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‘Unions do very little for members’

Workers united: Residents, union leaders and politicians at last year’s Labour Day march. Our columnist suggests the day has been “hijacked by organised labour”, which in Bermuda, as elsewhere, is a minority of the labour force (File photograph)

Labour Day on September 7 will probably be a day of festivities, hot dogs and cliché-driven speeches, and I cannot think that there is anything sinister about the refusal of the unions to invite politicians. Nothing wrong with that and let’s hope everyone has an enjoyable day.

Sceptics such as myself like to point out that Labour Day has been hijacked by organised labour, which in Bermuda, as elsewhere in the world, means a tiny minority of the labour force.

In the United States and in Britain, organised labour is now between 5 per cent and 7 per cent of the labour force in private business. Similar percentages apply in Bermuda.

The vast majority of working Bermudians are not union members and, just as important, they have shown no desire to join a union.

By far the largest group of organised labour is now government workers, including teachers. Few employees who work in international business, the biggest industry, are union members, and hardly any of them take part in the Labour Day march.

Why do the majority of the labour force in Bermuda, as well as elsewhere, fail to join trade unions?

The answer is because unions do very little for their members, apart from issues such as giving advice, training or dealing with safety issues. Members are hoodwinked (or, more accurately, compelled) into joining on the false notion that their wages will be higher because of union activity.

What is not understood is that the cornerstone of unionism is compulsory membership and payment of union dues.

But the reality is that the overwhelming majority of employees, especially white-collar employees, are astute enough to see through the false promises of union propaganda and they vote with their feet for independence.

Indeed, I would go as far as to say that just about everything the public believes about unions, and how wages are determined, is just plain wrong.

The standard myth about unions is this: before unions were established in the 1940s in Bermuda, workers were exploited by ruthless capitalists — the old 40 Thieves — and their wages were a pittance.

However, riding to the rescue, like the US Cavalry in an old grainy black-and-white western movie, was the Bermuda Industrial Union.

It created and endlessly repeated the myth that without a union, workers would be working an 80-hour week, earning buttons not dollars, with no vacation pay and no medical insurance or any other benefits.

This mythical history is at odds with the facts. Even back in the 1940s and 1950s, Bermuda was one of the wealthiest countries in the world and wages were much higher than almost everywhere, including the US.

Employers rarely exploit their workers because capital works hand in glove with labour to produce prosperity for owners, managers and workers. It simply makes no economic sense to have an unhappy and unproductive staff.

Employers invest significant sums in the careers of their employees. They are their biggest asset and they entrust the day-to-day running of their businesses to them.

The free market is built on trust and being trusted. When that trust is violated, the firm goes bust.

Although foolish employers exist, and there are too many of them, they are the exception and, fortunately, they go out of business sooner rather than later.

In addition, many business people are impatient with traditional ways and the impression given, often rightly, is that they are offensive and lack understanding. Donald Trump is a case in point.

However, despite these shortcomings, the most helpful person in Bermuda is one who provides self-respecting, gainful employment. The least helpful are those who seek to harass, penalise and put out of business those who are willing to risk their capital in commercial ventures.

Public opinion, misguided by union propaganda, regards wage disputes as conflicts between employers and employees. It believes that employers have the power to determine wage rates without reference to the realities of the real world.

The general public, and even unions, fail to understand that the boss is not sovereign in the conduct of his business. He looks important, wears a suit and tie, signs the salary cheque and goes out to lunch with important people. All of that can be seen by everyone. What is not seen are the orders given to the boss by the firm’s customers.

Too often, we fail to understand that the boss is subjected to the orders of the firm’s customers. If the boss or the employer fails to keep the customer happy, the business shrinks and jobs are lost. The boss is not the real boss and he is not the real employer — it is the customer.

The only way to financial security is to serve the customer better and more cheaply than your competitor.

It cannot be overemphasised that it is the customer who is the boss; he is the one who determines which business is successful, and which business goes to the wall. In the final analysis, the customer is the one who determines the level of wages; not the boss and not the union. All of this is encapsulated by the statement “thank you for your business, please come again”.

The brutal fact is that unions don’t go on strike against employers, or against management. They go on strike against the public (or the customer). Faced with that prospect, the wise customer goes elsewhere.

Oversimplifying, this is what occurred in tourism in the 1970s and thereafter. Bermuda became expensive and overvalued relative to its competitors and the customers went somewhere else. The BIU had overlooked that we now live in a global world marketplace where customers have choices and the competition is intense.

Foreign workers gained, Bermudian workers lost out. Major hotel employers such as the Bermudiana, Belmont Manor, Sonesta Beach and Club Med closed their doors and jobs disappeared. Jamaica and Barbados cheered.

But then, economic history is all about policies that failed because they flouted and violated the timeless rules of economics.

In the words of Samuel Gompers, head of the AFL-CIO (American Federation of Labour and Congress of Industrial Organisations): “The worst crime against working people is a company which fails to operate at a profit.”

This brings me to the issue of public service unions, including the teachers’ union — of which I was once a member, and served on its executive.

Wages of public servants are paid for mainly from taxation, although a small proportion, such as bus fares, are paid for by the customer.

Recent events such as the public meeting in Number Six Shed this year illustrated the extent to which public service workers treat taxpayers and their representatives (in effect, their customers) with contempt and intimidating and boorish behaviour. Does anyone really believe that buses and ferries operate solely for the benefit of the public? Too often they are the shock troops of the Bermuda Public Service Union.

The message of the public service union was we are entitled to our wages and benefits, and the taxpayer has no say in this arrangement, even if he is suffering economic hardship and Bermuda is up to its eyes in debt.

In private business, such hostile behaviour would result in the customer disappearing. In public service, the taxpayer or the Bermudian citizen is either held to ransom by a slogan shouting rabble, or he leaves Bermuda. The predictable result of sticking it to the customer is that jobs and business have disappeared. In short, Bermudians are experiencing unemployment, financial hardship and, in many cases, poverty. This is a far cry from what Bermudians had experienced ten years ago.

In addition to treating customers badly, there is a failure on the part of the union leadership to appreciate that labour and capital are hugely dependent on each other.

Capital without skilled labour means machines (or hotels) with no operators. Labour without capital looks like North Korea or Bangladesh.

There is no other method of improving the wellbeing of workers than by the increase of new capital, and by the application of new and improved methods of working. This is the main way wages of every worker are increased, not by the confrontational methods used by unions.

It is true that workers of today are significantly better paid than they were, say, 50 years ago. The reason for that arises, not from activities of unions, but from higher productivity of the workers owing mainly to improved tools and investment by employers.

Few construction workers use picks and shovels, but now employ advanced mechanical tools. Office workers do not use typewriters, but computers. Cashiers do not input prices into a register, but scan items purchased.

Unions want their members to think that capital is something possessed and deployed by a minority of greedy bankers, the idle rich or a contemptuous elite.

But all workers are capitalists — every time we save and invest, own a house, buy a share in the company, contribute to a pension fund, or buy an insurance policy, we become indirectly capitalists and employers. Workers and employers are not enemies, but team-mates, except in the eyes of the Neanderthal union leadership.

In a recent opinion piece, Al Seymour emphasised the importance of employers and employees working together for their mutual benefit.

My criticisms of organised labour should end on a constructive note. May I suggest that in September, on even years have a Labour Day and on odd years have an Employers’ Day. This may assist Bermudians to understand more clearly that workers need employers, and employers need workers. That they are mutually dependent.

No one needs the existing retrograde, dead-end destructive philosophy of the present union leadership. Least of all, those suffering unemployment and deprivation.