Exploiters vs. Victims in the Grocery Strike
By Elan Journo and Brian Simpson (Los Angeles Times, January 29, 2004; Orange County Register, February 20, 2004)
The California grocery strike has entered its fourth month--and there is no end in sight. Workers are still picketing stores, the shelves are under-stocked, and profits are dwindling. Talks between the grocery chains and the United Food and Commercial Workers' union have failed to resolve the mutually harmful conflict. Why?
If the union's demands are outrageous, why can't the stores walk away? The stores have hired substitute employees, so evidently some people accept the stores' working conditions. Why can't the stores fire the strikers and end the dispute? The stores can neither back out nor dismiss strikers because they are forced by law to deal with the union. That coercive power of the union is a gross violation of the employers' and workers' rights.
Imagine if laws existed requiring shoppers to buy groceries from one store only, but allowed some room for haggling over price. Would the trade between a shopper and the store be considered voluntary? No. Everyone would scream that individuals should be free to shop wherever they pleased and not be forced to buy at any one store. When it comes to hiring workers, this is exactly the predicament of employers. By law they must deal only with whatever union is voted for by employees. Just as shoppers have the right to choose the terms of trade, so should an employer.
But the National Labor Relations Act, passed in 1935, negates that right. The law makes it illegal for employers to refuse to negotiate with a union or get rid of striking union workers. It is no surprise that every round of talks between the grocery stores and the UFCW has collapsed. The union can demand anything, however outrageous, and the stores are obliged by law to negotiate in good faith. Though an employer may hire replacement workers, the law requires him to give strikers first preference for any new vacancies.
The law violates the rights of workers, too. Seventy thousand UFCW members who work in grocery stores in Southern California are on strike or locked out, but a significant number of them did not vote in favor of the strike. Dissenters who think that the strike will cause long-term harm to their employers--and could cost them their jobs if the stores go bankrupt--have little say in the matter. If a majority of workers choose to unionize, the employees (including all future hires) must join and pay dues. None of them can accept a labor agreement other than that approved by the union. (Recently, there have been reports of union workers trying to return to their jobs under assumed names, hoping that the union won't notice. The union has filed suit to prevent this practice, which it says the stores have connived in.)
What is at issue in this dispute? Facing intensified competition, the stores wanted to lower costs by having workers share a portion of the expense for their medical benefits. Knowing that it can refuse with near impunity, the union rejected the proposed labor agreement. What is important here is the stores' right to set the terms of employment, which is abrogated. A rational employer expects to pay wages that enable him to earn a profit--not so high that he has to raise prices and lose customers, but not so low that he cannot attract and retain capable workers.
But unions pride themselves in artificially raising wages beyond the market price for such work. When demanding higher wages, unions do not promise employers that union workers will do a better job or be more productive. They don't have to. The union has a coercive power over employers. The California grocery stores will soon have to compete with Wal-Mart, which plans to open grocery stores in the state. They are right to be worried. At unionized stores in California workers get paid $10 per hour more than those at a nonunion store. Those artificially high wages have an impact on prices: a cart of groceries is 17 to 39 percent cheaper at nonunion stores.
The solution to this strike and all similar disputes is to recognize the rights of traders--be they workers or employers--to reach mutually advantageous agreements voluntarily. The power of unions to coerce unearned benefits for their workers, while crippling employers, is unjust. Repealing the NLRA should be a first step toward restoring the principle of individual rights as the proper basis for interaction among men.
Elan Journo is a junior fellow at the Ayn Rand Institute in Irvine, Calif. Brian P. Simpson, PhD in economics and author of Markets Don't Fail!, is an assistant professor at San Diego's National University and a guest writer for the Ayn Rand Institute.
The Institute promotes Objectivism, the philosophy of Ayn Rand--author of Atlas Shrugged and The Fountainhead.