The Cancer of Unions

It's Labor Day, a great day to discuss such a politically charged topic as labor. Everybody labors don't they? Isn't everyone a laborer? Sure, but when it comes to politics, what matters is influence, and of all of us that labor, those with the most influence are the labor unions.

The "unionization" of labor is a difficult issue to get figured out. I spent a long time trying to figure out the "morality" of unions. Is a union a good thing? Afterall, don't the unions protect the lone worker and give him a voice? Isn't it true that the "business" is powerful and has the ability to run roughshod over the employee who doesn't stand together with his fellow workers?

After considerable thought, I've come to the conclusion that the union is a cancer that grows in certain unhealthy business environments. A company is, or at least should be, a group of people who share a common vision and have a common goal to provide a product or service to the marketplace in as competitive a manner as possible. The most successful companies are providing their product or service with the highest levels of excellence. As I've said many times in this blog, the free market forces businesses to increase excellence or go out of business.

When workers decide to form a union, they do so because they feel like they are being taken advantage of. I think everyone wishes that they made more and had better circumstances, but some companies are doing a poor job of taking care of their people, and their people inherently know it. A union is a natural result of an unhealthy business culture. I believe that while everyone contributes to a healthy culture, the responsibility for that culture begins at the top. It is up to management to recognize and meet the needs of their people in a way that draws the best out of each of them. It is up to the leaders of that company to model the way, inspire a shared vision, challenge and improve current processes, enable others to act, and encourage the heart. (The Leadership Challenge, Kouzes and Posner, 22) When leaders fail to do these things, employees suffer, and in order to protect themselves, they form unions.

If a business is ideally a group of people gathered out of society with the special skills necessary to build a great product or deliver a great service, then the union is a cancer that destroys the unity of the "body" and pits one part of the business against other parts. As Jesus said, "A house divided against itself cannot stand." The unionized business is a house divided. Rather than management and labor working together as a team pursuing a common vision to be the best in their industry, they are pitted against one another - seeing the opposite side as the enemy rather than the competition, which is the real enemy.

The union is a form of coercion where labor says, "You do things our way or we'll destroy your business." Unfortunately, by destroying the business the union destroys itself. There are many cancerous results of the union. One is the entrenchment of mediocrity. The union typically guarantees advancement to all employees based on seniority rather than excellence. The non-union employee has two powerful tools at his disposal. One is the ability to leave his job and go elsewhere if the conditions and pay are no longer suitable, and the second is the ability to advance based on performance rather than seniority. Both tools are part of what makes the free market system so capable of producing excellence. The union removes both tools. The result is waste and a loss of excellence.

The free market produces the miracles of innovation and productivity that it does because everyone can freely buy whoever has the best product. A man's labor is his product. When he is hired, it is because he offers that product at a price an employer is willing to pay. If either party becomes dissatisfied with the arrangement, either can shop elsewhere for a better deal - meaning, the employer can hire someone else or the employee can find a job somewhere else. This fluidity allows workers to find jobs at the best possible pay and employers to hire the best possible people. Employers demand high performance for their money and good employees demand good pay and good working conditions. Essentially, to get good employees, employers compete by providing good pay and benefit packages. Likewise, to get a good job, employees develop their skill set and protect their resume by having a good work ethic and habit patterns. Both parties bring excellence to the table in this free market arrangement and employer, employee, and customer all benefit.

The union removes these free market forces as they normally apply to labor. Within an industry, it is very difficult for a worker to seek better conditions at another company without starting again at the bottom of the seniority system. The union also makes it very difficult for the employer to retain, develop, and promote those employees with the greatest performance. Therefore, employees cannot seek to improve their lot by shopping for better pay and benefits, likewise, the employer is hampered in his search for more capable employees. The employees have tied his hands. The union employees stop looking for ways to go above and beyond in their performance since all performance requirements are clearly spelled out by the union contract. Mediocrity is the result of the union arrangement.

I am a pilot and within my industry there are both unionized and non-unionized sectors. The airlines are unionized and the corporate and charter pilots are not. As a corporate pilot, if I don't like how my employer treats me, there are other jobs out there at the same or possibly even better pay. It might be painful to change jobs, but at least I'm free to do so if I choose. The airline pilot cannot say the same thing - he is stuck. He either spends a career at the same airline, whether he likes it there or not, or he starts over again as a brand new copilot earning next to nothing with a new company. Consequently, airlines are suffering terribly right now with massive disputes raging in nearly all the major companies, while the corporate world is quite peaceful and healthy.

Sure, wages may be higher and some working conditions may be better in a unionized business, but wages determined by coercion rather than market forces make a company less competitive in the market. The cancer may grow by feeding on the body, but cancer kills, and when the body dies, the cancer dies too. Just look at the American automotive companies, public schools, the airlines, or unionized government sector jobs like air traffic controllers - in each case, performance is mediocre and businesses are increasingly failing.

It's up to management to build strong healthy companies. By doing so a business owner has the best chance of avoiding the cancer of a union. However, it is also up to employees to recognize that their best negotiating tool is their freedom to leave a job. When an employee chooses to give up that freedom and decides instead to form a union with fellow employees to coerce their employer, they have decided that the good of the company as a whole is no longer important to them. In essence, they've decided that they are willing to destroy their employers livelihood, the jobs provided to other employees in other parts of the company, and even to stop meeting the needs of the customers in order to get their way.

The union removes the employer' s freedom to shop for labor that has the best value, and in so doing, is an immoral entity. Like I've said in so many other blogs, freedom permits the most number of people to live in the best possible circumstances. It may not be perfect, but freedom, by far, is the best option we've got.


Technorati Tags: Unions, Labor, Freedom, Free Markets