Do Unions Support Economic Freedom?
When I was a high school senior I was blessed to have an economics teacher that made us read The Wealth of Nations by Adam Smith. The book is set in the 1700’s and through reading it I learned the basics of the free market, capitalism, and the concept that self-interest drove the rancher to raise pigs in order to trade meat with the baker for bread to feed his family. That same self-interest incented the rancher to raise enough chickens to barter with the blacksmith to shoe his horse, and to exchange for wood with the woodcutter to build a house for his family. Each of these parties instinctively participated in capitalism, as they believe they received equal or greater value in exchange for what they gave up.
Instinctive economic self-interest, not selfishness, drove all members of the community to create wealth by building and providing to each other goods and services. This is the foundation of all economic growth.
Fast-forward a few years during the summer of my junior year in college at the University of Minnesota. That summer I was fortunate enough to land a great job as a temporary driver at a local Coca-Cola bottling plant. During the summer months when the regular route drivers took vacations, they needed temporary drivers like myself to fill in and drive a different route each week. Each morning I would arrive by 5:15 A.M. at the plant; my truck was fully stocked with bottles and cans of Coca-Cola products and I was given my manifest and delivery schedule for the day. I was on the road by 6:00 A.M. to deliver bottles or cans to dozens of grocery stores, gas stations and convenience stores. For my efforts, I was paid a very good hourly wage while I was delivering product on my route.
Of course being a 20 year old college student meant that I had other interests besides driving a delivery truck all day long. I was courting a beautiful young woman who would one day become my wife, enjoying the lakes of Minnesota, playing softball and of course enjoying a malted beverage or two.
Given I had many other interests, I taught myself how to be as efficient as I could in driving the route, unloading products, stocking shelves and getting the appropriate paperwork signed by each customer. As a result, within a couple of weeks I was finishing my route earlier each day so I could attend to my other interests. By the third week I was really flying and getting back to the plant by about 2:00 P.M. each day and was proud of the fact that I was the first driver back each day.
Then after a few days of being the first driver back, I started to ask myself how could a rookie driver be back first? As a 20 year old temp I had a new route everyday while all of the veteran drivers had been doing the same job on the same routes for years. It didn’t make any sense to me. If I could be done by 2:00 P.M., on an unfamiliar route why were all the experienced drivers getting back hours later?
During the 4th week I found out why.
I was walking across the parking lot to my car one day around 2:00 P.M., a man walked up to me and shouted; “What are you doing!” I recognized the man who was dressed in the same uniform as mine, but I couldn’t quite place his role other than he seemed to be some type of head of the drivers. I replied “done for the day, going to see my girlfriend.” He stepped up his pace towards me and within seconds was inches from my face.
“What’s your name son?” he snapped. “Tom” I said, a little bit intimidated. “Well Tom we need to talk” he belted, “You see, that is not how we in the union operate here. You don’t get to leave early just because you are done with your route. You will make the rest of the guys look bad.” I immediately sensed where this was going.
“But I am done with my route,” I said. “Everyone in the union needs to stick together and work the same amount, otherwise some of the drivers will look lazy or unproductive. We got a good thing going here and don’t need some young hot shot ruining it for us. So from now on you just take your time and get back here after 4:00 P.M. each day and you and I won’t have this conversation again. Understood?” Now being the wise-ass 20 year old I was at the time, I replied, “and what if I do come back before 4:00?” He then took his very fat finger and jammed it onto my chest and said “you won’t like the consequences son, trust me.” And he walked away.
Taking his advice, and not wanting to lose my job (or worse), I never returned before 4:00 P.M. the rest of the summer. I took my time on my route. I hung out and made small talk with shop managers after I had made my delivery, and sometimes just sat in the parking lot down the road from the plant listening to the radio. After all, I was getting paid by the hour, so I might as well take my sweet time!
Capitalism is an economic system of trade in which all trading partners believe they receive equal or greater value in exchange for what they give up. Coca-Cola was the trading partner with me (I got money and they got labor). But, the bottling plant did not receive an even or better exchange by paying me to sit in the parking lot down the street. This was not an equitable exchange, and was not capitalism. The result of course, was that the bottling plant over paid me for my services (as well as all of the other drivers). And who do you think paid those inflated delivery costs? Well if you drink Coca-Cola or Sprite, probably you!
My experience 30 years ago with the union boss has had a profound impact on my business career, my view on capitalism, and free enterprise. Although I never worked in a unionized environment again, I have witnessed, as a consumer, the effects of unions on certain industries. Have you?
Has one of your children ever had a really bad teacher, but neither you nor the local school board had the ability to correct the problem because the teacher was protected under the union contract? Have you ever manned a booth at a trade show in New York City and been told you couldn’t plug your computer into the electrical outlet yourself and that only a union electrician at $135 an hour was allowed to? Have you ever waited on the airport tarmac for more than an hour for a union mechanic to replace a light bulb in the bathroom because the flight attendant couldn’t replace it, as that wasn’t their job?
Back in 1906 Upton Sinclair published the shocking book The Jungle, which depicted the terrible working conditions at Chicago meatpacking houses. This book is credited by many as being the catalyst for union success in the USA. Organizing labor at that time was a great thing for the workers, and even the business itself. In those days the Federal Government was miniscule compared to today and there was no one to watch over and regulate the food and other industries. There was no OSHA, no USDA inspectors, no child labor laws, no minimum wage and so on. Now that we have hundreds of Federal, State and Local government agencies watching out for workers by enforcing thousands of laws and regulations, are unions still necessary?
From my experience the original, admirable purpose of unions in the U.S. has been replaced with a system run by highly paid union bosses focused on artificially driving up labor costs, and of course lining the leaders’ pockets with the members’ dues. Look at the U.S. automobile industry as a classic case. Higher than market wages, golden health care plans, resistance to automation, and outrageous pensions demanded by the unions, have resulted in the crippling of one of our greatest industries.
As you watch the recall activities in Wisconsin in the coming months, ask yourself if the people behind the recall efforts are supporting capitalism and economic freedom. Or is there something else behind their motivation…
Now is the time to examine the motives of unions, and their political supporters at both the federal and state levels. Ask tough questions, dig deep, and follow the money trail. Most of all, follow the lead of Wisconsin voters in their last election, and put into office Candidates who will end the crippling effect of union coercion on our government.