Organized Crime
40. Markets, Not Unions, Give us Leisure and Safety on the Job
In Human Action Ludwig von Mises wrote that, in his time, labor unions had always been the primary source of anti-capitalistic propaganda. Your author was reminded of this by a bumper sticker that read: “The Union Movement: The People Who Brought You the Weekend.”
In reality, the average work week had been declining for generations before unions began lobbying for maximum-hour legislation. The halving of the average work week from 61 hours in 1870 to around 35 hours today (according to the U.S. Department of Labor) was caused by capitalism, not unionism. As Mises explained: “In the capitalist society there prevails a tendency toward a steady increase in the per capita quota of capital invested. . . . Consequently, the marginal productivity of labor, wage rates, and the wage earners’ standard of living tend to rise continually.”
Of course, this is only true of a capitalist economy where private property, free markets, and entrepreneurship and economic freedom prevail. The steady rise in living standards in capitalistic countries is due primarily to the benefits of entrepreneurial risk taking and investment, technological advance, and a better-educated workforce (no thanks to government schools, which have progressively dumbed down the American population). Labor unions routinely take credit for all of this while pursuing policies that impede the very institutions of capitalism that are the cause of their own prosperity and their very existence.
The shorter work week is a capitalist invention because as capital investment causes the marginal productivity of labor to increase over time, less labor is required to produce the same level of output. Or, the same effort can produce more output. As competition becomes more intense, especially in the age of “globalization,” employers compete for the best employees by offering them better pay and shorter hours. Those employers who did not offer shorter work weeks were compelled by the forces of competition to offer higher compensating wages or become uncompetitive in the labor market.
Capitalistic competition is also the main reason for the reduction and, in some societies, elimination of child labor. Young people originally left the farms to work in harsh factory conditions because it was a matter of survival for them and their families. But as workers became better paid—thanks to capital investment and subsequent productivity improvements—more and more people could afford to keep their children home and in school. Union-backed legislation prohibiting child labor came long after the decline in child labor had already commenced.
Moreover, child labor laws were always motivated by a desire on the part of unions to kick young workers, who did not belong to unions, out of their jobs, not to “protect” them. In parts of the Third World today, the alternative to child labor is begging, crime, child prostitution, or starvation and homelessness. Nothing is more hypocritical than labor unions advocating child labor laws while pretending to be motivated by the well-being of children. They are motivated by a desire to monopolize the labor force with unionized labor at the expense of young, non-union workers.
Unions also boast of having championed safety regulation by the Occupational Safety and Health Administration (OSHA) over the past three decades. The American workplace has indeed become safer over the past century, but this was also due to the forces of competitive capitalism, not union-inspired legislation or regulation.
An unsafe or dangerous workplace is costly to employers because they must pay a compensating difference (i.e., a higher wage) to attract workers. Employers therefore have a powerful financial interest in improving workplace safety, especially in manufacturing industries where wages often comprise the majority of total costs. In addition, employers must bear the costs of lost work, retraining new employees, and government-imposed workman’s compensation whenever there is an accident on the job. Not to mention the threat of expensive lawsuits.
Investments in technology, from air-conditioned farm tractors to the robots used in automobile factories, have also made the workplace safer. Unions have opposed many types of such safety-improving technology on the grounds that it supposedly “destroys jobs.”
Unions have long been in the forefront of lobbying efforts to increase the regulation and taxation of businesses, i.e., of capital. Regulation and taxation hamper the market economy, reduce the rate of return on capital investment, divert managerial attention away from management and in the direction of filling out government paperwork, and consequently makes everyone—including unionists—worse off economically. Everyone except for the government bureaucrats whose paychecks are derived from such regulatory regimentation, that is.
The slower productivity growth that is caused by union-supported regulation and taxation of business leads to slower growth of output in the economy, which in turn causes prices in many industries to be higher than they would otherwise be. All of this is harmful to the “workers” who unions claim to “represent” by reducing their real wages. Anti-capitalist propaganda is also anti-worker propaganda.
