized way of readily doing so.  A computer-science degree is also no proof of actual useful competence, whereas many of the greatest programmers have never spent a day in the classroom.  An organization which apprenticed, trained, and certified programmers reliably and consistently would be well worth some extra cost.

Instead, today's union leaders have chosen to pursue increasing public-sector unionization on the presumption that the government is the one organization which can never go bankrupt and which can always extract the money to pay whatever salary demands the union makes.

Except that this simply isn't so: we see increasingly many reports of local governments firing all their employees and using contractors instead, or threats to declare bankruptcy and cancel union contracts.  There is always a limit.  The limit is just not as obvious with government, but it's no less real.

Like Detroit's automakers, modern American unions have a choice.  They can re-examine their history and find a way to be really useful so that companies and people will choose to work with them.  Or, they can continue to steal unearned money by force and violence - but that only works until the costs of temporary peace exceed the cost of permanently resolving the problem.

And then, the politics would abruptly change, and there'd be no more unions.  The machinists of Eastern Airlines proclaimed "Full pay 'til the last day", and that's exactly what they got; there's no more machinists union at Eastern, and no Eastern Airlines at all.  The mechanics of Northwest Airlines tried much the same thing with much the same result.

Will anyone in labor learn the lesson?

Petrarch is a contributing editor for Scragged.  Read other Scragged.com articles by Petrarch or other articles on Economics.
Reader Comments
Many times in history, we see examples of a group abusing its power, prompting another group to struggle against their abuse, right its wrongs, and then begin abusing its own power in time. Federalization, for example, was helped along by the civil rights movement (a reaction to evil discriminatory practices). If only the practitioners of racial discrimination had voluntarily given up their evil practices, our government's excess of power might be much less than it is today!

Your description of unions sounds like this. If only employers had volunteered to end their abuse of their employees way back when, we wouldn't be in the pickle we're in today with the unions because the unions wouldn't have needed to form in the first place.

If we bust up every union here and now, how long would it be before we needed unions again? Entrepreneurs are as susceptible to the lures of greed and laziness as their workers are.

We could accept the idea of a pendulum swinging back and forth into the distant future, with unions waxing and waning in opposition to the employers they try to keep in check. But I wonder if Scragged has an alternate solution? Is there a better way?
July 9, 2010 10:24 AM
Sometimes it is a case of the grass being greener on the other side of the fence. In public education today, the common practice of job placement and retention by seniority has become much maligned. The problem, say its detractors, is that a teacher's quality may well have nothing to do with the number of years they have been doing their job. Seniority is a stumbling block to excellence because it favors a category of teacher other than the best.

I was not present when the practice of seniority came into popularity. I can only imagine how it happened. But I'm pretty sure it went something like this:

Teachers noticed that sometimes preferential placement and job retention was given to people who didn't deserve it. They might have been relatives or in some other way connected to a principal or other politically influential figure. Maybe they were just popular, or spent their time schmoozing with the decision makers rather than putting effort into honing their trade skills.

As they unionized, one of the things they made demands on was that this situation be rectified. It was probably a reasonable demand, and there were probably examples they could point to where abuse had indeed occurred.

Now the people with the power to make such decisions had to ask themselves, "How do we institute a more fair and equitable system of employee placement and retention?" It's likely that the teachers themselves weren't set on seniority as a plan; they just wanted to be treated fairly. It was up to the school departments to figure out how to accomplish that. What would a school department choose?

It could let things go on as they always had, with principals or other administrators hiring whoever they wanted, but that wasn't really an option because that's what had gotten them into this situation in the first place. Clearly there was some fear that continuing along that course would be detrimental, or else they would never have changed from that method.

Ideally, a system could be devised wherein the "best" teachers were favored for placement and retention, leaving the "worst" to be discarded or placed in those positions where they could do the least amount of damage until they could be replaced. But how to decide who is "best" and who is "worst"? It might be possible, but in order to do it right a system of review would have to be put into place, a system that would require time, effort, and money. A system that, if improperly implemented or even simply perceived as unfair, might be challenged and lead to headache down the road.

Or a very simple system could be implemented that treated everyone fairly by treated them all the same. Seniority was a gem, not necessarily to the teachers, but to the school departments who hired them, because there was really no arguing against its fairness (seniority being very impartial as a mechanism for determining who ranks above whom when decisions of placement and retention need to be made) and it was a relatively hassle and expense-free system for them to operate under.

Of course it wasn't, and isn't, without its problems. It DOES favor people who have simply been around a long time, rather than those who are truly more skilled or effective. But it costs next to nothing and keeps legal challenges from the employees down to a minimum.

While in some ways it would be preferable to strive for the ideal of favoring the "best" teachers, any system of doing that will inevitably cost more in terms of creation, maintenance, and dealing with the consequences of its failures (real or perceived) in the courtroom.

Going back to the old method of allowing administrators free reign over hiring and placement would inevitably lead to the situation that necessitated a change in the first place; it would be cheap in terms of maintenance but potentially expensive in terms of time and money wasted on lawsuits when abuse came to light, as well as hidden costs should a department get a bad name (deserved or not) for nepotism or other unfair practices.

None of these systems are perfect. We may well see a shift of seniority losing popularity to one of the two other options. But the grass is always greener, and it won't take people that long to discover the nettles growing in whatever new pasture they choose to graze in.
July 9, 2010 10:50 AM
Well, I certainly don't think the government has any place busting up unions generally - individuals have a right to free associations.

And of course, signed contracts ought to be enforced according to the terms of the contract as written, whether it be a union contract or anything else.

Where we've run into a problem is via the use of government power to muscle companies into accepting union contracts that they do not want, by prohibiting companies from terminating employees that they do not want (which should be an absolute right, just as employees have an absolute right to quit).

Public-sector unions are a different story - by their inherent nature, they are a double-dealing conflict of interest, and governing authorities should be prohibited by law from any negotiations with or accepting of funds from associations of public-sector employees. As is in fact the case in a few states.

Obviously government should enforce the peace by arresting individuals engaging in violence or obstruction of the public way, if necessary using RICO and conspiracy statutes. But that applies to company thugs as to union thugs.
July 9, 2010 10:51 AM
Regarding schools, you're half right Werebat. If we put the principal in absolute power over employment without making any other changes, of course it would lead to nepotism and patronage as existed before.

What we need to do is to give hiring power to the principal, AND ALSO school choice vouchers to the parents of the students. That way, a principal who appointed his incompetent friends and relations would soon wind up with an empty school and no money. He'd HAVE to appoint the competent if he wanted to stay in business - just like any executive of a private corporation.
July 9, 2010 10:54 AM
I disagree entirely.

I've read about the 'horrors and oppressions' that were suffered before unionization. Two things...

First, the vast majority of the accounts you mentioned were written about in books and magazines by pro-union libs that exaggerated and spun and lied to promote their agenda. Few of them can be found by looking at old news reels or newspapers. That doesn't mean they didn't happen, but it does mean that you're looking through a glass darkly. Business owners were always portrayed as evil trolls, lacking any semblance of a human soul, and laborers were always portrayed as Little Orphan Annie. Somehow, even though society was significantly more neighborly, more religious and more self-educated/reliant in those days, these writers managed to paint typical employment as the daily working of a Nazi concentration camps.

Second, nearly every single harm you cited could have been fixed WITHOUT unions, and that's the key. The question should NOT be: did unions fix anything? It should be: were unions the RIGHT fix. The same is true with the benefits. Every single benefit you cited could have resulted elsewhere. The unions were not the only way those benefits could have existed, nor were they even the most efficient.

Consider your (fairly shaky, I think) union benefit of 'vetting skills'. There are MYRIAD third party companies that do this service now. In fact, there is an entire industry within computer programming - the labor category you cite - specifically for vetting, testing and certifying levels of both skill and intelligence. Unions never needed to handle this because good ole' fashion capitalism did the trick. A service was needed and someone supplied it. Competition removes the testing/vetting shops that don't live up to their name.

In fact, the university system, in the US, is sort of supposed to handle that. The whole point of getting an Ivy League education is so that employers think that you know more than a person that got a state education. Having a Bachelors Degree in Computer Science tells employers that you understand how computers think. Having a Masters Degree in Computer Science tells employers that you know how to TEACH OTHERS how computers think. Working a blue collar job? "GoodWrench Certification" demonstrates that you know your way around a car engine. And so on.

As for easily replacing unskilled workers, so what? Being "unskilled" is not a condition anyone should aim for. The reason good parents work so hard to focus and education their children is precisely so that they don't wind up unskilled. Being unskilled typically results from a attitude of laziness, bad parenting, substance abuse, crime or other unsavory things. Our society should not expect its members to reach mid-life without skill or use. Thus, as with so many other things, being unskilled is it's own punishment. If one doesn't want to be easily replaced, one should gain a skill. And there were many people, in those times, who did exactly that without college grants or rich parents.

Why not ask for a contract when your services are hot in demand? There are always dead spells in labor where a machine shop needs more

Immigration can be controlled. If we found that were so many migrants taking blue collar work, simply stop allowing people to immigrate. There are many countries around the world that have virtually zero immigration. Switzerland, for example, which is a developed nation.

The problem with unionization, both then and now, is that it is the result of Group Think. "If I gang up with my friends against someone that's rich, I can take more of [x] than I would otherwise get". To suggest that at some time in history that HAD to be done, is to miss the point. It was still Group Think, it was still gang mentality and the damaging results fell into place exactly as they will every time.

Trusting a gang to make decision in the best interest of those they are holding hostage NEVER works. Even when you think you've educated the gang and explained to them that the hostage might die.
July 9, 2010 11:04 AM
One of my sentences got chopped off. Weird. It should read:

Why not ask for a contract when your services are hot in demand? There are always dead spells in labor where a machine shop needs more laborers than they can find. At that point, threaten to quit unless you get a signed paper from the owner for at least 1 year of guaranteed work. Anyone can ask for that at any time. There were plenty of times between the Civil War and Industrial Revolution where industries could not find enough laborers. At times, we had to import them from other countries like China. A laborer concerned with saving his money and providing for his family - and not concerned with getting drunk in the local bar at night - would take advantage of such opportunities.
July 9, 2010 11:55 AM
"Why not ask for a contract when your services are hot in demand?"

You mean, a union contract? :-) Like you mentioned, when industries could not find enough workers is precisely those times when unions made great inroads. But then, there WAS a signed contract thereafter, and I'm assuming you believe that legally signed contracts should be honored and enforced?
July 9, 2010 12:27 PM
No, I mean an individual contract, but then you already knew that. 'Memorandum of Understanding' paperwork was common in those days between individuals.

You've purposefully missing my point which demonstrates it's superiority. :)

That a union has a contract, and that signed contracts should be enforced, is arguing about a cart when you have no horse to pull it.
July 9, 2010 12:33 PM
The NY Times wants to roll back the clock to the grand old days of labor agitation.

Restoring a Hallowed Vision
A new union president's vision draws on important lessons of the post-World War II era.
July 10, 2010 10:17 AM

I read a lot of the comments made on this blog too try and understand what it is that people are really thinking.As a craft union member for 41 years I can tell you this, that after a 5 year apprenticeship and 10 to 15 years of working experience,I felt comfortable to become the teacher.This was now what was expected of me and I gladly do, as the craftsmen that taught me gave me their expertise and shared the bond of knowledge and pride of being one of the lucky ones to do this.
There has always been a sense of pride in the family,that our trade and abilities have been passed on.This is what we are.We are the American middle class,the backbone of this Nation.It's my job and I love it.

August 19, 2010 4:50 PM
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