Inviting Strikes

October 11, 1965

The newspaper strike in New York City (after the 114-day strike of 1962–63 that helped to put one newspaper, the Daily Mirror, out of business) is one more example of the increasing tendency of unions to make excessive demands whose acceptance would be not only against the long-run interests of the economy, and therefore of the great body of workers, but against the long-run interests even of the majority of union members themselves.

One of the demands of the Newspaper Guild on The New York Times is the compulsory union shop—though 2,200 out of 2,400 eligible employees are already on the union rolls. This would mean that all stories about labor disputes would be written by union members. The compulsory union shop, moreover, is against the interests of every worker considered as an individual. He cannot get employment unless he is a member of the union; and he is not free to leave the union (except at the cost of his job) if he is dissatisfied with the way it is being run.

The main issue that gave rise to the strike is automation. The guild is asking that no man be fired because of automation and that the guild have a veto on the introduction of any labor-saving machine that could place work performed by a guild member under jurisdiction of another union.

VETO ON PROGRESS

Now a veto on automation is a veto on progress. It forces work that could be done more efficiently and with less labor to be done more expensively, less efficiently, and with more labor. In the long run such a veto does not make more jobs but fewer. By depressing the average productivity of labor it correspondingly holds down the average level of wages. What it protects (temporarily) is a continuance of a few specific jobs that already happen to exist. But it does so only by preventing the creation of more productive jobs. It continues Peter’s present job only by closing off Paul’s, or his own, future job.

In the New York newspaper strike, wages are not an issue. But they have been the principal issue in practically all other major union negotiations this year. Labor costs have already been raised on New York newspapers to such an extent that most of them are losing money and one or two more may be driven out of existence.

When a union succeeds in driving wage rates or costs above the marginal productivity rates that a free market would establish, it merely cuts the number of jobs that would otherwise be available. Unions cannot raise real wages above what they otherwise would have been without cutting employment below what it would otherwise have been. Unions cannot raise the general level of real wages; they can at best raise some wages at the expense of others. This result is usually disguised from the general public by the fact that constant increases in man-machine productivity lead to increases in most wages. But the unions—to the extent that they reduce production by work rules, featherbedding and delaying automation—reduce wages below what they would otherwise be.

DOUBTFUL LABOR LAWS

The recent costly strikes and “wage-inflation” resulting from strikes have led to proposals that industry-wide unions be prohibited, or even that strikes be prohibited, and that all disputes be submitted to compulsory arbitration. All such proposals are in the totalitarian direction, and they would in fact create more problems than they solved.

But before the situation becomes still worse, it might be a good idea to take a hard look at the wisdom of the labor legislation that we began passing in the 1930s, and at local law-enforcement attitudes. We might remove, for example, some of the present one-sided compulsions on employers to bargain exclusively with specified unions and some of the one-sided immunities to unions which enable them, through picketing and other forms of intimidation, to force a business to shut down until it has yielded to their demands. Under present laws and rulings, a company hardly dares to warn strikers that it will permanently replace them with other workers and carry on its business. The laws invite strikes both by taking the major risks out of them for strikers and multiplying the risks of employers who try to combat them.