PowerLine Celebrates Return Of Serfdom
In Labor’s Armageddon, Steven Hayward boasts that Public-employee unions in Wisconsin have experienced a dramatic drop in membership—by more than half for the second-biggest union—since a law championed by Republican Gov. Scott Walker sharply curtailed their ability to bargain over wages and working conditions.
I’ve written before about how the middle class is losing the class war. I contend the demise of American unions has played a large role in this. Most people seem to believe that unions are unnecessary since we have so many worker protection laws today. But there are also at least two other major functions that unions serve:
1. They negotiate better wages.
Most employees don’t have the time, knowledge or power to effectively negotiate better pay. Management has a big incentive to keep workers wages low. When there isn’t significant push-back from workers, they tend to get their way. Of course, then they reward themselves with huge bonuses for increasing the company’s profits!
2. Unions help to balance the influence of corporations on government policy.
Look at our relationship with China, for example. They have unilaterally set their currency significantly below where it should be to ensure a competitive advantage over American manufacturers. They also don’t have many of those pesky worker or environmental protection laws – yet we engage in free trade with them? Why? Of course corporations love it, it increases their profits and gives them justification for keeping American worker’s pay low. After all, we have to be “competitive”! But imagine if unions had as much influence over policy as corporations do. Would we be engaging in “free trade” with China? I don’t think so.
The engine of our economy is the middle class – they are the true job creators. As successful venture capitalist Nick Hanauer put it:
Even so, I’ve never been a “job creator.” I can start a business based on a great idea, and initially hire dozens or hundreds of people. But if no one can afford to buy what I have to sell, my business will soon fail and all those jobs will evaporate.
That’s why I can say with confidence that rich people don’t create jobs, nor do businesses, large or small. What does lead to more employment is the feedback loop between customers and businesses. And only consumers can set in motion a virtuous cycle that allows companies to survive and thrive and business owners to hire. An ordinary middle-class consumer is far more of a job creator than I ever have been or ever will be.