Unfair Labor Practices? Why Don’t You Go Somewhere Else?

by | Jan 7, 2023 | Business

Unionized workers effectively form a cartel that would be illegal under antitrust laws as an obvious “restraint of trade” if unions had not been specifically exempted from the rules.

“If you hate Starbucks so much, why don’t you go somewhere else?” In Michael Hiltzik’s Los Angeles Times article, “Why Starbucks has become a huge unionization target–and why the company is in a panic,” that is what Howard Schultz, head of Starbucks, reportedly told  Madison Hall, a barista and union organizer at a Long Beach Starbucks, when Schultz did not want to discuss Hall’s allegations of unfair labor practices.

Hiltzik used that quote to demean Starbucks as a company that has “undervalued their [workers’] contributions to business success,” and is “an employer so cold to the welfare of its workers that they’re spurred to organize.” Such sentiments have only grown with the Starbucks union drive, as reported by Dee-Ann Dubin in a recent Los Angeles Times article , which quoted barista Micah Lakes about “what we need from the company,” which Lakes said was “better pay, more consistent schedules and higher staffing levels.” While both narratives fit the typical union-supporting and left-leaning scripts, Schultz’s alleged statement does not deserve condemnation.

With increasing numbers of Starbucks in California now unionized, and similar changes in some other states, “Why don’t you go [work] somewhere else?” deserves more serious consideration rather than being dismissed as only an ad hominem attack of pique. It is a legitimate question, worth thinking about more carefully.

If Hall or any of the other disgruntled employees were recognized as being more valuable to some other businesses’ success than at Starbucks, they would have been able to attract better compensation offers from those potential employers. That, in turn, would allow them to better achieve whatever their ultimate goals were in another job. They would advance their interests by taking that job. So why not do that? “Why aren’t you choosing to do what would advance your self-interest?” is a question worth considering.

Alternatively, if no better offers were forthcoming, then there is no reason to conclude that dissatisfied employees are being undervalued at Starbucks compared to other employers. Consequently, they are better off in their current circumstances than they would be elsewhere, all things considered. That is, Starbucks benefits them more than any other potential employer, in the employee’s own judgment.

Even if Hall decided that “I just couldn’t just walk away from a job that I love without trying to make it better,” that would not justify trying to force Starbucks to benefit employees even more. For an employer not to pay a worker more than they add in value to an employer’s output is not “cold to the welfare of its workers,” and such choices don’t make employers into organizational orcs hostile to workers.

We all make similar benefit versus cost tradeoffs in our nearly uncountable market arrangements whenever we are allowed to make our choices voluntarily.

Even employees who know they benefit from their relationship with Starbucks, revealed by the choice to continue to work there, might well still be “spurred to unionize.” Why? Because government has endowed unions with special powers allowing them to coerce others, extracting more from others than would result from voluntary arrangements.

Unionized workers effectively form a cartel that would be illegal under antitrust laws as an obvious “restraint of trade” if unions had not been specifically exempted from the rules. By way of government coercion and government-granted special privileges, they restrict others’ ability to compete for “their” jobs, giving themselves leverage to force overpayment for their services. So even if a worker was in what he considered the best job available without coercion, the coercive power government has created for unions could make him still better off at the expense of others. Those producers targeted (like Starbucks) are not the only losers. Everyone not part of the union must pay more for products which makes calling such efforts ‘pro-worker’ a real stretch.

This was made quite clear by Danielle Echeverria in a recent San Francisco Chronicle article entitled “First California Starbucks to unionize becomes the first to go on strike.” The union gave workers the power to shut down the Santa Cruz Starbucks, but only because government gave the union the power to keep others from competing for those jobs, which workers do not otherwise have. Workers’ demand that Starbucks negotiate “in good faith” (often code for “give us what the union demands or else”) made it clear that what they wanted was what Samuel Gompers wanted: “More.”

When a group of current workers form a union, government grants them power over their employer which none of them had when they accepted an offer of employment. The initially voluntary arrangement with their employer, whose continuation was subject to both sides’ ongoing agreement, is transmuted into effective ownership of the job, that the employer would not have voluntarily agreed to. The employer has lost his right (the union has infringed on) employers’ right to decide who they will associate with, and on what terms, a right they clearly had when they entered the voluntary employment relationship.

Hiltzik, writing in the LA Times, indicts Starbucks for using what he called “the canonical corporate anti-union playbook,” which asserts that American unions often seriously “disrupt the smooth working of the company” and that they “make it impossible for workers to deal directly with management.” But saying that such claims are common does not mean they are untrue, since all such arrangements must go through unions, and the very substantial dues often overcharge workers for those union-provided “services” (including spending millions electioneering for a party whose policies many workers oppose). And once a union is formed, there are huge impediments to doing anything about it, regardless of worker dissatisfaction.

In contrast, pro-union articles say nothing about the fact that prospective unionizers also follow their long-term playbook, with its host of misrepresentations. They ignore that unions’ Democratic patrons have been pushing to massively expand the special privileges unions already have and punish non-union workers and employers, such as the proposed PRO Act at the federal level, and the FAST Act in California.

As an entreaty from an employer to a worker, “Why don’t you go somewhere else?” deserves more respect. It is not callous nor uncaring. In many areas of our lives, to exit (to other opportunities) is often a more effective mechanism than to negotiate (talking others into adopting your point of view). You are not a cold-hearted curmudgeon every time you take your business elsewhere, when unsatisfied with your current arrangements. It is why America’s Founders thought “voting with your feet” was a core protective feature of federalism. Advocates of unionization efforts, who utilize exit opportunities to their advantage throughout their lives, would deny similar exit protections to employers and unwilling workers, forcing them to abide after a one-time majority vote to unionize.

Made available by the American Institute for Economic Research.

Dr. Gary Galles is a Professor of Economics at Pepperdine. His research focuses on public finance, public choice, the theory of the firm, the organization of industry and the role of liberty including the views of many classical liberals and America’s founders­. His books include Pathways to Policy Failure, Faulty Premises, Faulty Policies, Apostle of Peace, and Lines of Liberty.

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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