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In my previous report, “How to Break the Chicago Teachers Strike in Seven Days,” I discussed the economics of the teachers union. You can read the report here.
The American Federation of Teachers is a paper tiger. The organization bases its bargaining ability on what is now a legislated restraint, namely, the shortage of teachers. There is no shortage of teachers at the wage scale that is imposed by the American Federation of Teachers on local school boards.
Any school board that will publish a “help wanted” ad that is based on the prevailing annual salary of any teacher in the district, including the lowest-paid teacher, will find that it has a glut of applications.
Never say “shortage.” Always say “shortage at a government-mandated price ceiling.” Never say “glut.” Always say “glut at a government-mandated price floor.”
This means that the power of the teachers union is based entirely on legislation that grants to the teachers union the legal authority to strike. The threat of the strike, or the threat of intervention by the National Labor Relations Board, is what prevents any school board from reducing salaries by at least 25% across the board, and doubling the size of the classrooms.
There is not a school district in the United States that could not cut its overall expenses by at least 50% in one year by taking three steps: (1) cut the total budget allocated to administration to 20% of the total budget; (2) double the number of students in each classroom, and (3) drop next term’s salary levels by 25%.
If any public school teacher does not understand this, that teacher is completely out of touch with economic reality. Any school district that does not understand this is also out of touch with economic reality. With something in the range of 500,000 unemployed or marginally employed teachers in the United States, who are fully certified to teach, any district that pays today’s level of salaries to its teachers is simply flushing the taxpayers’ money down the drain.
THE RIGHT TO BID
A fundamental right of a free society is this: the right to bid. Anyone who meets the requirements of a job should have a legal right to bid. Anyone who offers a job should have a legal right to accept a bid. This is the essence of freedom. It is the essence of capitalism.
It is the essence of government-protected unions to violate this principle.
The key element in all of this in Chicago’s public schools today is government coercion. The government establishes the terms of exchange, thereby negating the right to bid by anyone who is not a member of a union. It also negates the right to accept the bid by anyone who is offering employment. The trade union movement is based on someone with a badge and a gun who sticks the gun in the belly of the person who is willing to accept the bid.
The trade union movement has never been in favor of the common laborer. The trade union movement has always been in favor of a minority of workers who have joined a union, whose union then meets the federal government’s legal requirements to establish itself as a monopoly for labor services. A vote of 50% plus 1 of today’s employees can keep out all future employees who do not join the union. The union is then given the right to call in someone with a badge and a gun, who then sticks the gun in the belly of someone who is offering to hire a worker.
The essence of the trade union movement is the use of violence, or the threat of violence, or both, in order to establish a monopoly of a privileged group of workers, who hold their position of privilege on the basis of political power.
The essence of the claim of the privileged union worker is this: he has a legal right to exclude anybody from competing against him who has not joined a privileged band of workers, who in turn are the beneficiaries of political favoritism.
He then makes the claim that he has ownership of his job. He says that an employer who offers to hire someone does not possess ownership of the job, for the employer is not allowed by the government to hire someone who is qualified for the job, and who is willing to work for a lower wage, or was willing to work longer hours, than the privileged holder of the monopoly job.
The worker is implicitly claiming ownership of his job. If he walks off the job, thereby ending the contract between him and the employer, he insists that he still possesses the right to that job. He insists that the employer must not be allowed to offer to hire somebody else, despite the fact that the privileged worker has walked off the job and refuses to work.
This civil law imposes financial loss on the person who wants to hire somebody else for the job. The union calls on the man with a badge and a gun, who then sticks the gun into the belly of the person who wants to hire somebody else, and tells that person: “You do not have the legal authority to offer employment to anybody who is not a member of the politically privileged group. The job is not yours to offer.”
When the employer first hired someone to work for him, he had the legal authority to make the offer. His company had not yet been unionized. But, after a majority of the workers who are presently employed get together and vote in the union, they can exclude all future workers who do not belong to the organization from legal access to the job. They do so on the basis of bringing in a man with a badge and a gun, and having that man threaten violence to the owner of the business. There is no other basis for union wages, which are above-market wages, meaning voluntary wages.
This arrangement of political privilege excludes nonunionized workers from that segment of the market which is represented by the company which is presently employing workers. The excluded nonunion workers cannot get access to these jobs, because the employer is legally prevented from hiring them.
WINNERS AND LOSERS
The excluded workers now must go into the labor market which is not marked by union membership and union control. These excluded workers are in competition with each other. They had offered to work at wages higher than what they are now forced to accept.
This arrangement involves a tremendous government subsidy to two groups in a highly unionized economy: (1) members of the privileged labor unions, and (2) employers in the nonunionized sectors of the economy.
There are two groups of losers in this arrangement:
(1) employers in the unionized section of the economy, who are not legally allowed to accept the bids of nonunion workers, and (2) all of the excluded workers who cannot gain access to membership in the unions.
Therefore, the claim of the union movement that it represents “the workers” is one of the biggest con jobs in the history of Western civilization. It is almost as great a deception as the phrase, “I’m from the government, and I’m here to help.” While it is true the government may help one person for a period of time, thereby creating dependence on the civil government, the government must penalize other members of society for its ability to make the promise to the individual who thinks the government is there to help him.
In a scarcity-governed world, it is not possible to get something for nothing. This is why the claim of the trade union movement, namely, that it represents the workers in general, is a preposterous claim. It achieves above-market wages and conditions for union members, but only because the union can call upon the government to threaten violence against other participants in the economy.
There is an unspoken economic alliance between the trade unions and employers in those sectors of the economy that are not under the dominance of the trade union movement. Neither group ever discusses the nature of the alliance. It would be too embarrassing. It would indicate that, in the name of helping workers in general, trade unions hurt the vast majority of workers. It would also indicate that, for those businesses that are not unionized, the trade union movement is very good for business. Those businessmen who are the beneficiaries of this arrangement are not interested in explaining the nature of the government subsidy. They are dependent upon the subsidy, which is why they do not fight trade unionism in general. They only resist trade union membership in their particular sector of the economy.
BOOKS, BADGES, AND GUNS
Because free market economics is not taught in high schools, but only a pro-union version of the labor market, most students never understand the nature of the convenient alliance between the trade unions and businesses in the nonunionized sectors of the economy. It is not in the self-interest of unionized teachers in the nation’s public high schools to present the case for economic freedom as it applies to the labor markets. Because it is not in their professional self-interest, teachers who serve on each state’s textbook-screening committee do not adopt textbooks in economics that present the labor market in the United States as the product of government coercion for the benefit of trade union members and employers in the nonunionized sectors of the economy.
Because trade union membership has fallen to under 10% of the private-sector labor market, trade unions no longer have much effect in benefiting privileged workers in this sector. Trade union membership benefits mainly those workers who are employed by various levels of civil government. Because the trade unions can mobilize workers to vote at state and local levels, or at least they are widely believed to be able to do this, state and local politicians have been afraid to challenge the trade unions, and deny them their right of excluding nonunion members.
The phrase “collective-bargaining” is accurate, but only because the collective involved is much smaller than the majority of workers. It is only because the trade unions can call in government officials with badges and guns to impose violence against employers who accept bids from nonunion members that unions can achieve above-market wages and working conditions for their members. The larger collective, namely, workers who are excluded from the privileged monopoly of union membership, are not represented by trade unions. There is no collective-bargaining for them, precisely because there is government-mandated collective bargaining for the privileged members of the working class. If there were not far more members of the nonprivileged working-class, trade union members could not gain above-market wages and conditions, because unionized rivals would bid down wages and working conditions.
Here’s another example of what the mid-19th century writer, Frederic Bastiat, referred to as the fallacy of this thing not seen. In this case, what is not seen by the general public is that the benefits gained by members of the privileged, unionized sectors of the economy are possible only because the government actively discriminates against nonunionized workers. Those workers are not seen by the public. The public does not understand the logic of economic cause-and-effect. Future voters are deflected from any understanding of “pro-labor” laws by unionized teachers, who use union-screened textbooks to teach economic theory and economic history.
The entire public school system is based on government coercion. The government taxes the public to set up schools that are screened by high-level members of the teaching profession, by university departments of education, by various departments of education, and by the entrenched bureaucracy of the Department of Education of the United States government. The privileged self-certified educational bureaucracy then establishes the standards for entrance into the guild.
The big problem that the existing bureaucracy faces now is that the system has certified so many teachers that there is a glut of teachers at the present wage level and present classroom size level which has been imposed on local school boards by the teachers union.
Ultimately, the strike threat is the major threat of the teachers unions, just as it is with all other unions. The best way to break the teachers union is to go outside of the union and accept offers from certified teachers who are not members of the union, or who are willing to cross the picket lines set up by the union.
This means that the school boards must tell the voters to tell the government to stop sending men with badges and guns to stick in the bellies of the members of the school boards. The school boards of America should stand up for their right to hire people who are certified as teachers, and who are willing to work for less money and teach three times as many students. They should be allowed to accept offers from entry-level teachers who are willing to work for less in order to teach at all.
NO TEACHERS GLUT
There is no glut of teachers in America. There is no glut of anything in America. There is only a glut of teachers at a government-mandated price that is established by the threat of violence by the government. There are people with badges and guns, and also bellies of school district officials into which to stick those guns. This has created the teacher glut . . . at present wages. There is no teacher glut at market wages. This wage level is much lower than today’s wage schedule.
The teachers union knows that this is the case, if not in theory, then at least in fact. This is why unions very rarely strike these days. They know that strikes make the voters mad, because the voters want free day care for their children, or at least half the day. They want latchkey children, because they do not want to pay a market price for private schools, or else they do not want to have mothers staying home to teach their children from online curriculum materials.
Those parents who have children in school, a minority within the community, demand that there must be free education paid for by taxpayers. In other words, it is the fallacy of the thing unseen. What is seen is the school system, with its football teams, air-conditioned buildings, manicured lawns, and all the rest of it. What is not seen is the huge volume of online material available for teaching, free of charge or close to it, which parents can adopt to teach their children. But, as more of these presently unseen alternatives become visible, the case for coercive education will become less tenable.
From top to bottom, the educational system is based on coercion. It is based on minority groups coming to the majority in the name of the benefit to society of continued coercion. It is all done in the name of the children. But, you may have noticed, nobody ever asked the children what they want. Nobody asks the children who are victims of bullying in the schools if they would like an alternative. Nobody asked the children in inner city schools if they would like an alternative. The only people who are supposed to be asked what is good for the children are members of a monopolistic guild that has used government coercion to grant them high salaries and small classrooms.
There are teachers in Chicago who are being paid $100,000+ a year to teach for eight months. They are tenured, so they cannot be fired. They cannot be fired because the contracts that the teachers union negotiated with the Board of Education do not allow them to be fired. But if those teachers had to teach 33 children in every class, six classes a day, a lot of them would quit. As soon as one of them quits, he can be replaced by an entry-level teacher who works for $50,000 a year to teach 33 students in the classroom. That can be done if the school board establishes that the principals can expel juvenile delinquents and non-learners. It is time for parents to go back to the scene in Lean on Me where principal Joe Clark throws out the hoodlums.
CONCLUSION
It is time for the Chicago school board to refuse to bargain with teachers union. Yes, it can maintain the illusion that it is bargaining, in order to placate the government bureaucrats with badges and guns, but in fact it should stall. It should make it clear to parents that there is no teacher glut in the city of Chicago, and that every teacher on strike could be replaced in a week with certified teachers at far lower salaries and with far larger classrooms. The general population of Chicago can be mobilized by effective public relations to back up the Board of Education and the politicians elected in Chicago if these officials take a stand against the teachers union, which has used violence and the threat of violence to gain control over who gets hired in the city of Chicago to teach the children.
I think the politicians in Chicago will capitulate to the union. That will mean that the inner-city students of Chicago will continue to be shortchanged by the system. What we need is not Joe Clark, as portrayed by Morgan Freeman, but Marva Collins’ husband, as portrayed by Morgan Freeman. In that magnificent 1981 movie, The Marva Collins Story, we learn of the gifted Chicago teacher, Marva Collins, who set up a private school in the middle of the ghetto, with her husband’s support. Her school began transforming the lives of a generation of students whose parents had the wisdom to pull them out of the Chicago public school system.
Until parents across the nation do as those parents did in Chicago, beginning a generation ago, there is no hope for education in the United States. It will get more expensive, and the quality of the education will continue to fall.
The definition of crazy is doing the same thing over and over when it produces bad results. When dealing with the question of education, voters in the United States are crazy. They continue to vote for a system which is broken in every respect, and which is acknowledged as being broken in every respect by the people who have broken it. The system is subject to reform, but every reform has made it worse. The system rewards incompetence, because it allows government agents with badges and guns to establish the system, police the system, and impose restrictions on anyone who would buck the system.
The solution to the crisis in education in Chicago is not to break the strike. It could be broken, but it should not be broken. The solution to the crisis in education of Chicago is to let the teachers remain on strike, and let the parents of the excluded children seek solutions comparable to those offered by Marva Collins, beginning a generation ago.
September 15, 2012
Gary North [send him mail] is the author of Mises on Money. Visit http://www.garynorth.com. He is also the author of a free 31-volume series, An Economic Commentary on the Bible.
Copyright © 2012 Gary North
