Consumption (Economics); Prices; Supply and demand
That the actions of trade unions are very largely of this type is a
fact insufficiently appreciated by the middle-class public. The
elaborate system of piece-rate lists which has been evolved in the
Lancashire cotton industry is primarily designed to secure the same
wage for workers of equal efficiency in all mills, irrespective of the
degree to which the machinery is antiquated or up to date. This result
is wholly to the good: not only does it secure "fairness" for the
worker, it stimulates the employer wonderfully to efficiency. The same
result could never be secured so effectively by the free play of
competition. But this tendency, which is easily the predominant
element in the trade union regulations of the cotton trade, is at
least an important element in the policy of "The Common Rule" of all
trade unions, though it may often be mixed up with the more
questionable tendency to eliminate differences of pay for differences
of natural ability, and the unquestionably bad tendency to discourage
output. As between different occupations, the insistence of a trade
union that wages must be leveled up towards the wages obtaining in
similar trades acts again as a far more powerful force than
competition.
But the actions of trade unions are by no means wholly of this
type. They often serve rather to secure still higher wages for workers
who, comparatively speaking, are already highly paid. It makes little
difference whether this effect is secured directly by wage demands, or
indirectly by restricting the right of the entry to the trade. In
either case the consequences are the same, and there should be no
ambiguity as to their nature. They are certainly bad for the
community, certainly bad for the _other_ workers of the grade, almost
certainly bad for the workers of the grade regarded as a whole. The
higher wages must raise the money costs of production, and result,
sooner or later, in fewer workpeople being employed in that
occupation; larger numbers must accordingly seek employment elsewhere;
and this cannot but depress the wage rates of less strongly organized
trades. Thus the effect is twofold: a larger proportion of workpeople
will be employed in badly paid occupations; and the wages there will
be lessened.
Public-domain text, read in full here on John Shaqi.
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