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Townhall...
Improving Life for
Workers
by John Stossel
May 30, 2012
It seems intuitive that a free market would lead to a “race to the
bottom.” In a global marketplace, profit-chasing employers will cut
costs by paying workers less and less, and shipping jobs to China.
It’s a reason that progressives say government must step in.
So America now has thousands of rules that outlaw wages below $7.25 an
hour, restrict unpaid internships and compel people to pay union dues.
These rules appear to help workers. But they don’t.
“Collective bargaining” sounds good. Collective bargaining “rights”
even better. Employers are more sophisticated about job negotiations
than individual employees, so why shouldn’t workers be able to join
together to bargain?
They should be. But in 27 states, labor laws force workers to join
unions. When CBS offered me a job, I had to join AFTRA, the American
Federation of Television and Radio Artists. I didn’t want to. I don’t
consider myself an artist. I didn’t want to pay dues to a union that
didn’t appear to do much. But I had no choice.
Laws that force workers to join unions treat millions of diverse
people, most of whom want very different things, as undifferentiated
collectives. That means that good workers get punished.
When I was at ABC and CBS, union culture slowed us down. Sometimes a
camera crew took five minutes just to get out of the car.
But without a minimum wage or union protection, wouldn’t employers
abuse workers? In a real free market, no, they can’t. Because workers
have choices. Employers have an incentive to maintain a good
relationship with employees -- one that keeps them reasonably loyal --
because workers can quit and go work for a rival.
If globalism leads to a “race to the bottom,” why do 95 percent of
American workers make more than minimum wage? It’s not because
companies are generous, but because competition forces them to offer
higher wages to attract good workers. Companies may move jobs overseas
to escape high U.S. wages (or U.S. taxes and regulations), but they
clearly prefer to keep jobs here, close to their headquarters,
suppliers and customers.
Unions once helped advance working conditions, but now union rules hurt
workers because they stifle growth by making companies less flexible.
When I arrived at CBS, I was stunned to discover that I couldn’t even
watch a video in a tape player without risking a grievance being filed
by a union editor, saying I’d encroached on his job. Work ground to a
halt while we waited for a union specialist to press the “on” button.
ABC and CBS, being private businesses that had to compete, eventually
got rid of those rules. But it took years.
Unions eventually hurt union workers because unionized companies
atrophy. Non-union Toyota grew, while GM shrank. JetBlue Airlines
blossomed, while unionized TWA and Pan Am went out of business. Unions
“protect” workers all the way to the unemployment line.
When I criticize compulsory unions and regulations, it’s not because I
want rich employers to get fat off the labor of workers. It’s because
I’ve learned that markets are fluid -- and the best way for more
workers to find good jobs is to leave everyone free to make any
contract they wish.
Outlawing the low-wage job that taught a teenager skills or the
internship that gave a kid a foot in the door doesn’t insulate people
from hardships of the market. It insulates them from knowledge about
how to function in an ever-changing economy.
That’s not compassion. That’s a denial of reality.
Advocates of “kind” central planning overlook the gradual, piecemeal
improvement that markets make. Focused on government’s promise of
once-and-for-all solutions (promises that rarely lead to actual
solutions), people miss how free markets gradually help humanity solve
problems.
Economic historian Robert Higgs joked that it will always be easier to
rally politically inclined people behind unrealistic, revolutionary
causes than to rally them around subtle economic progress, because no
crowd marches behind a banner proclaiming, “Toward a Marginally
Improved Society!”
The best way to help workers is to get the government to butt out and
let competitive markets work.
Read this and other articles at Townhall
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