The Failure of Government Intervention: Buy Union this Christmas

This Christmas, we are being told to buy from Costco, not Wal-Mart; to ship our presents via UPS, not FedEx; to avoid the Lexus and buy a Ford; to drink Budweiser beer and Eight O’Clock Coffee, but only from Kroger or Farmer Jack.

Why should we do this — because of fair prices for good products? The best value? Service? Convenience? Not according to Teamsters union President James P. Hoffa.

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According to Mr. Hoffa, we should purchase certain items because we need to support union labor; we need to give "the gift of good jobs." This sounds nice and Christmassy, but we must remember that labor is work, rewarded by compensation. A gift is, by definition, something unearned. The mere fact that organized "labor" feels the need to ask for this gift is evidence of a colossal failure of government intervention in employer-employee relations.

There is nothing conceptually wrong with employees organizing their labor. A free society should allow people to voluntarily band together to bargain with their employers over terms and conditions of employment. This actually was the original foundation of unions – skilled tradesman upset with low wages joining forces to better their situation. In concept, organized employees should be able to say to an employer that in exchange for a good contract with secure terms, they will provide a better product or superior service. But this is not the current system in America; government intervention has tipped the scale. Union labor in the United States has become not an exchange of labor for reward, but a government-sanctioned system of coercion of both employees and employers.

In the United States and in Michigan, labor law provides that if more than 50 percent of workplace employees vote in favor of certifying a union, this union becomes the representative of every worker. If a "unionized" employer should attempt to contract with one of the employees who is not interested in joining the union, that employer would be breaking the law. Forced collective bargaining over work rules, schedules and benefits consumes enormous resources and creates numerous inefficiencies. But more than that, the union can require dues or fees from every employee — even those who do not want to belong — to fund the union’s ongoing operations, strike account and internal political work. This dues-funded system puts great pressure on employers to capitulate to the demands of the union, even to the point of economic disaster. This has not escaped the notice of employees.

American workers are not assigned a place of employment; no one is forced to work at Wal-Mart. It is telling that less than 8 percent of private sector employees have chosen to work in a labor union environment. Because such decisions are voluntary, the cries by union bosses that employers are hostile to union organizing ring hollow.

Toyota, Wal-Mart and the vast majority of employers and employees in the United States have found that when employers simply respect employees both in pay and working conditions, the result is a successful product at a reasonable price. By avoiding the pitfalls of a law that over-leverages unions, these firms can pay for merit and innovation, free from restrictive union work rules, pay schedules and forced dues. In essence, they can harness and respect the creativity of their individual employees in ways that the union’s group-think system cannot. Employers and employees both benefit in this relationship.

Organized labor is in a crisis. Its membership is in decline. Unionized employers like GM, Ford and Chrysler are struggling to retool in the face of stiff competition from other car and truck makers in America, such as Toyota and Honda. How do unions respond? With calls for even more government intervention by forcing firms and workers to accept unions without first conducting a secret-ballot election, and with a pathetic holiday plea to the American public to buy union, regardless of value, as if products from unionized employers cannot stand on their own merits.

Systems based on free-market principles take into account the unique circumstances of individuals and their particular gifts and talents, resulting in unsurpassed prosperity. The best gift this Christmas would be for organized labor to say to its dues-paying members: "You know, this is not working. We are going to shift to an organization based on skill and quality, not an organization predicated on government force — and by the way, here is a refund of your dues." What a gift that would be, to all of us.


Thomas W. Washburne is director of labor policy for the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the authors and the Center are properly cited.