Picking on Scabs

Jack London on the virtues of low productivity

Jack London would have voted for Bill Clinton. The popular, turn-of-the-century American adventure writer was a dedicated socialist and a strong supporter of workers generally and the rights of trade unions specifically. Bill Clinton's campaign promise to sign legislation prohibiting American employers from engaging permanent replacements for their striking workers would have been more than enough to guarantee London's support.

The legislation has already been introduced in the new Congress by Rep. Bill Clay (D–Mo.). It will guarantee all employees who go on strike that once the strike is over (if their company survives), the federal government will compel their employer to hire them back, even if it means discharging the very replacement workers who enabled the company to survive.

The result, if not the purpose, of this legislation will be to reward the 11 percent of the private work force who belong to labor unions at the expense of the 89 percent who don't. Employers will lose the only effective economic weapon left to them in dealing with unions. There will be less-productive and fewer American manufacturing workers and fewer unionized American companies able to compete on a global basis. There will be more strikes as American companies vainly struggle to improve productivity and unions resist.

Supporters may claim the legislation doesn't ban temporary strike replacements, but temporary replacements will be few and far between. It is difficult enough now for companies to find skilled workers willing to cross a picket line even for a permanent job. That is why a federal study found that only 8 percent of struck employers hired permanent replacements and that only 4 percent of all striking employees were permanently replaced in the two years studied, 1985 and 1989. It will be impossible to find skilled workers without the promise of a permanent job, especially when they know before they are hired that they will face daily the threat and fact of picket-line violence.

Indeed, a law that forbids permanent strike replacements will make it open season on temporary strike replacements. Jack London explains why: "The will 'to live' of the scab recoils from the menace of broken bones and violent death. With all due respect to the labor leaders, who are not to be blamed for volubly asserting otherwise, terrorism is a well-defined and eminently successful policy of the labor unions. It has probably won them more strikes than all the rest of the weapons in their arsenal. This terrorism, however, must be clearly understood. It is directed solely against the scab, placing him in such fear for life and limb so as to drive him out of the contest."

Unsurprisingly, London is something of an icon to organized labor, and what London wrote nearly 90 years ago in the February 1904 Atlantic Monthly about scabs and why unions oppose them is extraordinarily candid and highly relevant to the current situation faced by all unionized U.S. manufacturers who compete in the world market. Both Bill Clinton and his close friend, Robert Reich, the new labor secretary, would do well to study Jack London's essay "The Scab" before paying off their campaign debt to organized labor and blindly signing whatever strike-replacement legislation Congress sends down. As they will learn, the real reason for outlawing scabs is to lower worker productivity.

London openly admitted what today's labor leaders don't have the integrity to acknowledge. Here is his definition of a scab: "The sentimental connotation of 'scab' is as terrific as that of 'traitor' or 'Judas,' and a sentimental definition would be as deep and varied as the human heart. It is far easier to arrive at what may be called a technical definition, worded in commercial terms, as, for instance, that a scab is one who gives more value for the same price than another." (Emphasis in the original.)

More value for the same price. That is what organized labor wants to outlaw, and it doesn't matter that only 8 percent of struck employers used permanent replacements. London makes it clear that it is the threat of using strike replacements that is harmful, because it compels union members who have jobs to become even more productive—to work harder. He wrote, "The laborer who gives more time or strength or skill for the same wage than another, or equal time or strength or skill for a less wage, is a scab. This generousness on his part is hurtful to his fellow-laborers, for it compels them to an equal generousness which is not to their liking, and which gives them less of food and shelter."

What everyone really wants, according to London, is to become less productive and to avoid working hard: "It is not nice to be a scab. Not only is it not in good social taste and comradeship, but, from the standpoint of food and shelter, it is bad business policy. Nobody desires to scab, to give most for least. The ambition of every individual is quite the opposite, to give least for most."

Over the last 40 years, the American worker has not been moving in the direction of giving the least for most. Fortune magazine reports that gross domestic product per employed person increased from $25,000 to $45,000 during this period; while average annual manufacturing work hours per person stayed at 1,900. During the last 15 years, Forbes magazine reports, total manufacturing output increased by 26 percent, while factory employment declined by nearly 1.5 million jobs. Wages and benefits, adjusted for inflation, stayed level, while output per employee increased by 37 percent.

More production. Fewer people. The same hours. Lower cost. Greater productivity. So why aren't unions happy that American workers are doing so well?

Because unions are in a different business from the employers for whom their members work. Union revenue depends upon membership dues, and the loss of 1.5 million manufacturing jobs has been largely at the unions' expense. Union membership as a percentage of the private work force has declined from nearly 35 percent in the early 1950s to 11 percent today. The sharpest decline has come in the last 15 years.

Despite gains in other nations, the American worker remains more productive than his foreign counterparts: Japanese workers are only 80 percent as productive as their American counterparts, and Germans are only 75 percent as productive. While unions and their supporters complain that America is being left with low-pay, low-skill jobs compared to our competitors, the opposite is true. Low-skill, low-pay assembly jobs may have gone to the Far East or to Mexico, but the U.S. manufacturing workers remaining are not only the most productive but are still among the best paid, in both absolute and relative terms.

While many European countries, including Germany, have higher absolute labor costs, the gap disappears when adjusted for purchasing power. And Japanese workers earn hourly compensation that is 93 percent of what U.S. workers make in absolute terms, a gap that grows much wider when adjusted for purchasing power.

This productivity accounts, in part, for the fact that U.S. exports have doubled in the last six years, to nearly $450 billion, and represent 20 percent of U.S. industrial output, adding over 1.5 million jobs from 1989 to 1991. In 1991, the U.S. was the world's largest exporter, with Germany and Japan in second and third place.

None of this would be news to Jack London, because the same thing was true in 1904. London thought it was a problem then, and he would consider it a problem today. Americans are too damned productive compared to foreigners. Or, as London phrased it, "At the present moment all Europe is appalled by that colossal scab, the United States." London wanted American productivity cut and scabs stopped.

It didn't matter to him that American wages in 1904 were 10 times higher than English wages; the Americans still worked too hard: "The Union laborers of the United States have nothing of which to boast while, according to their trade union ethics, they have a great deal of which to be ashamed….It is upon his brother laborers overseas that the American laborer most outrageously scabs….An English nail-maker gets $3 per week, while an American nail-maker gets $30. But the English worker turns out 200 pounds of nails per week, while the American turns out 5500 pounds. If he were as 'fair' as his English brother, other things being equal, he would be receiving, at the English worker's rate of pay, $82.50. As it is, he is scabbing upon his English brother to the tune of $79.50 per week. Dr. Schultze-Gaevemitz has shown that a German weaver produces 466 yards of cotton a week at a cost of .303 per yard, while an American weaver produces 1200 yards at a cost of .02 per yard."

No labor leaders complained in 1904 of cheap foreign labor taking American jobs because, even then, productivity involved much more than workers' wages. London acknowledged this as well and actually criticized American workers' "superior energy, skill and willingness." He wrote, "It may be objected, a great part of this [superior productivity of American workers] is due to the more improved American machinery. Very true, but nonetheless a great part is still due to the superior energy, skill, and willingness of the American laborer. The English laborer is faithful to the policy of ['go easy']. He refuses point blank to get the work out of a machine that the New World scab gets out of a machine….Nor will the British workman run machines at as high speed as the American, nor will he run so many. An American workman will give equal attention simultaneously to three, four, or six machines or tools, while the British workman is compelled by his trade union to limit his attention to one, so that employment may be given to half a dozen men." Consider that in 1990 German manufacturing workers put in only 1,566 hours a year while Americans averaged 1,937, and you can see not much has changed in 90 years.

Secretary of Labor Robert Reich argued in his 1991 book The Work of Nations: Preparing Ourselves For 21st-Century Capitalism: "The economic well-being of Americans…no longer depends on the profitability of the corporations they own, or on the prowess of their industries, but on the value they add to the global economy through their skills and insights. Increasingly, it is the jobs that Americans do, rather than the success of abstract entities like corporations, industries, or national economies, that determine their standard of living." Reich may well be correct. If he is, it is difficult to see how denying employers the right to use—or more importantly, threaten to use—permanent replacements will improve the skill level of American workers. In the short term, banning strike replacements will help unions inhibit productivity increases in what Reich calls "routine production jobs."

And when this happens, the same unions inevitably will accelerate their push to, as Reich says, "impose tariffs, quotas, and other, less visible forces of trade protection upon the American market" in order to save these jobs. In the long run, Reich believes that protectionism for American industry "can be expected to disappear" because organized labor will be left on its own to argue for protection and that "Labor's voice, steadily quieting as the number of routine producers in America dwindled, [will] be no match for the voices on the other side, growing ever louder and more convincing."

But companies and their employees must survive and prosper in the short run as well, and if Reich's concern is for American workers—not their companies or unions—why support legislation whose primary purpose, as Jack London forcefully argues, is to allow union workers "to give less for more"—to become less productive? Compelling U.S. employers to set aside 1.5 percent of their payroll for worker training—another Clinton campaign pledge—sounds fine but is no substitute for employers encouraged or compelled by competition to increase their workers' skills.

One compromise, sure to be advanced in Congress by business interests, would be to prohibit the hiring of permanent strike replacements unless a company could prove that doing so was a matter of business necessity. Typically, this would mean a company would have to prove that it was unable to find a sufficient number of skilled employees willing to temporarily keep the jobs of strikers warm for them. Unions will oppose such compromise legislation. They smell victory, and they want employers defenseless. They have learned nothing from the last 40 years of union decline. They are caught in a 1930s time warp where the role of government is to help unions at the expense of worker and employer rights.

Reich says that the fundamental difficulty in improving "the plight of America's globally vulnerable citizens" is not in imagining or implementing solutions. "The greatest challenge," says Reich, "comes in summoning the political determination" to embark upon these solutions. Whenever a Democrat talks about "political determination," he usually means new spending programs or tax increases, or both.

Reich does want to spend money and raise taxes, but even he concedes that money is not the whole solution. Unfortunately, taking away the ability of unionized companies to hire workers who are willing to give "more value for the same price" in order to protect the jobs of union members who want to give "the least for the most" is no solution either. Rather, it is a blatant effort by a small minority to enlist the government's help in driving out of unionized companies what London called "the superior energy, skill and willingness of the American laborer." Jack London would be happy, and Bill Clinton would be keeping at least one political promise, but returning to the 1930s is no way to be "preparing ourselves for 21st-century capitalism."

Contributing Editor Michael McMenamin is a lawyer with the Cleveland-based firm of Walter, Haverfield, Buescher & Chockley.