Block's stance on unions not even wrong
Published: Friday, September 15, 2006
Updated: Sunday, December 14, 2008 01:12
In physics, when a theory fails to be verified in experiments or is found to have errors, it is considered wrong. But if the theory is so incoherent, so disconnected from reality that no sense can be made of it, physicists say that it is not even wrong. Such a theory doesn't deserve to be judged alongside real theories.
Walter Block's column last week on unions and wages is not even wrong.
The essay has more fundamental errors than paragraphs, so only the most offensive can be addressed. The first paragraph sets up a strawman, the mysterious "some" who think that were unions to disappear, working conditions would revert to the horrors of the 19th century industrial factories.
Let's be clear: nobody says this. It's a figment of Block's imagination. The reason nobody says this is that the gains in working conditions and wages that were made by unions have now been codified in law. It is the laws that guarantee basic workplace safety, minimum wages and so on. Where these laws vary, so do working conditions.
The one thing Block's "some" do in fact say is that wages would drop if unions disappeared. He thinks this is all wrong, that there is an "inexorable tendency" toward an equilibrium between wages and productivity. He argues that a situation in which a worker is paid $5 an hour less than his productivity "can't last," because such a productive worker could be hired away.
Now it pains me to have to instruct the eminent Dr. Block on such a basic fact of economics, but wages are driven primarily by bargaining power as dictated by supply and demand; productivity is virtually irrelevant (except as a soft ceiling). If an owner needs five workers but there are five hundred workers who need work, the owner will offer the lowest possible wages needed to attract five suitable workers in order to maximize profits. The more workers available, the lower that wage will be. If there are more workers than work, wages tend to go down; more work than workers, wages tend to go up.
What unions provide in all this is collective bargaining. Workers, especially lower skilled workers, generally need their jobs more than the company needs them, so in negotiating wages and benefits, the company has more leverage. Companies can, and do, punish individuals who ask for wage and workplace improvements, which keeps wages down. But if the workers bargain collectively, they gain leverage, because the company can ill afford to lose all of them at once. The more leverage the workers gain, the better they can do in the free negotiation of contracts. It's called capitalism.
Block's citation of stars like Shaq and Brad Pitt, who are in no way representative, only goes to prove this. Shaq and Pitt have uncommon leverage (their skills are in great demand), and yet both are still members of powerful unions (NBAPA and SAG). Why? Because they are aware that their equally productive forbears were not nearly as well compensated for or secure in their work because they could not bargain collectively.
Then things get truly bizarre. Block asks about the decline of union power and the rise of real wages over the past fifty years, ignoring both the strengthening of wage laws and the disconnect between the median real wage and corporate profitability. He then asks (somewhat incoherently) about how some non-unionized industries nonetheless pay very well. Answer: the workers' skills are in demand, so they have more leverage.
He then asks why the South, "the least unionized part of the country, is the fastest growing?" This is just confusing. The topic under discussion is wages, which means Block is claiming the South is the fastest growing in wages. That's simply false. There is actually a decline in median real wages in the South over the last six years, and the South is doing worse than any other region. The citing of Singapore is both false (they do have unions) and misleading (only poor countries envy it).
The ludicrous denial of the connection between unions and wages does not merit the response I've given it. It's like arguing against the Flat-Earth hypothesis. But some unsuspecting student might be fooled by Dr. Block's credentials into taking this position seriously. I think he underestimates our students' intelligence, but we can't risk it.
Boyd Blundell is an assistant professor in the religious studies department.