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Are unions and labor laws always bad?

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Eugene posted on Wed, Dec 8 2010 2:38 PM

In the 19th century most of the factories in western countries have made their employees work for 12 hours a day and more. After a few years of such exhausting work many people had become ill, but then the factories just replaced them with new workers. These short-sighted policies I believe have not only decreased the total economic output but also made a lot of people ill and exhausted.

Although I am not an expert on that period, but it seems to me that unionizing and labor laws have lead to a better economy and well being overall. So despite the fact that unions and labor laws are usually considered anti-Libertarian, I am not convinced it is always the case.

What do you think?

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Suggested by liberty student

"Unions are ineffective without violence.  Until you can prove otherwise, this conversation isn't going anywhere."

At a seminar I attended this past June, the justification for Unions was that if you had people working in two different locations (A and B) in the same industry, people in one location can organize to get similar treatment to those at another.

So for example, if people in Location B are paid 10% more than at location A for doing the same exact thing, people at Location A can unionize and demand a 10% pay increase. If the employer at Location A balks, the workers go on strike until their demands are met. The union WORKS if there is no one else to replace the striking workers, so the employer must agree to the pay increase or lose the business entirely.

I agree though, if violence is used by either party, all bets are off. Also, if the striking workers are replaced by alternative labor, then the very notion of the union is undermined because the origional workers were being compensated more than their productivity actually warrented. This neatly explains why specialized workers traditionally had more success with unions than un-specialized labor who were rather expendable. If someone else is willing to do the work you do at the same or lower wage, unions won't help you unless coercive tactics are applied.

"I am certain that nothing has done so much to destroy the juridical safeguards of individual freedom as the striving after this mirage of social justice." F.A. Hayek
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Wibee replied on Thu, Dec 9 2010 6:41 PM

I am surprised with your response to this liberty student.  collective bargaining and contracts seem a very free market way of dealing with company abuses. 

 

Edit:  Talent and downtime make strike less attractive.  People who know your business and facility are very important. 

If they strike hapazardly and bring down the business, everyone is out of a job.  That is in no one's best interest. 

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Eugene.
Factories in the 19th century didn't make their employees work, they wanted to work that long and under such conditions because it was an improvement for them. Conditions in the countryside were even more backbreaking, why else would people have moved to the cities to get a job in a factories? Society was dirt poor back then and working 12 hours is superior to going hungry. We just tend to compare their working conditions to our current conditions, and not those that went before it. Working in a factory was very desired and a factory workers standard of living would actually be in the upper half of the population.

It was not unions and labor laws that improved conditions; supply and demand did. Capitalists have to compete for labor, and the price of labor (i.e. wages and working conditions) goes up if labor is in increasing demand. Gowing industrialization means that labor is in increasing demand. Laws and unions can force up benefits for some privileged groups at the expense of others, but they do not cause an improvement for society as a whole. They only appear to improve conditions because they tend to come at the same time as improvements in conditions. Actually they make society poorer because laws and unionizing distort the productivity of the economy.

"They all look upon progressing material improvement as upon a self-acting process." - Ludwig von Mises
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In the 19th century most of the factories in western countries have made their employees work for 12 hours a day and more. After a few years of such exhausting work many people had become ill, but then the factories just replaced them with new workers. These short-sighted policies I believe have not only decreased the total economic output but also made a lot of people ill and exhausted

 

You are making the assumption that unions were responsible for higher wages and shorter working hours. In the 19th century prior to the industrial revolution which brought about machinery that enabled workers to be more productive. A shoemaker may have to work 12 hours to make enough shoes to earn a meager existence A farmer without the use of modern tractors and harvesting equipment may have had to toil  12 hours just to feed his family. This same scenario is playing out right now in many 3rd world countries. It isn't because they lack labor unions. Labor unions are not capable of making people more productive. Labor unions can only extort money from employers they don't create wealth. Unless there is a union out there dedicated to increasing productivity and creating wealth for the employer and ultimately their members. I'll have to say they are all bad.

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