Labor is a commodity
and the price of labor is somewhat controlled by the number of workers entering
the workforce and further controlled by the number of workers willing to stay
on the job. The cost of labor is based on the economic value of worker’s
skills. Labor laws that interfere with this free market model are acts of
economic sabotage in violation of the laws of economics.
During the Industrial
Revolution in the US from 1850 to 1900, immigrants came from Europe in large
numbers. The US was in the process of settling its land mass. There were also
more workers coming from farms to cities. The result was a glut of workers
companies could hire to work long hours at low wages. The supply of labor was
higher than the demand for workers.
Commerce continued on
waterways and railroads were being built in the 1820s. The transcontinental
railroad was completed in 1869. The steam engine was powering factories and
removing water from mines. Applied science took a leap and was resulting in
innovation and invention in physics and chemistry and patents were being filed.
Machinery and
materials were in a constant state of development. The race was on in capital
formation, infrastructure formation, energy and steel production and factory
automation.
The owners of all
large companies were immersed in solving technical and operational problems and
failed to treat employees with respect. The art of people management was at a
low point. Large organizations became autocratic and ruled by force.
Work in factories,
mines and construction sites was hard and dangerous and workers were generally
unskilled. Those who were able learned crafts left the factories, mines and
construction sites, but many remained.
Those employees who remained were ripe to become jealous, disenchanted
and angry.
By the 1880s some of
these employees were formed into labor unions inspired by Karl Marx and the
“political struggle” began.
They quietly
organized, chose leaders and planned their tactics based on what they saw as
their “rights”. The first “strikes” were triggered by workplace accidents
resulting in employee fatalities. Employers fired the “strikers” and replaced
them with new employees. Strikers rioted and Employers called in the Pinkerton
Security force to fight the rioters. Property was destroyed and strikers were
killed and wounded and riots were covered by the press and the “plight of the
worker” was spotlighted to become the dominant theme.
Despite the fact that
the inventors and owners of these companies accomplished miracles from 1850 to
1900, the owners and bankers responsible for these innovations were cast as
villains ripe for punishment. They were branded as “Robber Barons”. Newspapers
also engineered public opinion against “the rich”.
Politicians became
interested in “solving” this dilemma. What followed were labor laws that
allowed employees the “right” to form labor unions and a government bureaucracy
to offer “mediation” of disputes. Politicians noticed a parade was happening
and they placed themselves in front of it.
The Sherman Anti-Trust
Act was passed in 1890 to attack mergers, while at the same time JP Morgan had
arranged a merger of the separate railroads so they could pay off the debt
assumed to construct their railroads. If he hadn’t done this, the loans would
have defaulted sending the railroads into bankruptcy bringing commerce to a
halt. But politicians were more interested in using the “plight of the poor” to
expand the government. They chose to ignore their pledge to protect “property
rights” for owners to pander to “the poor”. They also advanced Marxism in the
US.
By 1913, government
was ready to convert the US from a free market economy to a managed economy and
they passed the unconstitutional Federal Reserve Act and the US Income Tax. The
Federal Reserve would assure massive inflation from money printing and the
Income Tax and Inheritance Tax would serve to further punish “the rich”.
US labor laws were
written by the labor unions and resulted in union domination in major
industries. The cost of labor in the US by the 1980s was unsustainable with
union factory workers being paid $80,000 a year.
Foreign countries
offered much lower labor costs, lower facility costs and little or no
unnecessary environmental costs. In 1993 the US Congress passed NAFTA and US
manufacturing left to set up plants in foreign countries. US Private sector
union membership plummeted and public sector union membership soared. Now most
union members work in government and utility jobs.
Immigration to the US
doubled in 1989 and continued to double. We have added 60 million immigrants
over the past few decades. US immigration
laws have been liberalized since the 1960s to include all classes of workers.
Most immigrants in the US are in the minimum wage jobs that were previously
given to students.
Illegal immigration in
the US has always existed in Border States for seasonal agricultural workers
and domestic help. Migration from Mexico and other South and Central American
countries increased with the need for cheap labor in the US. Illegal
immigration surged in the 1980s with the construction boom.
The US illegal
immigrant population has increased from 0.54 million in 1960 to 11 million in
2017.
I am amazed that the
US government doubled immigration in the 1990s and then offshored US
manufacturing in 1993. Congress also left the US Corporate Tax Rate at 35% and
added unnecessary regulations. These suicidal acts of sabotage caused the best
parts of the US economy to be offshored to other countries.
Norb Leahy, Dunwoody
GA Tea Party Leader