Striking and Scabs; C. W. Baird

Under the philosophy of providential gov ernment, most people, even elected state officials, regard federal government money as "free," as if it grows on some distant money tree in a neo-Garden of Eden on the Potomac. The trouble is, that tree has its roots in the pockets of every productive American. And with the specter of univer sal, federally subsidized health care on the near horizon, the mythical money tree is STRIKERS AND SCABS 143 ready for an unprecedented explosion of new growth. (Yet we are expected to believe that the federal government will suddenly reverse 50 years of tradition, and run this program as a model of efficiency!) These attitudes would have been anath ema to most of our grandparents, many of whom fled the tyrannies of encroaching European socialism. They would also be anathema to the villagers of "Tumbledown, workaday" Anatevka. Their reliance was on God and each other, and though its people also called their village "underfed, overworked, " they knew that the closer the tsar drew to them, the more imperilled their lives would be.

We would do well to heed the rabbi in Fiddler on the Roof, and again inculcate the attitude in our children and our communi ties: May God bless and keep the govern ment . . . far away from us! D STRIKERS AND SCABS by Charles W. Baird O n June 15, 1993, the U.S. House of Representatives voted 239-190 to amend the National Labor Relations Act (NLRA) to prohibit employers from hiring permanent replacement workers in eco nomic strikes. President Clinton promised to sign such legislation. Republican senators have promised a fil ibuster, so the Senate leadership has post poned voting on the issue. When and if they round up the necessary sixty votes they will schedule the vote. A filibuster stopped idenDr. Baird, a contributing editor ofThe Freeman, is Professor of Economics and Director of The Smith Center for Private Enterprise Studies, California State University, Hayward. tical legislation in the 102nd Congress, and there is a fair chance that it can do so again.

The proposed legislation applies only to economic strikes, which are union-initiated work stoppages over terms and conditions of employment. It is already illegal for employers to hire permanent replacement workers in unfair labor practice strikes, which are union-initiated work stoppages over illegal actions by employers such as firing a worker for advocating unionism. The Nature of the Right to Strike Unionists portray this issue as one of simple justice. They claim that the right to 144 THE FREEMAN • MARCH 1994 strike, which is guaranteed in the NLRA, is nullified by the ability of employers to hire permanent replacement workers. But what is the right to strike? Let's get back to basics. The employment relationship is one of contract between em ployees and employers. Contracts are formed by parties each of whom perceives that he will thereby gain. They are based on mutual consent. The typical employment contract is an agreement that the employee will perform specified labor services for the employer in exchange for a specified com pensation package. Unless a contract spec ifies the contrary, employees do not have property rights to their jobs.

Since each worker owns his own labor services, he clearly has a fundamental (Le., independent of government) right to with hold those services if he doesn't like the compensation package offered by an em ployer. It follows that likeminded employ ees have a fundamental right to withhold their labor services together, at the same time. However, there is no fundamental right for any worker, or group of workers , to prevent other workers from accepting the terms that they have refused to accept. To argue the contrary is to assert that strikers own the jobs that they refuse to do. Con gress may legislate such a privilege, but that is different from a fundamental right. In the realm of rights rather than privilege, work ers don't own jobs. They own their labor services. All workers, even nonunion workers, own their labor services. As owners they have a fundamental right to accept any terms of employment they wish, even if some other workers have rejected those terms.

Unionists use the epithet "scab" to refer to workers who are willing to accept terms that union workers have rejected. A scab, unionists thereby suggest, is less than hu man and therefore has no rights that anyone need worry about. However, calling a replacement worker a scab is not a logical argument. To make their case, those who support the proposed striker replacement legislation have to come up with some justification for subordinating the rights of union-free workers to the interests of union workers. Moreover, existing law is well balanced between unions and management. The terms and conditions of employment that a striking union seeks have long-run cost implications for its target employer. If em ployers were prohibited from hiring perma nent replacement workers, they could not impose any long-run costs on striking unions. As the U.S. Supreme Court has acknowledged, existinglaw allows each side to threaten to impose long-run costs. The hiring of permanent replacement workers, according to the Court, is one of the em ployers' "economic weapons in reserve"

that they may legitimately employ in the collective bargaining process. Finally, the ability of employers to hire permanent replacement workers provides a market-reality check to both sides in a labor dispute. If an employer is able easily to hire replacements at terms that a union has rejected (current law forbids employers to offer better terms), the union knows its terms are unrealistic. But if the employer cannot do so, it knows that the union's terms are not unrealistic. If employers were per mitted to hire only temporary replacement workers, as the proposed legislation speci fies, this market-reality check would vanish. Workers are often reluctant to accept tem porary job offers even at high pay. Although only 11.5 percent of private sector workers are unionized, the proposed legislationcreates privilegesfor union work ers at the expense of rights of union-free workers. Is that consistent with the Amer ican principle that all people have equal rights and are entitled to equal protection of the laws? D Correction, Please!