Photo: Library Of Congress
I’ve always instinctively hated labour unions.Why?
- They create an “us versus them” culture within companies, instead of putting everyone on the same team
- They restrict flexibility and hurt competitiveness
- They drive companies to move jobs out of the country, to places where there are no unions
- They often become career employment for their leaders, who pay themselves well (much better than the workers they’re representing
- They maintain ludicrous compensation for jobs based purely on seniority (some bartenders in one of the New York hotel unions, for example, apparently make ~$200,000 a year)
- They create a culture of entitlement
And all those are indeed significant negatives.
But we’ve now developed a bigger problem in this country.
Namely, we’ve developed inequality so extreme that it is worse than any time since the late 1920s (just before the Great Depression).
Leaving aside fairness, what this inequality does is hurt the main purchasing-power engine of the US economy–the strong middle class.
(Although the 1% likes to think of itself as investing the capital and “creating the jobs” that employ the rest of the country, this is a consensual hallucination. Jobs in this economy only exist because there are customers who can afford to buy the products. And customers can’t buy products if they don’t have any money. See: Finally, A Rich American Destroys The Fiction The Rich People Create Jobs)
So, for the sake of the economy, we have to fix this inequality problem.
And although correlation is not causation, the chart below suggests that labour unions might be able to help with that, at least in some industries.
Felix Salmon of Reuters just tweeted this chart from EPI, which is based on the work of Pickety and Saez (the deans of inequality research).
The chart shows the correlation between the share of the national income going to “the 1%” with membership in labour unions.
Photo: EPI, Felix Salmon
If companies can’t be persuaded to share more of their income with employees just because it’s the right thing to do, then perhaps labour unions are the only answer.
Right now in this country, we have the painful juxtaposition of the highest corporate profit margins in history, combined with one of the highest unemployment rates in history. We also have the lowest wages in history as a per cent of the economy.
That’s not good for the economy… because rich people can’t buy all the products we need to sell to have a healthy economy (they can’t eat that much food or drive that many cars, for example).
And it’s also just not right.
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