Issues on Trade Unions in the USA - Essay Example

Economics Introduction In numerous countries, a union may obtain the position of a legal entity with a permission to negotiate with employers to uphold and improve wages as well as working conditions for the workers it represents. In such cases, unions have certain legal rights, most prominently the right to negotiate together with an employer (or employers) over wages, working hours and other terms as well as conditions of employment; meaning that such things are not positioned unilaterally by administration, but must be agreed upon by both parties. In numerous conditions, unions do not have such rights and workers may characteristically threaten strikes or other combined action to pressure employers to negotiate. Trade unions are frequently charged of benefiting the insider workers, those having a secure job as well as high efficiency, at the cost of the outsider workers, those who are jobless or at the risk of joblessness or who are not find to get the job that they want in a particular field. The alleged insider-outsider theory studies this problem. Usually, the trivial benefit of an additional worker decreases as the number of workers raise. This entails that the lower the minimum wage, the more workers a company can gainfully employ. Consequently, while an augment in the minimum wage benefits the insiders, consequently fewer new workers are employed and fewer retiring workers reinstated. This effect is more marked in a work-intensive service company (Baker, (2002). The economic examination of a cartel applies totally to most unions, to those that struggle to fix the price of work, to limit supply or to limit rivalry. Conversely, unions often have also other jobs than those of a cartel: they may counsel the workers, warn concerning detrimental contracts or terms of employment etc. These latter purposes are typically considered as valuable for both the workers and for the society all together, whereas the opposite applies to cartel-type minimum terms. Frequently the union on a particular industry puts pressure on politicians to finance the industry concerned. This promotes the companies, workers, shareholders as well as consumers of the product of that industry at a cost to other people. As a result, it depends on the question whether the welfare of a trade union are for or in opposition to the interests of the companies, unemployed, workers, tax-payers or the society all together. Small unions have grown to enormous size; a huge new federation has developed; and now the old American Federation of Labor and its late rival, the Congress of Industrial Organizations, are merged. There have been thousands of strikes, both large and comparatively small--some of them of great importance. There have been political campaigns, both local and national, in which labor has played a role, with great effect on local and national politics. Yet the most significant development in the labor movement does not lie in its organizational growth, its conduct of strikes, or its participation in political campaigns. The most significant development during the past twenty years has been a radical transformation of labors basic goal. The leaders of the movement have always proclaimed, and still do, that their primary objective is the acquisition of sufficient economic power to protect the legitimate interests of the workers. Actually, their primary objective has become the acquisition of political power. The beginnings of this shift in emphasis go back to World War I and the years immediately following. The early years of the twentieth century were for labor organizations largely a period of employer repression, legal restraint, and economic discouragement, with political power used more often against labor than for its benefit. Practically the only federal legislation sought and successfully won by labor was a provision in the Clayton Anti-trust Act of 1914 specifically declaring labor unions were not to be held conspiracies in restraint of trade. It is noteworthy that labor in this provision did not seek the positive action of federal law to stimulate union growth, but negative action designed to protect unions from prosecution under the anti-trust laws. This exemption of unions from the anti-monopoly laws did little immediately to encourage monopolistic growth of labor unions; indeed, the hope that unions would thus be made exempt from anti-trust prosecution proved for many years to be illusory. It was not until the government began promoting and protecting the expansion of union power that the full implications of labors exemption under the Clayton Act became apparent. One inevitable result of this vast expansion in labor union memberships was a great expansion in the ambitions of labor leaders. They became more and more determined to establish absolute control of wages and working conditions in the hands of their collective coercionists, as the possibility of their dictating the terms of labor contracts grew. This was, of course, not an unusual or surprising exhibit of human nature. Businessmen had for many years been increasing the size of their operations until they reached such a point of dominance in a particular industry that they aspired to monopolistic controls to spare themselves the rigors of competition. The labor leaders, who had to fight for many years for the mere right to exist, suddenly found themselves not only complete victors in that fight, but also in a position of dominance in the economic fields wherein they first had sought to bargain and persuade and now found it possible to bully and coerce. That they should bully and coerce was perhaps only natural. That they had models to follow perhaps made their assumption of power easier. But that they should be able, even while they became the oppressors, to persuade the public that they remained the spokesmen for the oppressed was hardly short of incredible. The first essential in dealing with the evils that arise from labor union monopolies is to recognize that the monopolies exist. The second essential is to understand that it is the exercise of monopolistic powers that perpetuates union evils and makes their correction so difficult. The third essential is to realize that any monopoly power is destructive of a free economy and the political-economic freedom of a free society. It has been a significant error of many true liberals to assume that a labor union monopoly might be beneficent (Welch, 2004).. It seems worth while to retrace our steps and to call attention to the unwisdom of all the steps taken by the federal government to legalize and encourage the creation and exercise of monopoly powers by labor unions. This began in the Clayton Act of 1914, which in itself sought reasonably to extend relief to labor organizations from unfair and often partisan interpretations of existing laws. A labor union could easily be found to be a combination in restraint of trade, although designed and operated only as a method of reasonable cooperation among many persons to advance their common interests (Hellowell, 2003). It was recognized, however, that all unions and all union activities could not be given a wholesale immunity from anti-monopoly laws, because unions might easily become the means of nullifying all these laws. So the Clayton Act carefully provided only immunity from anti-trust prosecution for organizations "lawfully" carrying out their "legitimate objects." Obviously, the authors of the Clayton Act and the Congressmen who voted for it had no expectation that the Supreme Court would hold that a union engaged in a sit-down strike was "lawfully" carrying out its objects. Nor was there an expectation that the Court would hold that writing contracts to monopolize the sale of electrical goods in New York City was a "legitimate object" of union activity. Yet we have seen that the Supreme Court, combining later laws with the Clayton Act, has established such sweeping immunities for labor union monopolists. It would need very little legislation, very simply worded, to restore the original Clayton Act limitations. For the benefit of a Supreme Court majority which overrules the dictionary as well as itself, the word "lawfully" could be defined so that unlawful conduct would not be immunized. Careful definitions could be written in the law explaining what are "legitimate objects" of union activity. Thus a majority instead of a minority of the Supreme Court might be induced to hold that violations of anti-trust laws and monopolistic contracts clearly in restraint of trade are not "legitimate objects" for a labor union to pursue. The legitimate objects of labor organizations are defined to include the organization and concerted activities of employees in protecting and promoting their interests in reasonable wages and working conditions, by any peaceful and lawful means, but shall not include the creation and exercise of such monopolistic controls over industry, trade or commerce among the several States, or with foreign nations, as to limit substantially competition in prices or quality of products or services, either nationally or within a local marketing area; and shall not include the making of agreements with employers providing that union membership shall be a condition of employment, whenever or wherever the consequence of such agreements shall be to threaten to give or shall give to a labor organization a monopolistic control over employments in an entire industry within the United States, or within one of the several States. Lawfully carrying out the legitimate objects of labor organizations is hereby defined to include any activities of a peaceful, orderly character which are not forbidden by any law of the United States or of the locality within which they are carried on, but shall not include any uses of fraud, force, violence or intimidation, or any conspiracy to violate or to prevent enforcement of any law of the United States or of one of the several States. The first definition is intended to eliminate from the legitimate objects of the labor organization the uniform negotiation of contracts which have the inevitable effect of substantially limiting competition either nationally or within a local marketing area. It also excludes from a legitimate object the making of closed shop or union shop agreements which give a labor union a monopolistic control over employments (Welch, 2004).. The second definition is intended to carry out the vigorous dissents in the Supreme Court against a construction of federal law which leaves the government helpless to prevent the use of fraud, force, and violence as a deliberate policy of concerted action (Welch, 2004). To restore the power of judicial enforcement of the anti-trust laws against labor unions, there should be added to the foregoing definitions a provision to the effect that the jurisdiction of any court of the United States to issue an injunction against a labor organization or its members who are found engaged in conduct which is not "lawfully carrying out the legitimate objects" of such an organization, shall not be restricted by the Clayton Act or the Norris-LaGuardia Act. Even with "lawfully" and "legitimate" defined for an apparently illiterate judiciary there would still be the possibility of a long series of confusing decisions and opinions which would be troublesome alike to public officials and to labor unions. Of course, the mere existence of a labor organization with over a hundred thousand members carries with it a financial, economic, and political power that threatens monopolistic controls of industry. On the other hand, the concentration of money and employment power in huge corporate enterprises offers the same threat. If size is not to be a measure of legality in business management it should not be made a measure in labor management. It does seem, however, that the managers of union labor should be restricted to a law-abiding use of money and man power. They should not be free to attack physically and to terrorize either employers or employees who do not yield submissively to the coercion of a strike. If economic violence is to be left the final arbiter in labor relations, at least it should not be supported by legalized or legally tolerated, physical violence and intimidation. There are many reasons for one to prefer state laws and state enforcement to eliminate the brutalities and lawlessness of strike violence. Such violence should be corrected, as other crimes are, primarily by local law-making and administration. Certainly the federal government should not "preempt" this field so as to exclude state action. But there are many ways and places where federal law could helpfully supplement --but not be substituted for--state law. The federal government already deals with such a vast field of labor relations, by virtue of Supreme Court expansion of the commerce clause, that it should no longer be possible for a federal court to avoid meeting the issue of the lawless conduct of a strike in a case within federal jurisdiction. What is most needed at the present time is not the drafting of a lot of laws that will curb the economic and physical violence of labor union activities. What is most needed, and first needed, is an education of the so-called intellectual stratum of American life to a clear-eyed comprehension of the grave menace to our free economy and our free government in the unchecked growth and continuous spread of labor union monopolies. Conclusion Part of the monopoly power of labor unions arises from favoritism in legislation; part, from an unwarranted extension of this favoritism by Supreme Court interpretations; and part, from the timidity, unwillingness, or incapacity of local police officers to enforce the criminal law as it is applied to every other individual or organized violence except that occurring in a strike. These evils will not be remedied until an overwhelming majority of free citizens realize that labors economic monopoly and political power are preparing the way for communism far more effectively than the communists themselves. It is natural that union propaganda still portrays the unions as weak, defensive organizations of helpless wage earners who are forced to wage a continuing struggle against the ever-threatening oppression of great aggregations of heartless capital. As a matter of fact, the unions are powerful, aggressive organizations that are engaged in a continuing warfare against the maintenance of a free competitive economy. Unless this civil warfare is stopped and peaceful competition is substituted for monopolistic coercion in labor relations, a socialized economy and a socialist labor government are inevitable. This, unhappily, is not a remote prospect but one that is rapidly developing. Reference: Baker, Paddy. (2002). State of the Unions. Works Management, Vol. 55 Issue 5, p14, 3p. Hellowell, Mark. (2003). Peace breaks out in the labour movement. Public Private Finance, Issue 71, Welch, David. (2004). A Breakthrough For Labor. Business Week, Issue 3894, Read More