Milton Friedman - Who Protects the Worker?

Milton Friedman explains who truly protects the workers in about 5 minutes. The right answer to the question "Who protects the worker?" is that the worker is protected by the existence of other employers who can and will compete for his or her services if a present employer fails to provide decent wages and working conditions. The only real way to protect the standard of living of workers is to preserve a freely competitive labor market. This video is an excerpt from the lecture 13. of the Milton Friedman Speaks series. Source: theginiapp YouTube channel. The whole lecture can be watched here.

(see video below transcript)

Transcript:

...who protects the worker? If you were to have a Gallup poll go around and ask people that question, or if someone were to go around and ask people in this audience the question of who protects the worker, I strongly suspect that you would get one out of three possible answers. Some people would say: of course it's the unions that protect the worker. Some other people would tend to say: oh no, it's more important that government protects the worker. And I suspect most people would say: it's nobody who protects the worker.

Now, all three answers are under some circumstances correct. But all three answers are misleading. Now, unions do protect some workers. Unions protect two classes of workers. Those of their members who are employed and the union officials who run the unions.

What about government? Here again, government protects some workers, and I’ve already mentioned some of the measures whereby they do. All of these measures which strengthen unions, such as the Walsh-Healey Davis-Bacon act, such as licensing, such as minimum wage laws, are all governmental measures which do protect some workers by strengthening the unions. Again, the high paid workers, not the low paid ones. In addition, the government also protects government workers.

Workers are protected by employers. Not by his own employer. Because the man who has one possible employer has no protection. The employers who protect the worker are the people who would like to hire him but for whom he doesn't work. The real protection that a worker gets is the existence of more than one possible employer. That's what gives them freedom. That's what enables them to get the full value of his services. It's competition. It's a free market, in which you have a diversity of sources of employment, which provides the effective protection to the worker. So in every area, what protects the worker, what protects the employer, what protects the consumer, is always the existence of a variety and alternatives.

And of course, every group in our society that wants to get a privileged position tries to protect itself from competition by others. The workers try to protect themselves from competition from other employees by forming unions, getting government licensure, having arrangements under which they can limit the number of people who can get certain kinds of jobs.

Producers try to get protection against competition by having employersć organizations, forming monopolies, cartels, or by getting the government to impose tariffs, or restrictions on imports, or to give them special advantages of other kinds.

So all of us, we are all of us the same way. We want to avoid competition. And yet it is the competition that effectively protects us in our various forms. It protects the worker by providing alternative opportunities for employment. It protects the employer by providing alternative employees. It protects the consumer by providing alternative products.

So the conclusion, which I would suggest to you, is that the real way to make sure that the worker continues to be protected, that the gains and our standards of life that we had had as workers over the past 150 – 200 years continue, the real way is to make sure that we preserve the existence of competition and a free markets. Unions can and do serve many useful purposes, but they also can do great harm, if they interfere with competition and freedom of markets. The same is true of organizations of employers. Employers' associations can and do serve many useful purposes, provided there is free entry. In all cases we must try to preserve freedom for alternatives.

Translated by Jadranko Brkic.