LaVerne Furbert gave a characteristic and feisty response to my recent column in the Sun about the futility of trade unions. But then that is the duty of an employee of the BIU.  She should be given an increase in pay by her employers.

In essence she made three points on which I should like to comment.

  • I agree that few people will take my comments seriously mainly because it is politically incorrect to criticise unions publicly.  They control too many votes.  People love reality television; they detest reality economics;
  • I also agree that many past leaders deserve our thanks for the way in which they stood up to the exercise of capricious power by those in authority.  In 2010, we should also be against the exercise of dictatorial political power by certain people in our current government;
  • The main thrust of my article was that unions cannot in the long run increase wages of their members. As this fallacy is the main reason for their existence, anyone who states the obvious must be slapped down by the BIU.

Let me elaborate more on the last point. In the Fortune Encyclopedia of Economics it is stated: “If unions raise the price of labour, employers will purchase less of it. Thus unions are the major anticompetitive force in labour market. Their gains come at the expense of consumers, of non-union workers, the jobless and the owners of corporations”.  Think of what has occurred in the local hotel industry over the past 20 years or so.

Unions also have legal privileges and immunities which ordinary people do not have. They can restrict others from working for lower wages by picketing and threats, and even violence. Those who wish freely to work are faced with insults and called scabs. Again, think about what occurred in the 1980s when a group of strikers marched into the dining room at Sonesta Beach and intimidated tourist diners. This is not the way to retain customers and prosperity.

Futility

Unions elsewhere have virtually destroyed the steel, textile and car industries in the U.S., coal mining in Germany and U.K., and a whole host of other industries. In Bermuda, they have done a hatchet job on the tourist business — admittedly with a great deal of help from the Department of Tourism.

Many hoteliers have stated this privately to me, but they dare not go public for fear of retribution. Either in the form of strikes, or by Government being difficult over work permits.

By discouraging new investment, maintenance, modernisation, unions reduce real wages below what they would otherwise have been. That is a major reason why wages in the hotel industry are way below what they are in international business. 

If unions are successful at increasing wages for their members, why do unionised workers in Haiti and Bangladesh make peanuts? 

Unions all over the world are declining in importance. In the U.S., union membership has declined from around 30 per cent in the l950s to around 13 per cent today, and most of those work for the U.S. Government. Similar figures can be produced for almost every other country. If unions improve wages, why is their membership shrinking everywhere?

Nonsense

In Bermuda, why do workers in international business not join unions?  Simple. They do not fall for the nonsense that unions can improve their pay and conditions. Their salaries are dependent on the success of the business and on how well their employers serve their customers or clients. No employee in international business in his right mind would join the BIU because there is nothing the union can do to improve things.

Another fallacy that abounds is that our current high standard of living compared to that of a hundred years ago is due to the labours of unions. No so.  The rooster cries just before sun up; after 20 days of the sun rising after he cries, he might be forgiven for believing that the sun comes up because of his cockle-do-a-do. This is the error that correlation is causation. Unions are roosters who lead a gullible public to believe that their actions result in greater prosperity for all. 

Finally, Ms Furbert resorts to the old trick of hinting that I am a closet racist. Let me end with a quotation from the militant black leader Marcus Garvey.

“It seems strange and a paradox, but the only convenient friend the Negro worker or labourer has in America is the white capitalist. The capitalist, being selfish, seeking only the largest profit out of labour — is willing and glad to use Negro labour wherever possible.”

Good luck in your request for a pay rise.