Today is Labor Day, so I thought I would give my thoughts on the labor movement in the United States from the libertarian point of view.

The labor movement goes all the way back to the days of colonial America, “when a free wage-labor market emerged in the artisan trades.” The first trade unions began to form during this time, and the earliest recorded strike took place in 1768 among tailors in New York.

“The formation of the Federal Society of Journeymen Cordwainers (shoemakers) in Philadelphia in 1794 marks the beginning of sustained trade union organization among American workers,” History.com says. “From that time on, local craft unions proliferated in the cities, publishing lists of “prices” for their work, defending their trades against diluted and cheap labor, and, increasingly, demanding a shorter workday.

“Thus a job-conscious orientation was quick to emerge, and in its wake there followed the key structural elements characterizing American trade unionism–first, beginning with the formation in 1827 of the Mechanics’ Union of Trade Associations in Philadelphia, central labor bodies uniting craft unions within a single city, and then, with the creation of the International Typographical Union in 1852, national unions bringing together local unions of the same trade from across the United States and Canada (hence the frequent union designation “international”).”

All of these activities in the early days were done by private individuals and private organizations. The government did not get involved. As time went on, governments got involved more and more in the economy and protected business owners from their risky and/or illegal activities, arrested strikers, and refused to prosecute companies for massacring workers for not following orders, workers and unions demanded protection from governments.

One thing politicians do during the process of expanding government power is to convince the masses that their complaints are caused by business owners and bankers, when the government actually creates most of the issues in the first place. Inviting government policies to solve the issues is redundant, but politicians use ignorance of the facts to their advantage. The fact is that the free market creates better working conditions, better wages, and benefits.

Henry Ford is an excellent example of this. Ford’s factories had a high turnover rate among his employees, and it cost money to train new workers each time someone quit. In 1914, Ford raised his employees’ wages to $5 a day, up from $2.34 a day. The raise was really a bonus to be met under certain conditions, but this rate boosted assembly line productivity and resulted in happier and more loyal employees. In 1926, Ford was also one of the first companies to have weekends and 40 hour weeks, and he improved working conditions for his workers.

Ford had an incentive to improve conditions and pay in his company, because it increased productivity and even caused workers at his competitors’ factories to quit and work for him instead, creating competition among companies to treat employees better.

Many view this as still a negative because Ford’s intentions were not to be nice but to increase his own profits. This is true. Ford admitted this, and it is common practice even today to incentivize employees to work harder by giving them more. However, intent is irrelevant. Good intentions or bad, working conditions improved, discretionary income among workers increased, and jobs were created. Overall, the result of Ford’s greed begot a net positive result.

Today, American workers celebrate the labor movement and all that it has done for them. People continue to fight for more, whether it be paid leave or a $15 minimum wage. As policy continues to meddle in the marketplace, people will continue to look to the government to solve the problems government itself likely created. Until we look at the bigger picture, the labor movement will continue to be a never-ending circle.


Sources

[1] http://www.history.com/topics/labor.

[2] http://www.u-s-history.com/pages/h1678.html

[3] http://www.history.com/this-day-in-history/ford-factory-workers-get-40-hour-week

[4] https://www.forbes.com/sites/timworstall/2012/03/04/the-story-of-henry-fords-5-a-day-wages-its-not-what-you-think/

[5] http://www.newsday.com/opinion/columnists/lane-filler/henry-ford-didn-t-pay-5-a-day-just-to-be-nice-lane-filler-1.6629767

[6] https://www.brookings.edu/blog/fixgov/2014/07/14/government-failures-causes-and-consequences/

[7] http://www.egmanagementconsultant.us/government-created-monopoly/

[8] http://www.history.com/topics/homestead-strike

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