In America, the Industrial Revolution and then the Civil War dumped manpower into cities and provided Progressive politicians a needy following that they have exploited ever since. With a labor surplus available, early industry paid as little as it could to its workers. That is after all, why economics is the “dismal science.” Some call it reality.
Capitalists bought politicians, labor, unorganized, was exploited. The Progressives in turn exploited this, selling labor on unionism and lining up voters by doing so. When unions became strong enough in their battle with capitalists, the Democrats adopted them and put government behind them. Business interests had fought off unions; they could not fight off unions plus government. The unions grew.
They were finally defeated by three things: Henry Ford, China and their own hubris. Henry Ford voluntarily paid the then unheard-of wage of $5 a day to his mass production workers; he needed no union to press him to do that. He said that he had to pay his workers enough so that they could buy his cars. Pretty basic, now. Then, when the unions with government backing drove Henry’s $5 a day up too high, China, India and others saw it as an invitation to compete with their own cheaper labor as an advantage. Also pretty basic. And finally, instead of meeting the competition, American labor/Democrats have pressed ahead, worsening America’s labor cost disadvantage. That simply sent the work overseas.
Now, American unions are no longer significant in the private sector; government regulation has replaced them in matters of wages and working conditions. The unions have taken refuge, courtesy of their Democratic sponsors, in government, where they have again pushed earnings beyond what the economy, uncontrolled, would support. The vanished auto industry and the drained corpse of its capitol, Detroit, testify.
Other local governments and related industrial relics remain, headed also to the knackers. Government always collapses last and government and remaining American unions are interwoven. But American government is also going down; it lacks the resources to continue its spending but without that spending, it loses its supporters. That’s a lose-lose game, though many have refused to notice.
Organized labor is an moral and sound economic idea. Labor in bed with government is an immoral and economically destructive idea, as we see. The one seems fated to become the other in the nature of things, making organized labor a hashhish dream. Henry Ford though, was a hard-headed businessman who understood economics. Left alone, it’s reasonable to believe that the free market would ultimately have set fair, competitive labor rates without unionism. We’ll never know, though our descendants may.
Meantime, we can watch the unraveling of American organized labor as it begins to fade from government for the same reasons it has disappeared from American industry … it was just too expensive for the market, courtesy of political corruption. Desperate things will be yet done by politicians and labor leaders, but American labor’s final epitaph may be written on a Volkswagen factory in Tennessee.