Some thoughts on unions and unicorns

Unicorn cc

Unions are not bad things necessarily. Private unions in theory can in fact be quite good.

If a group of people want to come together peacefully and offer their labor in bulk because it is more valuable that way, great.

In return for a contract, which gives union workers security, the business owner also gains peace of mind. The owner knows what he or she can expect from the workers over the period of the contract. There is absolutely nothing wrong with this.

A union contract in the private sector can be a win win win. A win for the workers. A win for management. And a win for the consumer of the product.

Unfortunately things are usually more muddied.

Over the years unions have used force to scare off “scabs.” They have also solidly entrenched themselves in government with bodies such as the National Labor Review Board, which in a free society should not exist. Why should a government entity ever be able to keep a company from moving a factory, etc.? Who owns the factory?

The biggest problem comes in the public sector, however, the only place where unions continue to grow. How is it that civil servants are allowed to unionize? Who is the evil employer exploiting them? The American people? To paraphrase FDR who believe it or not didn’t think federal workers should be able to unionize.

One other bit on union contracts and pensions.

The point has been made (about Detroit) that contracts have been signed and so therefore pension obligations should be honored.

Indeed they should but by the entity which made the deal. If the city or company is broke, often because of pension liability, the broader public has no obligation to honor this contract. The deal was with the city and its workers (as in Detroit) not with the taxpayers of the United States and the city workers of Detroit. The city does absolutely have an obligation to pay its pensions, but if the city is broke, it’s broke. There is no money anymore. It’s gone.

I could sign a contract with my neighbor down the street guaranteeing me that at some time in the next 5 years he will deliver me a living breathing unicorn. We have an enforceable contract. But because it’s based on magic the contract will never be filled.

I can take him to court. I can rant and rave. But there will never ever be a unicorn in my back yard even though I signed a contract which said that at some time in the next 5 years there would be.

The same is true with many city pension schemes.

Sure the city signed a deal but it doesn’t mean that it was ever based in reality. The unions knew it. The cities knew it. They just thought that somehow, some way, a unicorn would show up.

Sorry, unicorns aren’t real.