Triumph of Free Trade
The Decline of the Unions
By Daniel Muniz

President Bush signed the Central American Free Trade Agreement (CAFTA) into law, which is an agreement that abolishes tariffs on exports to Costa Rica, El Salvador, Honduras, Guatemala, Nicaragua and the Dominican Republic. CAFTA in itself is insignificant compared to the enormous size of the American economy but the ramifications to the future of unions are now in question.

Although the margin of passage in the House of Representatives was extremely close, the outcome of the vote itself was never debated. If it looked like CAFTA was going to fail, a few simple phone calls were all that would be needed to change a handful of votes. And the real influence of organized labor was much too small to make any type of real impact to the ultimate result.

So, what really happened to unions?

Back in the great manufacturing age of the 1940’s,’50s, and ’60s, big unions were as part of the American culture as was big business. At its height, union membership constituted almost more than one out of every three private-sector workers. And this type of membership exercised enormous influence in the political and social fabric of the country and even into foreign policy.

But both icons have been tarnished. Many corporations of big business teetered with bankruptcy while the numbers of big labor greatly dwindled down to near extinction.

In fact, only the rise of big government has barely kept organized labor alive. And big government today has more disdain than it has in admiration.

But the decline of big labor as well as big business is in essence a good thing. The union bosses had a quaint misunderstanding of economics. Big business along with big labor thought that the paradigm of monopolistic practices would forever endure in the American economy.

They were wrong.

Market forces have an insatiable appetite for continually finding more effective and efficient processes which in all reality, abides by no paradigm. In fact, a true free market society doesn’t have borders.

As a result, unions have come close to extinction.

And the transformation of the American economy also changed the dynamics of organized labor. In fact, many of the places were unions can still survive is only because of monopolistic environments that the government and courts have allowed to exist. Without such artificial protection such as public education, organized labor would have ceased to exist by now.

Ultimately, competition changed the economy as well as the culture. And it changed union membership.

Today, a consumer can purchase a car from many different countries instead of only from the Big Three auto manufacturers. And the same can be said of many different products that are now available.

The survival of unions for the future seems to only depend on the government.

The government itself, federal and local, has embraced market economics. Only the supporters of big federal and local governments have halted the full embrace of the free market. But every year, more outsourcing and privatization occurs leaving only the biggest and most ostentatious unions (like the teacher’s union) to face a more demanding and critical public.

Organized labor has to either accept market economics or find a way for it to become less important in American society, which is becoming increasingly difficult in a global marketplace.

Meanwhile, market economics continues to transform not only the United States but also the rest of the world. It continues to provide better products and services at lower prices which may ultimately be the end of organized labor.

Any opinions or views expressed herein belong solely to the author and does not represent any employer, organization, political party, governmental agency, or any other entity and do not necessarily reflect the views of the site owner or its participants.