Milton Friedman - Rights of Workers

I now present to you dr. Milton Friedman thank you very much the subject that was significant put out for tonight's talk is the subject of Hooper debt protects the worker if you were to have a Gallup poll go around and ask people that question or if someone were to go around and ask people in this audience the question of who protects the worker I strongly suspect that you would get one out of three possible answers some people would say oh of course it's the unions that protect the worker some other people would tend to say oh no it's more important the government that protects the worker and I suspect most people would say it's nobody who protects the worker now all three answers are under some circumstances correct but all three answers are misleading they cannot really be the right answer one obvious bit of evidence that they cannot be the right answer that there's something missing from that sequence of three answers is the history of the United States over the past 200 years over that period if we at least take the first hundred and fifty years period from 1776 to 1914 or there abouts it could not very well have been unions that were protecting the worker since there were almost no unions even craft you craft unions developed fairly early but even by 1914 there must have been a true a very very tiny fraction of all workers in the United States they were members of Union it could not have been the government that was protecting the worker because over that period government was very small total spending by the federal government over that period never amounted to more than three percent of the national income except for the period of the great Wars of the Civil War and before that of course the war of 1812 but during ordinary times federal spending amounted to three percent state and local spending amounted to about twice that much mostly for schools so it could not conceivably have been the government that was protecting the worker moreover not only was spending low but there was very little government involvement in the economy in any way and it could not have been nobody who was protecting the worker because that was a period of enormous progress for the ordinary worker if we take that period it was a period which saw the growth and development of the United States from a backward area but even from the very beginning Adam Smith in his great book The Wealth of Nations published in 1776 remarks about the conditions in America and he says that although America is at the time much less populous and much less wealthy than Great Britain the worker in America is more expensive because there were at the time as he argued fewer workers relative to the demand for them over the period from 1776 on the average conditions of the ordinary worker in the United States improved enormous ly in the latter half of the nineteenth century you had millions on millions of people of penniless immigrants come to this country my parents came during that period probably the parents or grandparents of many of the people in this room came during that period why did they come they came in order to improve their lives and to make a better life for their children and their grandchildren and they succeeded it would be very hard to find a sense in human history in any country anywhere during which the ordinary man the ordinary worker the man who came to this Shore from abroad or the people who were here and grew up here it would be hard to find a century in which the worker achieved a greater increase a more widespread increase in his standard of life in his level of living so neither a three of these three answers can possibly be the right answer for a large part of American history before trying to go on to what the correct answer in my opinion is to the question I would like to consider with you each of the answers that people give and see where they are right and where they are not and why they are right and why they are not let's start with the unions because that gets the most publicity and the most attention and is the most misunderstood in my opinion of the three answers now unions do protect some workers unions protect two classes of workers those of their members who are employed and the union officials who run the unions but if you're going to look at this as a general answer you have to recognize that only about one-fifth of all the workers in the United States are members of trade unions and many of those are members of wholly ineffective trade unions of trade unions that have had very little effect on the wages of their members of the working conditions of their members it's very interesting to consider the actual experience of unions and compare it with the talk about unions and emanates from union leaders Union headquarters and defenders of unions if you listen to the talk you will get the impression that unions exist to protect the workers who are way down on the income scale the talk is always about the necessity of protecting or helping than low-skilled workers against exploitation by employers but suppose I were to ask you which are the strongest unions in the United States which unions in the United States are strongest in the sense of having been most successful in raising the wage rate the earnings of their members the answer is very soon clear and very definite probably the single most successful union in the United States from this point of view is the airline pilots union now this is a union whose members typically receive salary or wages somewhere around fifty to a hundred thousand dollars they are hardly the poor deprived exploited workers of Union literature they have been very successful because I have been able to have a very strongly organized Union which is and they have four reasons which I will come to later been in a position to limit entry into the Union and into the occupation in my opinion the next strongest union in the United States is an organization that the people in this room will not regard as a union but that's what it is in my opinion the next strongest union in the United States has been the American Medical Association now the American Medical Association is not a traditional Union but it is a union from an economic point of view it is an organization of people pursuing a particular trade which is tried to control the practice of medicine in such a way as to improve the conditions of its members if you ask a union leader what is a function of a union he will agree with you and he will emphasize and rightly that the first and primary function of a union is to improve the working conditions of its members well from this point of view the American Medical Association is on the whole done very well again let me emphasize I am NOT I am Not sure I do not mean in any way to be invidious I am not criticizing the airline pilots I am not criticizing the members of the American Medical Association I am only trying to understand and analyze a situation Adam Smith in that great book on the Wealth of Nations brought home to all of us that the way in which the world runs is mostly by people seeking to pursue their self-interest and there's nothing wrong with it that's the way in which we run and he pointed out that in the right kind of a structure in the right kind of a world people in pursuing their own self-interest would also promote the general interest so I'm not complaining or criticizing at the moment but only analyzing if there's any fault to be found it is not to be the fault is not to be found with the members of the pilots union or the members of the AMA but with the rest of us for letting them get away with it now the third strongest groups of unions are undoubtedly the craft unions the carpenters the plumbers the plasterers and the like and they again are that have always been extremely high paid that have always been among the elite of the working community and finally as my fourth class and this is a newly developing class the strongest unions have in recent years in the past decade in particular become the municipal unions the unions who have played a considerable part in reducing New York City to its present state of bankruptcy the garbage workers unions the school teachers unions all of the union's of municipal employees now these municipal unions of course are illustrative very important general case that we will expand more why are they so strong because the people who arrange employment with them are not the people who pay their salaries it's the taxpayers of New York who pay the salaries of the people but it's the officials of New York City who make the deals with the unions now that illustrates a general principle which has reached its most extreme form in Great Britain unions are much stronger and Great Britain than they are in the United States and one of the major reason that they are stronger is because the government of Great Britain has nationalized a great many more industries in particular coal mining railroads collect public utilities telephones are all nationalized industries and the worst labor problems in Britain have almost invariably been in those industries which are nationalized by the government just as in the New York City and other municipal cases the growing role of government has tended to expand the importance in the role of the unions one of the strong unions unions in the United States for the same reason or the postal workers unions and so we go down the line but the most important thing about all of the is that the strong unions tend to be among the high paid workers now you have to ask yourself are they high paid because they are strong unions or are they strong unions because they are high paid it's a very important distinction and the fundamental answer is the people who are the high paid position are in far better position to have a strong union and the strong unions then reinforce their position so both things are true part of their high pay in position today derives from their union existence the existence of strong unions but they have been able to have strong unions because they are highly skilled people relatively few in number and therefore far more effective in being able to organize in such a way as to raise their pain because you must recognize that the only way in which any group of workers through union organization can increase the amount of its pay is to make sure that there are fewer jobs available there is no way in which a union can simultaneously increase the number of jobs and the pay the law of economics the law of demand and economics is inescapable you can't get out of it raise the price of anything and fewer people will want to buy it make labor more expensive in any area make carpet is more expensive the number of jobs available for carpenters will be less make physicians more expensive the number of jobs available for physicians will be less make airline pilots more expensive the number of jobs available for airline pilots will be fewer as a result the gains of the group of workers I've been talking about our other union workers are at the expense the union workers gain at the expense of other workers the only way as I say in which they can get a higher pay is by arranging things so that their end up paying fewer jobs and that means that other people who might be perfectly competent who might be perfectly available for such jobs or denied their job those jobs as concealment not only is so the effect of the higher pay of unions is lower pay for all other workers I once made the estimate this was 20 odd years ago but since there have been a number of studies that have confirmed this judgment that on the average about 10 to 15 percent of the workers in this country had been able through a union organization to raise the level of their pay by something like 10 to 15 percent that this had been look at the cost of a roughly 4 percent reduction in the wages earned by the other 85% so the effect has been to raise the pay of high paid workers and lower the pay of low paid workers and of course as consumers all workers pay for this because the effect of this higher pay on the one hand and fewer jobs and the other is to make it more expensive to produce all consumer goods to make the allocation of labor the distribution of labor less efficient to mean that our standards of life of everybody is a little lower houses are more expensive for everybody union leaders of course talked about taking higher wages out of profits and if I were to be talking to a group of union leaders or if there are union people in this audience they will reproach me by saying why do you insist it comes with the other workers why can't it come out of those greedy profit seeking employers then of course they're greedy and profit seeking so are we all so are the workers do you know somebody in this world who is not greeting well of course I'm not greedy but everybody that's different but the point is it you cannot get something out of nothing I'm sure you have all heard the old story about john d rockefeller wealthy man around the very wealthy man one of the wealthiest men in the country and people would come up to him and tell him how how inequitable it is that he should have so much money and other people should have less and he would say to him well suppose we took all the wealth i have would you like to have the share that would be available for you and they'd say yes and he take out a dime and give it to him that was roughly the amount that would be available if you took his wealth and spread it all over all the people of the country in the same way suppose you just look at the numbers out of the total national income today roughly eighty percent goes to the payment of employees directly or indirectly in the form of fringe benefits that is the national these are the statistics of the national income statisticians roughly eighty percent of the national income now goes for payment of workers of the remaining twenty percent something over half event goes for the payment of rents read on man rent on property and so on or for the payment of interest on loans profits of corporations they are the people who it's always suppose you can squeeze the money out of profits and corporate corporations amount to less than to ten percent of the national income that's profit before tax if you take off the taxes they pay profits after tax amount to something like six percent of the national income well there isn't much leeway there to raise wages then you can realize also that even that every time you go in and try to extract from that small amount to add to the amount received as wages you are reducing the incentive for capital formation which has been the major source of increased productivity why is it that the ordinary worker of the United States has been able to get an ever higher income until the last few years when that potentially higher income has been extracted off and diverted down to Washington but over 200 years the worker was always able to get a higher income because people had an incentive to put up factories and machines and invest money and enable the worker to be more productive so there is essentially no possibility this is not something that's a question of ideology it's a question of arithmetic there just is no large sum which can be tapped by the so called unions now the question is what is the source of power of the strong unions where does it come from most people and talking about how unions get their way are inclined to focus their emphasis on strikes which are very newsworthy or on featherbedding which is also very newsworthy worthy or on seniority rolls or apprenticeship arrangements and the like these are not the important things the fundamental source of power of a union is power however obtained to force a higher wage rate if somehow or other and I'll come hat back in a moment to how they can do it if somehow or other a union can put an employers in the position where they cannot or will not offer less than a certain wage rate they can make them offer a higher wage rate that's the fundamental source of power and all of these other devices we're talking about are ways in which you ration the limited number of jobs available at that high wage rate among the people who seek it if you succeed in saying that no contractor is going to pay less than $8 an hour for a plumber or a car that reduces the number of jobs available it also increases the number of people who would like to get that job but now let's suppose for a moment you can enforce that wage rate somehow or other there has to be a device for deciding who shall get the job that's the role of seniority arrangements that's the role of apprenticeship arrangements that's the role of featherbedding to do to find a way to allocate and distribute the gravy it's also I may say the source of the kind of discriminatory policies that unions have followed there has probably been few sources few more important sources of racial discrimination in the United States against minore discrimination against minority groups than discrimination by skilled craft unions and that's because if you are going to have a limited number of jobs and you're going to ration them you have to have some way to ration them and irrelevant considerations and appealing to prejudice are a way in which you can get support for certain kinds of rationing it's an interesting phenomenon before the Civil War during the period of slavery the fraction of carpenters plumbers and so on who were blacks especially in the south was very high forty or fifty years later after slavery had been abolished the fraction of carpenters plumbers and so on who were blacks was smaller than it had been before why because successful trade unions limiting the number of jobs had to find a way to ration those limited jobs and this was a way of rationing it which would enable their members to be loyal and to stick by it and at the time could get support from the rest of the community so the real power is to force higher wages now how can they do it well one of the obvious ways they do it is by threatening to beat up employers who pay a lower wage for threatening to beat up we're actually beating up workers who offer to work for a lower wage and that's why Union wage arrangements and negotiations have so often been accompanied by violence that's a device for enforcing a higher wage but an easier way to do it and a way which is sort of more respectable is to get government to help you out the AMA has been able to do it by having government licensing of physicians so that nobody can become a physician unless he is licensed to be a physician by a government licensing board now they ask you who do you suppose is competent to decide who should be a physician only other physicians so the membership of licensing boards of medical groups is always composed of physicians and that has in fact been a key element in the restriction of entry into medicine and in keeping the number of physicians to a lower level than it otherwise would have been this happens to be a subject in which I once Disney Norma's amount of work I wrote a book some 30 odd years ago on on incomes from independent professional practice in which I examined in great detail the light of the practices of the American Medical Association the American Dental Association and other organizations and I decided at that time that the effect of limitation of entry into medicine had been to keep down the number of physicians and increase the average income of physicians at that time by something between 17 to 30% now the recent figures would probably be in the same direction of course if you talk to physicians they'll say why the reason we're in favor of licensing is in order to have a very high quality of medical practice but then if you look at the rules they have followed some of them have no relationship whatsoever to quality of medical practice after you had Nazi Germany take over in UN and Germany the Nazi regime and there was an attempt by Jewish physicians and other groups persecuted groups from Germany to come in the United States all of a sudden the Medical Association started to require that people be citizens of the United States in order to practice medicine in order to be licensed now it's a very nice thing to have people citizens of the United States but when you tell me the relationship between that and the ability to practice medicine I could go on at great length again I'm not criticizing people I don't mean to say to people the physicians aren't sincere when they say those of course they are sincere that doesn't mean they aren't wrong that doesn't mean that they aren't rationalizing in the name of improving quality a great desire to improve their economic status now during the Great Depression they were open and aboveboard by that the Medical Association says we have to keep down the number of physicians in order to keep up their incomes because otherwise if they have low incomes they will be tempted to engage in unethical practice now if anybody has ever been able to establish any correlation between the level of income and the state of personal ethics I would like to see that evidence and so would you and of course licensure is used much more broadly I mentioned the medical example because it seems a more best justified and it is in a way it's it's harder to argue against and almost anything else but you go down the line have you ever looked at the number of licensing arrangements you have to be and you're in almost every state I don't know about Pennsylvania but I'm sure you have to get a state license to be a barber and in most states in order to get that license you have to supposedly have taken courses on the on the biology of hair and on care of skin and all sorts of things and of course again who is it who licenses of barbers it's not the customers plumbers licensed plumbers and if you really want to know the real function of licensure of Licensing all these occupations all you have to do is go and see who goes down to the state legislature to lobby in favor of licensing now if the real true function of Licensing is to protect consumers you'd expect consumers to be licensed to be lobbying for licensure but you will discover that it's always the plumbers or the beauticians or the morticians or anything you can name there isn't an occupation you can name which hasn't been down at the Statehouse trying to get licensure now of course you might say that the plumbers know better than anybody else why the customers need protection but I sit down very much that's why they're down at the Statehouse they are down there because they want to be protected against quote unfair unquote competition now you know what unfair competition is it's anybody who charges less than you do so licensing by government has been a major way in which unions have been able to be strengthened that's very important for the pilots union it's very important for the medical union it's important for many craft workers a second set of governmental laws that have been greatly promoting union strength have been the davis-bacon Walsh Healey laws now these are laws under which any person who has a contract with the US government the davis-bacon has to do with construction while Chile has to do with other kinds of activities anybody who has a contract with the government must pay quote prevailing wages unquote prevailing wages are wages as determined by the Labor Department of the US government and by some strange chance preventing wages always turn out to be the highest Union wages in a very wide area and the result of this has been that in effect the government enters in as a partner to enforce trade union wage restrictions and in this way to enforce a restriction of the number of jobs available another governmental measure is minimum wage laws you'll notice that the people who are currently lobbying in Washington for higher minimum wages are not low income workers it's the afl-cio and the other high income union unions whose members all receive much higher income than the minimum wage now of course they say that the reason they're lobbying for a rise in minimum wage is to protect the poor workers at the bottom and keep them from being squeezed but of course that's talk the fact is that they want to rise in minimum wage to wage to protect themselves from the competition of other workers the minimum wage rate has the effect of denying jobs to people it has the effect of reducing the opportunities available the reason we have such enormous ly high unemployment rate among teenagers and particularly black teenagers is because it is illegal to hire anybody whose skills are not sufficient to be worth the minimum wage rate the minimum wage law is a law requiring employers to discriminate against low-skilled people that's not the way anybody will describe it but that is in fact what it is here is a person who has low skills he's only worth two dollars an hour and he'd be delighted to work for two dollars an hour because that's the only way he's going to acquire better skills and enable himself to get prepared for a better job he's a 15 16 17 18 19 year-old person for example handicapped person person who has poor education illegal for you to hire them unless you are willing to give them charity because you can only hire them if you pay them two thousand thirty five cents it's always been a mystery a minute why a young man is better off unemployed at 235 an hour then employed at two dollars an hour can you explain that to me ask mr. Meany he'll explain it to you finally a major factor strengthening unions a factor which is changing is a general attitude of the public which is we've been willing to tolerate in this area behavior which you would not tolerate elsewhere if in the course of a labor dispute somebody's car is overturned it's very likely very highly unlikely that anybody is going to go to jail or get punished or have to pay for that if you or I go down the street and smash in windows of cars or turn them over we'll get put in jail and we'll have to compensate the victims but if this happens in the of a labor dispute much less likely to happen and that's because the public at large has felt that somehow that was a noble activity and should be protected as I say I believe that position is changing now a final source of power has sometimes been collusion between the unions on the one hand and the employers on the other to monopolize not labor but the product we have antitrust laws in this country which make it illegal for people to get together for employers to get together on price-fixing agreements and some unions have been strong by offering in effect their services to employers as a way to hold up prices and fix them in a way that is legal and gets around the Antitrust Act the most important historical case of that was back in the 1930s when John L Lewis used his coal miners Union as a way to enforce with the aid and consent and agreement of the coal miners a high price on coal he was perfectly willing to see the number of members of his Union go down and in return to compensate those who remain by sharing with the employers the returns from monopolizing the coal industry another very important case of this has been the Teamsters Union which in various places has produced monopolistic situation in brewery and beer by enforcing fixed prices on beer through union activity well now enough for unions what about government here again government protects some workers and I've already mentioned some of the measures whereby they do all of these measures which strengthen unions such as a Walsh healy davis-bacon area such as licensing such as minimum wage laws are all governmental measures which do protect some workers by strengthening the unions again the high paid workers not the low paid ones in addition the government also protects government workers you know it's interesting to consider let me ask you what you said but what do you suppose is a richest County in the United States what do you suppose is a county that has a highest per-capita income well now most people would say well that maybe maybe that's Westchester County the high-income County around near New York or maybe that's DuPage County north of Chicago where the wealthy people live around Chicago or maybe it's one of the counties in Connecticut the bedroom community for the executives of New York all of those are high wage counties but that isn't the highest County in the country the highest income county in the country is the county in Virginia adjacent to to the District of Columbia which is a bedroom community for government employees that's the highest income county in the country there was an article in The Wall Street Journal just within the last week from which I cannot resist quoting something said The Wall Street Journal in its article about the federal civil service as the Civil Service regulations have ballooned to fill 21 volumes some five feet thick government managers have found it increasingly difficult to fire employers employees at the same time promotions and merit increases have become almost automatic the result is a bureaucracy nearly devoid of incentive and largely beyond anyone's control of the 1 million persons eligible last year for merit raises only 600 did not receive them now I have no reason to suppose that those a lot of those million workers didn't deserve merit increases but do you really think the 999 thousand 400 of them deserved merit increases if so you've had better experience with federal employees than I offend The Wall Street Journal goes on almost no one is fired less than 1% of federal workers lost their job last year life is pleasant in the bureaucracy the average annual salary is fifteen thousand three hundred and forty three dollars and most employees are due to get a 7.0 5% raise in October well that's a group of workers from the government protects the states and cities of course offer other examples but once again you should ask at whose expense and the answer is obvious at the expense of people in the main who have lower incomes it's at the expense of the taxpayer it's because of this that 40% of the income of the American people today goes to pay for the costs of government at state local and federal levels about 26% at the federal level and about 14% at the state and local levels what about the Mitch bruited and the much noted in numerous laws that ranged from workman's compensation to child labor minimum wages federal Fair Employment Practices Commission's affirmative action hour and wage laws Oh sh oh and you pick out any other four letters from the alphabet and you'll have another one now some of these measures have had some effect and some times they've had a favorable effect on workers but most of the favorable ones for example workman's compensation laws child labor laws have been a embodiment into law of practices that have already become widespread before they became law and most of them have simply extended to certain fringe areas practices that had already developed independently most of the rest of these measures benefit bureaucrats at the expense of the rest of us rather than benefiting the workers the o sha has a very large bureaucracy and an increasingly but it hasn't been very effective in improving a lot of workers and so on down the line now what about the third answer that nobody protects the workers again that's true for some workers but who there are two classes of workers who are not protected by anybody they are those workers who have effectively only one possible employer and second they are those workers who have no possible employers who are those with only one possible employer well obviously that applies to all the workers in a country like Russia or China or Cuba if you have a totalitarian government in which a totalitarian country in which the government is the only employee earth then there is nobody who protects the worker he's at the complete mercy of that government and the result has been perfectly clear the ordinary worker in these totalitarian countries is very badly off his level of living is low his conditions of work are poor his freedom is limited some of the bosses in those countries do very well the people in charge an opponent Bureau the people at the top and the bureaucracy some of them do extremely well but the ordinary worker has nobody to protect him in our own society it's very interesting again you have a paradox like the Union paradise the people who have only one employer possible employer tend to be very high paid people the classical example that we always used to give in our economic courses was Babe Ruth Babe Ruth the great homerun King was as you know the most popular and the the most widely known baseball player of his tongue it so happened that the Yankees had the large Stadium of any of the baseball clubs at that time and so they were the only people they were the only people who for whom Babe Ruth could work and really get the full value of his work because he could fill the Yankee Stadium he could fill and he could also fill any of the other stadiums but the Yankees had a great advantage over any other team in hiring him because they had the biggest stadium as a result he really only had one potential employer in the sense that the next-best was way down that doesn't mean he didn't do very well but it meant that nobody was protecting him except himself he was protecting himself through his skills but it was a matter of bargaining with the employer in the same way today until recently when you have a considerable degree of unionization in the professional athletes the baseball football players had only one potential employer because the employers that arranged to get an exception through the law whereby you had essentially a slave contract with a baseball or football player once he was signed up with one company he couldn't freely negotiate to go and play with another team and as a result he had very little protection similarly if I have a highly skilled man whose skills are so great that only one company can use it he has other possibilities but they're in a much lower level nobody protects him who are the people in our society who have no possible employer in our society most of the people who have no possible polloi employer are the result of governmental measures the minimum wages have been the most important factor that have created a large class of people who have no possible employer and the adverse effects of the minimum wages have been greatly exacerbated by the poor education which is provided by the government we start out with having governmental schools in Harlem that are terrible and for a variety of reasons provide lousy education so we end up with people and dropouts from schools and kids coming out from school have no skills and then we say to them and we say to employers huh you can't remedy our defects by hiring these people and teaching them because we won't let you hire them unless you're willing to pay them more than they're worth so the effect of the double whammy of poor governmental educational arrangements on the one hand and a minimum wage on the other is to create a class of people who have essentially in fact no possible employer now let me turn I believe that what I've just said about the case in which nobody protects people shows the way to the right answer who protects the worker workers are protected by employers not by his own ploy employer because the man who has only one possible employer has no protection the employers who protect a worker are the people who would like to hire him but for whom he doesn't work the real protection that a worker gets is the existence of more than one possible employer that's what gives them freedom that's what enables them to get the full value of his services it's competition it's a free market in which you have a diversity of sources of employment which provides the effective protection to the worker this is a very general feature of the free market which applies in every area and every direction a worker is protected from exploitation by his own employer by the existence of alternative people four only can go to work the employer is protected from exploitation by his employee by the existence of alternative people he can hire again if I as an employer had only one man who could do the job I needed to have done I'd be at his mercy he could take every penny up to the point where I went out of business what protects if I'm an employer what it protects me is that there's more than one person I can hire the consumer and his capacity as a purchaser of goods a purchaser of goods and services he's protected by the existence of alternative sellers why do we have lousy postal service because there's only one place you can buy it why do we have terrible schools of course there are some good schools here's an example have a good auditorium I don't know that it's a good school it's a marvelous auditorium I suppose it was paid for by the people who use it was it who paid for it did the people who pay for it have a choice well you can answer those questions yourself they're too obvious for me to spend any time on but in general the reason why schooling is backwards and we have not had the kind of technological advance in schooling the reason why SAT scores have been going down an educational performance has been going down because we don't have any large number of alternative schools so in every area what protects the worker what protects the employer what protects the consumer is always the existence of variety and alternative and of course every group in our society that wants to get a privileged position tries to protect itself from competition by others the workers try to protect themselves from competition from other employees by forming unions getting government licensure having Arrangements under which they can limit the number of people who can get certain kinds of jobs producers try to get protection against competition by getting the by having employers organism visions forming monopolies cartels or by getting the government to impose tariffs or restrictions on imports or to give them special advantages of other kinds so ours we are all of us the same way we want to avoid competition and yet it is a competition that effectively protects us in our various forms it protects the worker by providing alternative opportunities for employment it protects the employer by providing alternative employees it protects the consumer by providing alternative products so the conclusion which I would suggest to you is that the real way to make sure that the worker continues to be protected that the gains in our standards of life that we have had or as workers over the past hundred and fifty two hundred years continue the real way is to make sure that we preserve the existence of competition and a free markets unions can and do serve many useful purposes but they also can do great harm if they interfere with competition and freedom of markets the same is true of organizations of employers employers associations Canon do serve many useful purposes provided there is free entry in all cases we must try to preserve freedom for alternatives try to preserve the freedom of workers to join or not to join a union the freedom of employers to contract with a union or not to contract with the union and to keep the government neutral in this business let the government attend to the things that ought to be attending to and not get involved in establishing positions of privilege either for workers on the one hand or for employers on the other thank

Channel: BasicEconomics

Views: 252,188

Rating: 4.8365097 out of 5

Keywords: liberty, Milton Friedman, Economy, Economic, Freedom, Economics (Field Of Study), Inflation, Money, Taxes, Tax, Policy, Free, Trade, Free Trade, Consumer Protection, ralph nader, Worker's Rights, Fair, Employment, Practices

Id: EJEP7G7C0As

Length: 52min 2sec (3122 seconds)

Published: Sat May 12 2012

Reddit Comments

[u/conanbatt]

Grandes frasecitas de la charla:

• Unions represent high earning workers, as high earning workers can have strong unions, and strong unions increase worker earnings

• The only way unions can increase the pay is to reduce the amount of workers. They cannot increase the amount of workers and the price of labor at the same time.

• Higher pay for unions means lower pay for everyone else. Even though unions have increased salaries of their workers by about 10%, it has increased prices for everyone else, by making the products they produce more expensive to everyone else, including the workers.

• The problem with salary negotiation is that unions negotiatiate with the government, that is not the one that pays their salary. Its tax payers that pay their salary. (En nuestro caso, el gobierno tambien decide cuanto pagan las empresas!)

• (traduciendo culturalmente) Suponete que le decis a una persona que le nacionalizas la fortuna a Jorge Brito, dueño del Banco macro, como medida de redistribucion de ingreso. Esa persona te dice "Dale! quiero mi aumento de sueldo!". Entonces el tipo le da 32 dolares, 1 sola vez, y listo. Eso es todo lo que se logro.
  (Es un ejemplo para explicar que el salario 'no se lo quedan los ricos' porque aun si redistribuyeses lo que producen, no seria significativo para le ingreso de la gente).

Voy agregnado mas a medida veo mas.

[u/HolyAndOblivious]

Como todo buen economista del siglo pasado, quedo anticuado.- No da cuenta de la productividad por trabajador y como esta aumento en los ultimos 60 años.

Antes una fabrica de autos tenia 3000 empleados y producia 1000 autos por dia. Hoy tiene 2500 y produce 3000 autos por dia. Tranquilamente los sueldos pueden aumentar sin tocar una ganancia mas que aceptable.

Tanto Friedman como Marx quedaron totalmente obsoletos por los cambios economicos de los ultimos 60 años.

[u/[deleted]]

Un capo Friedman. De los mejores economistas de la historia.