Property and Labor

Opining on the labor uprising, Bob Herbert writes for the NYT:

When you talk to the workers who are hurting most in this epic downturn, they are overwhelmingly out there on their own. No one has their back. The corporate community and the politicians who do their bidding know better than anyone else that workers who are not organized are most often helpless. They have no leverage. They cannot demand raises or health and retirement benefits or paid vacations or sick leave. They cannot negotiate shorter hours or better working conditions. It’s the boss’s way or the highway.

Workers have been denied their rightful share of productivity gains.

Let’s ignore the fact that an outstanding percentage of the increase in productivity over the past century or so is due to technological advances. What concerns me most is Mr. Herbert’s belief, shared by many people, that employees have a “rightful share of productivity gains.”

The only rightful share an employee has is to his previously agreed to wage. Once hired, a person provides services and is monetarily (or otherwise) compensated for them at a rate, sans government meddling, determined by the market. He no more owns any property of his employer than he did before being hired. Public sector unions are no different; the employer is the taxpayer and the employees provide the necessary services that make up the system of government. The government, as an employer and liaison of the citizens, competes in the same labor market as the private industry.

Regarding the power of negotiation, George Mason University economics professor Russ Roberts puts it aptly:

You want negotiating power? Get educated. Get a skill. What keeps wages up in a world of 7% unionization in the private sector is that I have alternatives. So stay in school and study something serious that has value alongside whatever else you’re interested in. Or study something interesting that has little market value. But if you do that, don’t complain about your low salary and lack of a union.

The bottom line–you don’t need a union to protect you from your employer. You need alternatives–you need to have a skill that more than one employer values. If you have no skills, you are in trouble and the union won’t help you either except at the expense of other workers.

The computer that you use for for work  increases your productivity at least tenfold without requiring a likewise increase in labor input. That same computer was developed by folks who more than likely have a much higher wage than you and I, not because they unionize to bargain over their pay but because the time and money they have invested in becoming highly skilled demands a higher return in the labor market.

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