Blogs > Liberty and Power > "Change to Win" or "Pay to Play"?

Dec 28, 2008 9:19 am

"Change to Win" or "Pay to Play"?

Governor Rod Blagojevich’s alleged scheme--that he would appoint a union-friendly Senator to Obama’s vacant seat, and receive in return the national directorship of the “Change to Win” labor federation—-and the upcoming “card check” battle in Congress have one thing in common: They remind us that unions are political, not economic institutions. Congress gives unions the power to recruit members, who then vote for the party that empowered them.

There is a hoary myth in American labor history of “privatism”—that, unlike the European labor parties, American unions have only asked to be left alone by the state, and to exercise their economic power to improve labor standards. They have eschewed partisan activity and instead focused on “bread-and-butter” issues—-wages, hours, and working conditions (later, pensions and health care). They often quote American Federation of Labor official Adolph Strasser’s quip that the American Federation of Labor “has no ultimate aims.” (Less often do we hear A.F.L. President Samuel Gompers, who said that trade unions shared “certain ultimate ends, including the abolition of the wage system.”) The left has long lamented this, that American labor has such a narrow, “business unionism” outlook, and has not sought to transform American society.

This myth had some basis in the history of A.F.L. craft unionism, when it broke away from older, broad-based movements like the Knights of Labor, but even here the federation was far from apolitical. They supported protective tariffs because they believed they would raise the wages of American workers. Though ambivalent about European immigration restriction (so many being themselves immigrants), they did vigorously support “Oriental” exclusion. Renowned labor historian Selig Perlman called the Chinese Exclusion Act of 1882 “doubtless the most important single factor in the history of American labor, for without it the entire country might have been overrun by Mongolian labor, and the labor movement might have become a conflict of races instead of one of classes.”

Above all, unions sought special exemptions from prosecution as conspiracies in restraint of trade under the antitrust laws and from injunctions during strikes, so that they could be free to picket—-though, as law professor Sylvester Petro has shown, every labor injunction but one in American history followed some kind of union violence or intimidation.

Over time, the A.F.L. became more and more statist, moving toward the Democratic party in 1908. As United Mine Workers President John Mitchell put it, “The trade union movement in this country can make progress only by identifying itself with the state.” They began to win their first legislative victories (antitrust and injunction exemptions, as well as railroad union power) under Woodrow Wilson. The government pressured employers to recognize and bargain with unions during World War One, and union ranks swelled. When government promotion ebbed after the war, so did union ranks.

The breakthrough and most obvious illustration that the success of union organization depended on government promotion came in the New Deal. It had begun even under Herbert Hoover, who signed the Norris-La Guardia Act, which restored the antitrust and injunction exemptions that had eroded in the 1920s, and declared that “the individual unorganized worker is commonly helpless to exercise actual liberty of contract and to protect his freedom of labor, and thereby to obtain acceptable terms and conditions of employment.” Before the Supreme Court declared it unconstitutional, the National Industrial Recovery Act (a 1933-style “bailout”) required industries that received government benefits to engage in collective bargaining, albeit not explicitly enough for unions.

The dam finally broke with the National Labor Relations (Wagner) Act of 1935, which established the principles of compulsory unionism (employers must bargain with organizations chosen by a majority of their workers) and majority unionism (that union represents all workers, even those who did not vote for it). This was true even if the union was racially exclusive, which led National Urban League President Lester Granger to call the Wagner Act “the worst piece of legislation ever passed by the Congress.” The organization of industrial unions—the unskilled workers of the auto, steel, rubber and other industries—into the Congress of Industrial Organizations could not have succeeded without it. Wartime government pressure again swelled union ranks during the second world war.

The abuses of government-delegated power became acute in the postwar years, leading unionists to label even the liberal President Harry S Truman a union-buster. It led Congress to clip the wings of unions in the Taft-Hartley Act, which remains the basic template for American labor relations law. Even so, ten years later Roscoe Pound, the Harvard Law School dean who had been a famous progressive champion of labor rights, observed that unions were free to commits torts against persons and property, interfere with the use of transportation, break contracts, deprive people of the means of livelihood, and misuse trust funds, “things no one else can do with impunity. The labor leader and labor union now stand where the king and government . . . stood at common law.” He feared that unions posed “a despotic centralized control.”

In the ensuing decades, the costs of American labor law and global competition began to erode the union base. During the last severe recession, of 1979-82, the ranks of many powerful unions were halved, and one of every seven American manufacturing jobs were lost. The Change to Win leaders—-Andy Stern and the Service Employees especially--seek government power to reverse this trend. They broke away from the A.F.L.-C.I.O. because the old federation was not politically effective enough. The C.T.W. leaders recognize that the only way to recruit new members—-and Democratic party loyalists-—is via legislative privileges.

Public employees have long recognized this. The teachers union worked hard to elect Jimmy Carter, and were rewarded with the creation of the Department of Education, which zealously promotes the interests of the N.E.A. When it was created, N.E.A. leaders offered a toast to “the only union that owns its own cabinet department.” The nexus here between politics and union power could not be clearer, and the C.T.W. coalition is simply following this successful strategy.

The abolition of secret ballots in union elections and, still more, the compulsory arbitration that the card-check law would impose will certainly not help American workers or the American economy. Unionization simply shifts wages from one group of workers to another. Economists Richard Vedder and Lowell Gallaway have estimated that unions cost the American economy $3.5 trillion from 1947 to 2000, or about forty percent of the 2002 GNP. This means that even unionism makes even union members worse off economically.

The union argument is that “everything is political” and that unions are an appropriate countervailing force to the power of big business, which itself benefited from government support, and to redress growing income inequality. If that’s the case, the proper response is to reduce rather than extend government favors. And, if our goal is to “spread the wealth around,” there are easier and more efficient ways to do it than union promotion.

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Russell Hanneken - 12/29/2008

Excellent post, Professor Moreno. Left-libertarians, I believe the ball is in your court.