A Great Partnership: Small Business and Labor
The month of September begins with the celebration of a great holiday, Labor Day. On this day we celebrate the entrepreneurial spirit and hard work that has produced the greatest nation and economic system in the world. The holiday was first celebrated on Tuesday, September 5, 1882, in New York City. There is still some doubt as to who first proposed the holiday.
One story has Peter J. McGuire, the general secretary of the Brotherhood of Carpenters and Joiners as the originator. McGuire suggested a day to honor those “who from rude nature have delved and carved all the grandeur we behold.” However, many believe that Matthew Maguire, a machinist, proposed the holiday in 1882. Regardless, by 1884 the first Monday in September was selected as the holiday, as originally proposed.
Unions historically represented skilled workers and craftsmen evolving from the guilds of the past. These guilds were associations based on trades, carpenters, carvers, glassworkers, machinists, masons, printers, typesetters, and textile workers. Each guild closely guarded and controlled the skills, technology, and training needed to become a master craftsmen. The founders and leaders of these guilds were free and independent master craftsmen carefully imparting the skills of their crafts and maintaining rigid quality standards.
Recently, I read an article entitled “Unions: No laughing Matter.” This article did not make me laugh. It was a vain attempt to paint a smile on unions and belies the fact that most unions no longer represent and promote skilled workers. Having strayed from their core purpose, this union, like many others, still relies on tired old counterintuitive rhetoric that “it is the interest of big business to increase the bottom line and corporate America does this at the expense of workers who are producing the country’s wealth.” They miss the point almost entirely. It is not simply “the interest of big business” to increase the bottom line; it is the only reason to run a business either large or small. Wealth is created when the entrepreneurial spirit, risk-taking, is combined with capital and labor which then successfully produce a profit. A profitable business produces jobs and wealth with no losers.
The idea that profits result from the abuse of the worker fails to explain why workers in the technology industry and most of the private sector today remain happily union free and well compensated. This same notion fails to adequately explain why union organizing focuses on public employees. Do local, state, and federal governments exploit their workers? Do these workers need to be protected from greedy owners? Wait a minute! The public sector is owned by taxpayers and supported by their tax payments. Unions simply exploit these public workers by extracting large monthly payments (dues) at the expense of the middle class taxpayers.
My father was a skilled craftsman represented by a union. His union provided all of his medical and retirement benefits as a simple deduction from his paycheck regardless of which company employed him; portability back in the 50’s and 60’s. Companies that hired workers from this union knew they were getting a skilled craftsman who would work hard and provide a high quality finished product while the laborer was assured of getting a good wage and benefits. This is the kind of partnership that most often exists between business and labor which produces benefits for all. This win/win is also responsible for producing our great economic system.
We have a culture that celebrates risk-taking; believing also that those entrepreneurs who work hard, take-risks, and combine capital and labor should reap the rewards (i.e., profits). These entrepreneurs create small business and 60% to 80% of all jobs. Profitability allows them to grow and become big businesses creating even more jobs. It is appropriate that we as a nation pay tribute to the creator of so much of the nation’s strength, freedom, leadership and wealth: the American employer and their employees.
