It's not the Unions -- it's the Labor Laws
Despite two years of courting by the United Auto Workers union, Volkswagen employees in Chattanooga, Tennessee, recently rejected UAW representation in a 712 to 626 vote. This is a major blow to organized labor, whose numbers are dwindling. “When you see what the UAW did in Detroit, you have to worry about what it will do here,” says Mike Burton, a leader among VW workers who opposed the union.
Burton’s distrust of the UAW reflects the broader history of union antagonism toward businesses. Unions are infamous for bogging down businesses with counterproductive work rules, damaging industries with frequent strikes, instilling an “us versus them” attitude among employees, and strong-arming employers into giving more and more raises and benefits regardless of the long-term consequences to the company.
Why can unions get away with such hostility?
Unions per se are not the problem, but it is a problem that labor laws grant unions coercive powers they wouldn’t otherwise have. If labor relations were completely voluntary, then business leaders would not be forced to submit to unreasonable demands from unions, and business leaders and employees would be protected from union interference and harassment if they choose to work in a nonunionized environment.
Today, however, the government does not protect employers from such things. Instead, it forces employers to deal with unions through the National Labor Relations Act of 1935 -- also known as the Wagner Act. This law forces business leaders to recognize a union as an exclusive bargaining agent if the union gets enough votes, forbids them from disassociating with any union, and legally requires them to negotiate with such unions “in good faith,” as determined by National Labor Relations Board judges.
In practice, the Wagner Act allows unions to make unreasonable demands, and forces business leaders to choose between caving in to some of these demands and facing costly and time-consuming litigation. Hence, the United Steel Workers can strong-arm steelmakers into accepting work rules that require several men to complete tasks that could easily be done by one. The UAW can pressure Chrysler into reinstating employees who were fired for drinking alcohol and smoking pot on the job. The International Longshoremen’s Association -- a union of dockworkers -- can get away with threatening to shut down ports across the East Coast if shippers ceased paying “container royalties,” which are essentially bribes paid to union workers since the 1960s in exchange for not fighting the introduction of shipping containers. The Bakers’ Union can refuse to work out a mutually agreeable solution with Hostess, despite the dire realities of the company’s financial situation, and instead push the whole company to liquidate. For many businesses, having a union means being trapped in a relationship with a partner who can be utterly shameless about seeing how much they can get away with at your expense.
And unions wield their government-granted coercive power against employees. They can force all employees to pay union dues, even the ones who strongly object to the union’s goals, policies, and attitude. The International Association of Machinists -- a union representing Boeing employees in Washington State -- can try to legally forbid Boeing from giving manufacturing jobs to nonunion workers in South Carolina, by agitating for an NLRB lawsuit. The United Food and Commercial Workers can force the supermarket Giant Eagle to rescind pay raises it gave to outstanding employees, demanding they be compensated the same as those who don’t go the extra mile.
In a world in which labor relationships were completely voluntary, unions would have to work with employers if they want to be welcome in a factory, and they would have to offer values to employees if they need to retain members. But today, because the government forces businesses to deal with them, unions can get away with antagonizing employers and employees.
The rejection of the UAW in Chattanooga should prompt us to recognize how coercive labor laws can allow a union to poison relationships between business and labor.
Doug Altner is an analyst and instructor at the Ayn Rand Institute.