Milton Friedman's century: Who protects the worker?

A friend of mine runs a small construction business in the Midwest. He invested a lot of time and money on a project to build retirement duplex villas for another company. He carefully studied the plans, negotiated all specifications, turned in several bids, signed the contract, hired professionals, rented equipment, and took his crew to the site to break ground. Within minutes, local labor union bosses and their goons surrounded the construction workers.

At first the intruders seemed calm but things swiftly changed when my friend revealed that his was not a union shop. He told the guys that he could not have won the bid if he had to pay the artificially high labor union hourly rates. This is where the threats began. My friend was told to pack up and go voluntarily or the union bosses would call for back up, placing a picket across the only road to the construction site, a "gate" that would effectively block all materials and shut down the project. My friend called his electrician, his plumber, his excavator-all members of unions-to find out how seriously he should be taking the threats. They all told him that no one would dare to cross the picket line.

Last summer Sen. Orrin Hatch, R-Utah, and Rep. Tim Scott, R-S.C., introduced a bill to protect individuals from the coercive practices of American labor unions. The Employee Rights Act guarantees workers the basic freedom to decide whether to unionize or not, without fear of retribution. The story above explains why I signed a petition written by several leading economists in support of this legislation, hoping it would limit the abuse of power by Big Labor. I am sure that the readers of WORLDmag.com can supply many more stories of threats, extortion, and acts of violence committed by those who falsely claim to stand up for the interests of the workers. Milton Friedman, whose centennial will be celebrated throughout the world this year, noted the following:

"When unions get higher wages for their members by restricting entry into an occupation, those higher wages are at the expense of other workers who find their opportunities reduced. When government pays its employees higher wages, those higher wages are at the expense of the taxpayer. But when workers get higher wages and better working conditions through the free market, when they get raises by firms competing with one another for the best workers, by workers competing with one another for the best jobs, those higher wages are at nobody's expense. They can only come from higher productivity, greater capital investment, more widely diffused skills. The whole pie is bigger-there's more for the worker, but there's also more for the employer, the investor, the consumer, and even the tax collector.

"That's the way the free market system distributes the fruits of economic progress among all people. That's the secret of the enormous improvements in the conditions of the working person over the past two centuries."

Happy New Year!