William Hutt studied the rise of the British trade unions in the 19th century and especially the way they developed what he called the “strike threat system” to maintain a rigid stratification of the workers with those in the most powerful and reckless unions at the top, those with less powerful unions on the lower levels and the unemployed out of the game altogether. Those who were prepared to use murder, standover tactics of the crudest kind and sabotage (on the docks, concrete pours, handling perishable goods etc) became what Hutt called “a bloody aristocracy of labour”.
See how this plays out in the car industry. As I read Grace Collier, the unions have got terms and conditions which essentially transfer the government subsidies into the wallets of the unionists without productivity gains to lower the costs and improve the quality of the product to benefit the taxpayers who buy the cars and also enable the car makers to export more effectively. These guys are among the aristocrats of the labour movement with the wharfies and the big building unions. Thanks to the subsidies and gutless management and the Fair Work Act they get remarkable terms and conditions, including very generous redundancy packages when the end finally comes. They also get a ludicrous amount of control over the micro-management of the firm which helps to kill productivity and morale in the firm.
There appear to be in the order of 3 to 4000 jobs at risk in the car makers but they are just the aristocratic tip of the iceberg. I gather that there are some 30,000 employed making parts and components and their jobs are at risk also. What sort of terms and conditions and redundancy packages have they got? What has trickled down to them from the tax payers money that was put into the car makers? The are not the aristocracy, they are the lower orders.
Tough luck you guys. But everybody should think about the options and what it means for the future, or would have meant if the industry had only found the foresight and the integrity to think about the future a few years ago instead of delaying hard decisions by holding out for more support. Do you think the component makers and distributors should have a union that puts more pressure on the management in their small businesses to get more pay with no extra productivity, or do you think we need a system at the top of the car industry (the big business that thought it was too big to fail) that rewards smarter and harder workers who will opt for win/win outcomes by offering productivity and quality gains in return for better terms and conditions?
More on William Harold Hutt (1898-1988). His page in the Rathouse.
His demolition of the myths that sustain the exploitive and divisive forms of trade unionism is now summarized in an ebook so be prepared to spend the cost of a cup of coffee to read it.
This is an extract from his account of “labor’s so-called disadvantage” in one of his books to describe how the minimum wage, once called “the going rate” destroys the employment of people who are not highly skilled and experienced. This is a topic that David Leyonhjelm will address in an op ed in the Fin Review tomorrow (Thursday 12).
The ‘Standard Rate’ essentially an excluding device
The exclusive policy of unions is not confined to the obvious method of visible exclusion by apprenticeship restrictions and the like. Every insistence on an artificially high rate will tend to reduce the number it will be profitable to employ. Those within the combination will still benefit at the expense of those outside. This method of obtaining monopoly is more pernicious than that of apprenticeship exclusion as it enables the monopolists to plead that they are acting in the interests of those whom they are in fact excluding. They can claim that they are raising the standard of living of the very ones whose competition they wish to eliminate, and even get the support of legal enactment to enable them to carry out their policy. The evil in labour monopolies lies not only in their driving the less fortunate to relatively badly paid occupations but also in their raising the cost of living to them as well.
The chapter on “Labor’s Disadvantage“.