In 1970, S. Korea and Venezuela had a similar GDP. Venezuela had a huge advantage: the largest oil reserves in the world. But while S. Korea embraced capitalism, Venezuela embraced socialism. Korea is an economic miracle and Venezuelans are literally starving to death.
President Cleveland created Labor Day on June 28, 1894 in an attempt to quell a strike by 150,000 railroad workers that had crippled the country’s economy. The striking laborers refused to go back to work and eventually clashed with federal troops. Their leader, Eugene Debs, was sent to prison, where he eventually became a Marxist.
The common ideology of the unions and the socialists made for a profitable long-term alliance. Each sought to overthrow the existing order, each proclaimed an entitlement to the property of others, and each was quick to resort to violence when lawful means were unproductive. Within two years of the institution of Labor Day, a quarter of a million workers in Chicago walked off their jobs, demanding a shorter work week (but the same pay). As so many strikes do, this one resulted in violence when police attempting to disperse the crowd at the Haymarket Square were attacked with a dynamite bomb. Seven police officers were killed. They would be the first victims of the new century of union, socialist violence.
The unions have long cultivated the myth that their reason for existence is the promotion of workers’ rights, but from their earliest days the opposite has been true. Shortly after the Civil War, as black Americans flooded northern industrial areas in search of jobs, labor unions such as The Brotherhood of Railroad Firemen and Brotherhood of Railway Trainmen prohibited the admission of black members. They also banned Catholics. Consequently, the railroads employed almost exclusively white protestants whose wages were kept high not because of the value generated for their employer, but through race and religion-based discrimination which kept a significant number of minorities from competing for the same jobs.
The racism of the unions was not limited to blacks and Catholics in the antebellum period; blacks would be discriminated against by the unions (and federal government), through even World War 1, while Asians were banned from membership in the American Federation of Labor.
As distasteful as the racism and bigotry is, the central premise of the American labor union should be distasteful to every person inasmuch as it is based on little more than envy and theft:
- The labor union boss agitates for more wages, more benefits for less work and threatens violence (real or economic) if the needs are not met.
- “Rights” to jobs are proclaimed-as though a man could have a right to dispose of another’s personal property as he (the claimant) sees fit, rather than as the owner believes is just. That this is a euphemism for theft should be obvious.
- Demands for higher wages are made, not because of the increased productivity of the worker, or of value generated for the employer, but because the worker believes that he is entitled to more, merely through his existence.
- The union worker is never content with the voluntary contract he has entered into with another party and resorts to extortion-and not infrequently violence-to get from another what he cannot obtain justly.
That the union abhors competition is indisputably true, proven through the existence even today, of ‘security agreements’ which obligate workers to join (and more to the point, fund), workplace unions. Despite the efforts in many states to prevent this kind of indentured servitude, so-called ‘union shops’ even require employers to fire employees who no longer wish to contribute to the union’s slush fund. That such a circumstance could be lawful-let alone moral-should be obvious were ours not a culture drowning in envy.
It should come as no surprise that a group of people acting in such a way-not unlike a Mafia-would have an adverse effect on those who are not fortunate enough to be members of their exclusive club. In fact, economists have concluded that the lower productivity of unions has likely cost the US economy more than $50 trillion dollars in the 50 years which the study, by the National Legal and Policy Center and the John M. Olin Institute for Employment Practice and Policy, analyzed. That staggering sum was nearly 10 times the national debt at the time of the report, and even today is more than twice all federal debt obligations.
The union bosses might boast that this cost was necessary, a sort of wealth redistribution to union members that any socialist would defend, except that the evidence indicates that while union members reaped a relative advantage, the consequence of this Robin Hood behavior was a general reduction in all wages.
The study showed that while the redistribution of income in favor of the few resulted in a 15% increase in income for them, the cost was a general reduction in productivity that resulted in an economy that grew so much more slowly that it was as much as 40% smaller than it would have been were it not for the cost of the wealth redistribution. This outcome seems obvious if we realize that taking from the productive and rewarding the unproductive will result in less of the former and more of the latter. As many observers have said, socialism fails always, and everywhere, and this is as apparent in the union mecca of Detroit as it is in the socialist paradise of Venezuela.
Union elites and their allies on the left will argue that these costs were both necessary and justified to create the American dream we all now enjoy, such as it is. And yet, in the pre-union era between 1860 and 1914, wage growth and productivity growth were nearly 10 times what they are today.
The federal government has been a collaborator with the union bosses from the origins of the movement. The creation of a federal ‘holiday’ to commemorate the alliance is logical, and there is no great call for rescinding it. After all the wars we’ve fought, debt we’ve incurred and taxes we’ve paid to create the greatest police state in world history, we may feel like taking a day off (after taking the Sabbath off). But conscientious Americans and all Christians should distance themselves from the substance of this secular holy day and embrace man’s first vocation; voluntary, joyful and grateful labor.