Thus we are driven to the conclusion that unions, though they may for a time be able to secure an increase in money wages for their members, partly at the expense of employers and more at the expense of nonunionized workers, cannot, in the long-run and for the whole body of workers, increase real wages at all.
The belief that they do so rests on a series of delusions. One of these is the fallacy of post hoc ergo propter hoc, which sees the enormous rise in wages in the last half century, due principally to the growth of capital investment and to scientific and technological advance, and ascribes it to the unions because the unions were also growing during this period. But the error most responsible for the delusion is that of considering merely what a rise of wages brought about by union demands means in the short run for the particular workers who retain their jobs, while failing to trace the effects of this advance on employment, production and the living costs of all workers, including those who forced the increase.
One may go further than this conclusion, and raise the question whether unions have not, in the long run and for the whole body of workers, actually prevented real wages from rising to the extent to which they otherwise might have risen. They have certainly been a force working to hold down or to reduce wages if their effect, on net balance, has been to reduce labor productivity; and we may ask whether it has not been so.
With regard to productivity there is something to be said for union policies, it is true, on the credit side. In some trades they have insisted on standards to increase the level of skill and competence. And in their early history they did much to protect the health of their members. Where labor was plentiful, individual employers often stood to make short-run gains by speeding up workers and working them long hours in spite of ultimate ill effects upon their health, because they could easily be replaced with others. And sometimes ignorant or shortsighted employers might even reduce their own profits by overworking their employees. In all these cases the unions, by demanding decent standards, often increased the health and broader welfare of their members at the same time as they increased their real wages.
But in recent years, as their power has grown, and as much misdirected public sympathy has led to a tolerance or endorsement of antisocial practices, unions have gone beyond their legitimate goals. It was a gain, not only to health and welfare, but even in the long run to production, to reduce a seventy-hour week to a sixty-hour week. It was a gain to health and leisure to reduce a sixty-hour week to a forty-eight-hour week. It was a gain to leisure, but not necessarily to production and income, to reduce a forty-eight-hour week to a forty-four-hour week. The value to health and leisure of reducing the working week to forty hours is much less, the reduction in output and income more clear. But the unions now talk about, and sometimes enforce, thirty-five and thirty-hour weeks, and deny that these can or need reduce output or income.
But it is not only in reducing scheduled working hours that union policy has worked against productivity. That, in fact, is one of the least harmful ways in which it has done so; for the compensating gain, at least, has been clear. But many unions have insisted on rigid subdivisions of labor which have raised production costs and led to expensive and ridiculous “jurisdictional” disputes. They have opposed payment on the basis of output or efficiency, and insisted on the same hourly rates for all their members regardless of differences in productivity. They have insisted on promotion for seniority rather than for merit. They have initiated deliberate slowdowns under the pretense of fighting “speed-ups.” They have denounced, insisted upon the dismissal of, and sometimes cruelly beaten, men who turned out more work than their fellows. They have opposed the introduction or improvement of machinery. They have insisted that if any of their members have been laid off because of the installation of more efficient or more laborsaving machinery, the laid-off workers receive “guaranteed incomes” indefinitely. They have insisted on make-work rules to require more people or more time to perform a given task. They have even insisted, with the threat of ruining employers, on the hiring of people who are not needed at all.
Most of these policies have been followed under the assumption that there is just a fixed amount of work to be done, a definite “job fund” which has to be spread over as many people and hours as possible so as not to use it up too soon. This assumption is utterly false. There is actually no limit to the amount of work to be done. Work creates work. What A produces constitutes the demand for what B produces.
But because this false assumption exists, and because the policies of unions are based on it, their net effect has been to reduce productivity below what it would otherwise have been. Their net effect, therefore, in the long run and for all groups of workers, has been to reduce real wages—that is, wages in terms of the goods they will buy—below the level to which they would otherwise have risen. The real cause for the tremendous increase in real wages in the last century has been, to repeat, the accumulation of capital and the enormous technological advance made possible by it.
But this process is not automatic. As a result not only of bad union but of bad governmental policies, it has, in fact, in the last decade, come to a halt. If we look only at the average of gross weekly earnings of private nonagricultural workers in terms of paper dollars, it is true that they have risen from $107.73 in 1968 to $189.36 in August 1977. But when the Bureau of Labor Statistics allows for inflation, when it translates these earnings into 1967 dollars, to take account of the increase in consumer prices, it finds that real weekly earnings actually fell from $103.39 in 1968 to $103.36 in August 1977. 
This halt in the rise of real wages has not been a consequence inherent in the nature of unions. It has been the result of shortsighted union and government policies. There is still time to change both of them.