This article was originally published by Connor O’Keeffe at The Mises Institute.
On Thursday, the Senate HELP Committee is set to vote on the nomination of Lori Chavez-DeRemer, Trump’s pick for Labor Secretary. Chavez-DeRemer was a Republican representative from Oregon who made a name for herself for being very pro-labor union compared to other members of her party.
Trump’s nomination of Chavez-DeRemer is seen as one part of a broader political shift that now paints the GOP as a party chiefly concerned with the well-being of the American working class. Because the last five decades—at least—can largely be defined by both parties racing to find new ways to transfer wealth away from the American working class and into the pockets of government officials, progressive intellectuals, and the politically-connected rich at home and abroad, a restructuring that benefits the working class for a change is long overdue.
And, to their credit, for some in Trump’s team this effort seems genuine. But if the administration is serious about making life better for all members of the American working class, embracing labor unions is not the way.
As I explained in my video on Monday, labor unions necessarily hurt some American workers to make others better off. The only way unions can raise the wages of their members is if they lower or eliminate the wages of other workers. This is inescapable.
Remember, wages are a cost involved in producing goods or services that might be sold in the future. They are not somehow—as Marx famously argued—a share of revenue that has not even been generated yet. Even large corporations do not set wages at whatever level they want. They’re based on the supply and demand for specific labor services. Any attempt to deviate wages away from the market clearing price will distort labor markets and either send workers flooding into roles they’re not needed in or away from roles that they are.
And on the flip side, an artificial wage increase makes the purchase of labor services less affordable for producers. So when unions raise wages, producers cannot afford to pay as many workers. To keep their member’s wages high, unions need to stop the unaffiliated or unemployed workers that were just priced out of the market from offering to work for a wage slightly lower than the union wage. Historically, this has been done through aggressive shaming, physical violence, property destruction, and government intervention.
Despite all the myths and propaganda we were taught in school, labor unions necessarily pit the working class against itself. Because they’re louder and better organized, union leaders frame the wages and protections their members enjoy as a win for all workers. But the workers who are forced to remain unemployed, misemployed, or underemployed as a result rarely get the same attention. Those American workers matter too.
But it’s not as if the workers who do happen to be in a union remain unscathed. The higher cost of production and restricted supply of labor create shortages. American businesses are no longer able to produce everything the American public needs. These shortages drive Americans to spend more money purchasing more expensive goods from foreign producers and, overall, raise prices in the US. Voters just sent Trump back to the White House in part to bolster American businesses and address inflation. A right-wing embrace of labor unions would go directly against these aims.
The American working class has been crushed by inflation, hollowed out by financialization, and sold out by officials in Washington for decades. Parts of the current administration are finally focusing on some of the federal mechanisms that have brought this all about, which is great because the path out of this mess involves abolishing the programs that have held the American working class down, not following the lead of the leftists and establishment interventionists who have brought this all about in the first place.
Read the full article here
