Comment 98389

By Henry and Joe (anonymous) | Posted March 12, 2014 at 12:50:59 in reply to Comment 98382

Unionized work has always been, and still is, a check on the excesses of capitalism. Poverty has always risen as countries have become wealthy. I believe it was the Italian economist Giammaria Ortes who first noticed this correlation. What is interesting is that the labour movement grew simultaneously and independently in different countries as wealth and poverty increased. The response to the exploitation of capitalist forces was the same whether one was in Victorian England, the 3rd republic of France and Bismarck's Prussia.

As for the claim that unions create poverty. This is not supported by the evidence. In the U.S., where unionization rates have fallen to levels not seen since the gilded age (6-7% in private sector), half the population lives in poverty or near poverty. Unions have been systematically dismantled there ever since the Taft-Hartley legislation in the late 40s that was the antithesis of our Rand Formula.

I am not sure how business is forced to over pay for union work. It seems that any company can bid on jobs that go out to tender. It is just that some union companies have better skilled employees and do a better job for the money. Besides, this is only an issue in weak economic times. When the economy was booming in the late 80s and non union trades were raising their labour rates to capitalize on the increased demand, union labour rates stayed flat as determined by collective agreements. Now that a larger proportion of people are poor and we are looking at a prolonged period of stagnant growth, it is easy (but incorrect) to say that union workers are over paid.

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