The View From 1776

Labor Unions: Double-Edged Blade

Liberals see labor unions through rose-colored glasses.  Reality is somewhat different.

Tuesday’s edition of the Stamford Advocate, my local newspaper, has a front-page article about actor-director Tim Robbins’s attempt to revive public interest in his 1999 film “Cradle Will Rock.”  Mr. Robbins, a resident of the adjoining Westchester County town of Pound Ridge, spoke to a Stamford audience the night before at the Avon Theatre Film Center on Bedford Street.

Mr. Robbins’s movie, according to the Wikipedia:

... chronicles the process and events that surrounded the production of the original 1937 musical The Cradle Will Rock by Marc Blitzstein. Tim Robbins, in his third film as director, adapts history to create this fictionalized account of the original production, bringing in other stories of the time to produce this commentary on the role of art and power in the 1930s, particularly amidst the struggles of the 1930s labor movement and the corresponding appeal of socialism and communism among many intellectuals and working class people of that time.

Mr. Robbins’s evidently identifies emotionally with labor unions of the 1930s and sees business as a source of evil. 

In a speech given at an antiwar rally in New York City’s Central Park on October 6, 2002, he said:

Let us find a way to resist fundamentalism that leads to violence—fundamentalism of all kinds, in Al Qaeda and within our own government. What is our fundamentalism? Cloaked in patriotism and our doctrine of spreading democracy throughout the world, our fundamentalism is business, the unfettered spread of our economic interests throughout the globe. Our resistance to this war should be our resistance to profit at the cost of human life. Because that is what these drums beating over Iraq are really about. This is about business.

Mr. Robbins’s view is straight out of the Socialist International’s appeal to the “workers of the world” to boycott World War I, on the theory that wars result only from capitalists struggling for monopoly market power, using the blood of the workers to achieve their goals.

In socialist doctrine, economic forces are the only factors having meaning for political societies.  The essential feature of that doctrine is that all elements of society must be organized to control production of economic goods.  From the very beginning of socialism as a cogent theory, Henri de Saint-Simon pictured the transition to socialism as one of conflict between capitalistic business owners and the workers. 

Thus labor unions are absolutely essential to socialism as the organizing mechanism of the entire labor force.  Unions are the heart of politics, which has no goal other than production by Marx’s “workers of the world.”

In the 1930s period of Mr. Robbins’s movie, industrial unions first became major factors in our economy.  The results then and now have been, on the whole, negative for the United States. 

The springboard for socialistic industrial unions was the New Deal’s 1935 Wagner Act (National Labor Relations Act), which stacked the bargaining cards in labor’s favor.  Overnight, unions were able to employ almost any sort of coercive tactics against businesses, without fear of legal prosecution. 

Unions could legally seize private property and prevent businesses from operating.  They could prevent all workers from entering private businesses and could stop deliveries of all supplies, including food, to those businesses.  Having been exempted from anti-trust prosecution, unions could organize mass boycotts and demonstrations to prevent people from buying products of companies that they targeted.  And they did not hesitate to resort to violence to implement such tactics.

In 1936, business enjoyed its only significant rally under the Depression-era New Deal.  That rally came as a result of the Supreme Court’s declaring the National Recovery Administration (NRA) unconstitutional.  The NRA had been the most onerous of President Roosevelt’s agencies patterned on Mussolini’s Fascist state corporatism.

The rally was shortly thereafter curtailed by the onslaught of union tactics that caused a surge of labor costs.  Unable to raise prices to offset higher labor costs,  major industries found production essentially unprofitable.  By the end of 1936 and into 1937 industrial production turned sharply downward, precipitating a stock market crash as severe as that of 1929.  Business never recovered until the nation began gearing up in 1940 for the probability of participating in the European war.

Automobile manufacturing was the union’s first and main target in 1936.  Then and after the end of World War II, industrial unions exacted extremely high wages and supplemental benefits for their non-skilled laborers.  In the brief period before European and Japanese industry recovered from the war and began exporting to the United States, automobile production costs were pushed completely out of line with those in the rest of the industrialized world.

Japanese auto makers today gain a profit of about $2,000 per vehicle sold here (a great many of them manufactured here by non-union labor).  General Motors, Ford, and Chrysler, in contrast, lose about $1,200 per passenger sedan made and sold in the United States.  They have roughly $2,500 more per vehicle in labor costs than Japanese auto companies manufacturing vehicles in the United States. 

Despite union boasts about union labor being better than non-union labor, the public finds the Japanese products to be of higher quality than the Big Three union-made variety.

General Motors, Ford, and Chrysler are now teetering on the precipice of bankruptcy, with intransigent unions heedlessly pushing them.

Labor unions have benefited a limited portion of the American work force and they have been the principal financial and get-out-the-vote engine for their sponsors, the Democratic Party.

But it has been at tremendous cost to the rest of the nation.

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