Free To Choose 1980 - Vol. 08 Who Protects the Worker? - Full Video

Summary

In this episode of 'Free To Choose,' Milton Friedman explores the labor market and the impact of labor unions on workers' welfare. He challenges the notion that unions are the key to workers' prosperity, citing historical and contemporary examples to argue that a free market system, not unions, has been the driving force behind improved living standards and job opportunities. The discussion also touches on minimum wage laws, immigration, and the role of government in the economy, highlighting the tension between the protection of workers and the promotion of economic freedom.

Takeaways

• 🎓 The discussion revolves around the question of who truly protects workers: labor unions or the free market system.
• 🏭 Milton Friedman argues that labor unions, while benefiting their members, can act as a throwback to pre-industrial times and may not be essential for societal progress.
• 🏛️ Historical references are made to the Hippocratic Oath, suggesting that early forms of guild-like restrictions on practice and knowledge sharing have parallels in modern labor unions.
• 🚑 The role of paramedics and private enterprise in emergency care is highlighted as an example where non-traditional medical practitioners can provide effective care outside of conventional, unionized settings.
• 🛠️ Disputes between union and non-union workers can lead to violence and destruction, as illustrated by the coal loading dock incident in Indiana.
• 🏢 The federal government's role in supporting labor unions is examined, with the proximity of union headquarters to Capitol Hill suggesting a strategic positioning for influence.
• 💼 The impact of minimum wage laws on employment opportunities, particularly for unskilled and minority workers, is debated as potentially discriminatory.
• 🏦 Examples of government job security and the challenges of firing civil servants are given to contrast with the flexibility of the private sector.
• 🌾 The agricultural industry's reliance on undocumented workers and the economic contributions of immigrants are discussed, emphasizing the complexity of immigration and labor policies.
• 🛑 The economic transformation of Spartanburg, South Carolina, through the adoption of Right to Work laws and tax cuts is presented as a successful model of free market policies fostering growth and opportunity.
• 🤝 The overall theme is the advocacy for a free market system, where competition and individual merit, rather than union membership or government intervention, drive economic prosperity and worker welfare.

Q & A

What is the main argument presented by Milton Friedman in the film series 'Free To Choose' regarding labor unions?

Milton Friedman argues that labor unions, while benefiting their members, are not the key to the development of modern society and can be seen as a throwback to pre-industrial era practices, such as the agreements among craftsmen in the Middle Ages or the Hippocratic Oath among medical practitioners in ancient Greece.

According to the transcript, what does Friedman suggest was the source of improvements in workers' conditions over the past two centuries?

Friedman suggests that the improvements in workers' conditions were not primarily due to labor unions, especially considering the 19th century when there were hardly any labor unions but workers still fared well. He implies that other factors, such as economic growth and technological advancements, played a more significant role.

What is the Hippocratic Oath, and how is it related to the discussion on labor unions in the transcript?

The Hippocratic Oath is a code of conduct established by physicians and medical practitioners on the Greek island of Cos, which includes ideals for protecting patients as well as restrictive practices similar to modern labor unions. Friedman uses it as an historical example to illustrate how such restrictive agreements can limit access to a profession and protect the interests of a select group.

What role does Friedman believe the American Medical Association (AMA) has played in the United States?

Friedman describes the AMA as one of the strongest labor unions in the country, which has kept down the number of physicians, increased the costs of medical care, and prevented competition, all in the name of helping the patient.

How do labor unions affect the labor market according to the viewpoints expressed in the discussion?

The discussion suggests that labor unions can restrict the labor market by favoring their members with higher wages and better working conditions, often at the expense of non-union workers who may face reduced opportunities. This can lead to a decrease in overall employment opportunities and potentially stifle economic growth.

What is the 'Right to Work' law mentioned in the transcript, and how did it impact Spartanburg, South Carolina?

The 'Right to Work' law is a law that prohibits agreements between labor unions and employers that make union membership a condition of employment. In Spartanburg, this law, along with tax cuts and pro-business policies, helped transform the economy by attracting new industries and creating a more competitive labor market, leading to increased job opportunities and economic growth.

What is the controversy surrounding the minimum wage as discussed in the transcript?

The controversy lies in the differing views on the impact of minimum wage laws. Some argue that minimum wages protect workers by ensuring they receive a fair wage for their labor, while others, like Friedman, argue that they can lead to unemployment, especially among the young and unskilled, by pricing their labor out of the market.

What is the role of government in labor market regulation according to the transcript?

The transcript suggests that the government plays a significant role in labor market regulation through laws such as minimum wage legislation and the right to form and join labor unions. However, there is debate over whether these regulations protect or harm workers and the economy as a whole.

How does Friedman view the relationship between immigration and the labor market?

Friedman believes that unrestricted immigration can be beneficial in a society without a welfare system, as it allows for the free movement of labor in response to job opportunities. However, he acknowledges that with a welfare system in place, unrestricted immigration can lead to issues, as people may immigrate to take advantage of welfare benefits rather than for employment.

What is the position of labor unions on minimum wage according to the transcript?

According to the transcript, labor unions are major supporters of minimum wage laws. They lobby for these laws, believing that they protect the interests of workers by ensuring a baseline level of income.

What are the key points of disagreement between Friedman and the labor representatives in the discussion?

The key points of disagreement include the overall impact of labor unions on worker prosperity, the necessity of minimum wage laws, the role of government in regulating the labor market, and the effects of economic freedom on the broader society.

Outlines

00:00

🎥 Introduction to Labor Market Discussion

Robert McKenzie introduces a discussion on labor markets and unions at the Harper Library, University of Chicago. The focus is on Milton Friedman's film 'Free To Choose,' which questions the role of labor unions in worker protection and progress. Friedman challenges the belief that unions are responsible for workers' progress, citing historical evidence and the modern situation in the U.S. where a significant portion of workers are non-union members. The script also delves into the historical roots of labor unions, drawing parallels to ancient Greek craftsmen's agreements and the Hippocratic Oath, suggesting that unions are more of a pre-industrial era practice.

05:02

🚑 Medical Profession and Labor Unions

The script explores the American Medical Association's role as a labor union, discussing its impact on physician numbers, medical care costs, and competition. It contrasts the traditional medical licensing process with the role of paramedics in emergency care, highlighting the effectiveness of the latter. Paramedics argue that their contribution to emergency medical care is significant and should not be restricted by medical licensing monopolies. The narrative also touches on the historical context of labor unions and their restrictive practices, which are likened to the Hippocratic Oath's limitations on medical knowledge dissemination.

10:04

🏭 Labor Unions and Market Restriction

The script presents a debate on the role of labor unions in protecting workers, using the backdrop of a coal loading dock strike and the ensuing conflict. It discusses the perspective of non-union workers and contractors who believe in the freedom of choice regarding union membership. The narrative then shifts to the federal government's role in supporting unions, illustrating the political influence of labor organizations in shaping labor legislation. The discussion also covers the impact of minimum wage laws on unskilled labor, suggesting that such policies often harm the very people they are intended to protect.

15:06

🍽️ Impact of Minimum Wage on Employment

The script examines the effects of minimum wage laws on the job market, particularly for unskilled workers, minorities, and young people. It uses the example of a staff restaurant in the Department of Housing and Urban Development to discuss the benefits and job security provided to federal workers. The narrative then shifts to the experiences of an electronics engineer in Silicon Valley, illustrating how a free labor market can benefit both employers and employees, in contrast to the restrictions imposed by labor unions and minimum wage laws.

20:09

🌾 Agricultural Labor and Immigration

The script addresses the issue of undocumented workers, particularly in the agricultural sector, where they are often needed during harvest seasons. It discusses the challenges faced by farmers who rely on this workforce and the potential consequences of legislation that would make hiring undocumented workers illegal. The narrative highlights the economic contributions of these workers and the potential backlash from the farming community if such laws were enforced.

25:11

🏭 Economic Revival Through Free Trade

The script tells the story of Spartanburg, South Carolina, which transformed its economy by adopting a free trade approach. By enacting a Right to Work law, cutting taxes, and attracting international investment, the city experienced an industrial revolution that benefited both workers and employers. The narrative showcases the positive outcomes of a free market system, where increased competition and opportunities lead to economic growth and improved living standards.

30:12

🤝 The Benefits of a Free Labor Market

The script concludes with a discussion on the merits of a free labor market, emphasizing how higher wages and better working conditions can be achieved without the need for labor unions or government intervention. It highlights the success of workers who have benefited from the competitive nature of the job market, as well as the broader economic benefits of increased productivity and capital investment. The narrative stresses that the prosperity of a nation is a result of a free enterprise system that allows for the fair distribution of economic gains.

35:12

🗳️ Labor Unions and Democratic Society

The script captures a debate on the necessity of labor unions in a democratic society. Participants discuss the role of unions in protecting workers' rights and the potential negative impacts of excluding non-union members from certain benefits. The discussion also touches on the historical context of labor movements and their importance in the evolution of workers' rights. There is a clear division in opinions, with some panelists advocating for the indispensability of unions in a democratic framework, while others question the current relevance and effectiveness of union practices.

40:13

🌐 International Labor Market Dynamics

The script delves into the complexities of opening the labor market internationally, with panelists discussing the feasibility and implications of such a move. The conversation centers on the interplay between labor market freedom, immigration policies, and the global economy. Participants express differing views on the potential benefits and challenges of unrestricted labor movement, highlighting the need for a balanced approach that considers both economic opportunities and societal impacts.

45:13

🏛️ The Role of Government in Labor Protection

The script presents a heated discussion on the role of the federal government in protecting workers, with a focus on the historical context of labor movements and the current state of workers' rights. Panelists debate the effectiveness of government interventions, such as minimum wage laws and occupational health codes, in safeguarding workers' interests. The conversation also touches on the issue of undocumented workers and the need for legal protections, reflecting the diverse perspectives on how best to support and empower the workforce.

50:14

🛑 Conclusion on Labor Market Freedoms

The script concludes with a recap of the key points made during the discussion, emphasizing the importance of economic freedom and the potential risks of abridging it. Panelists reflect on the balance between government intervention and market freedom, with a particular focus on the implications for workers' rights and societal prosperity. The closing remarks underscore the need for a nuanced approach to labor market policies that respects individual freedoms while also ensuring equitable opportunities for all.

Keywords

💡Labor Market

The labor market refers to the system where laborers and employers interact to exchange labor for wages. In the video, the labor market's functioning is a central theme, with discussions on how labor unions and minimum wage laws affect its efficiency and equity.

💡Labor Unions

Labor unions are organizations that represent the collective interests of workers and negotiate with employers for better working conditions and wages. The video explores the controversial role of unions in protecting workers' interests, with examples provided from historical and modern perspectives.

💡Hippocratic Oath

The Hippocratic Oath is a code of conduct historically taken by physicians, which includes an ethical guide to practice medicine. In the script, it is mentioned as an early form of a 'closed shop' where knowledge was restricted to certain individuals, drawing a parallel to modern labor unions' practices.

💡Free Market

A free market is an economic system where prices are determined by supply and demand with little to no government intervention. The video argues that a free market best serves the interests of workers by allowing for competition among employers and workers, as illustrated by the transformation of Spartanburg, South Carolina.

💡Minimum Wage

Minimum wage is the lowest wage permitted by law or by a special agreement. The script discusses the impact of minimum wage laws on employment, particularly for low-skilled workers and minorities, and how it can lead to a reduction in job opportunities.

💡Paramedic

A paramedic is a healthcare professional who provides emergency medical services outside of a hospital. In the video, paramedics are used as an example to question the monopoly of licensed physicians in providing emergency care, highlighting the debate over who can offer the best care.

💡Right to Work

Right to Work refers to laws that prevent unions from compelling workers to join a union as a condition of employment. The video discusses the positive economic changes in Spartanburg following the implementation of a Right to Work law, suggesting it led to increased job opportunities and business growth.

💡Immigration

Immigration is the process of moving to a new country with the intention of residing there. The script touches on the complexities of immigration in relation to labor markets, particularly the impact of undocumented workers on the economy and the debate over immigration restrictions.

💡Capital Investment

Capital investment refers to the purchase of goods or services intended to produce income in the future, such as machinery or real estate. The video suggests that increased capital investment is a result of a free market system, leading to higher productivity and better wages for workers.

💡Productivity

Productivity is a measure of the efficiency of production, typically expressed as the ratio of output to input. The script argues that the prosperity of a nation and the wages of its workers are primarily driven by productivity, which is enhanced by capital investment and a free market system.

💡Economic Freedom

Economic freedom is the ability of individuals and businesses to make their own economic decisions without undue government interference. The video emphasizes the importance of economic freedom for prosperity, suggesting that restrictions on it, such as minimum wage laws and union privileges, can be detrimental.

Highlights

Milton Friedman challenges the common belief that labor unions are primarily responsible for workers' progress, noting that significant advancements occurred in the 19th century with minimal union presence.

Friedman argues that labor unions may benefit their members but can be seen as a regression to pre-industrial times, drawing parallels to ancient Greek craftsmen's agreements.

The Hippocratic Oath is highlighted as an early example of a professional code with restrictive practices, which Friedman suggests is contrary to the open teaching philosophy of Hippocrates.

Friedman criticizes the American Medical Association for acting like a strong labor union, limiting physician numbers, and potentially driving up healthcare costs.

The discussion explores the role of paramedics as an example of non-traditional medical practitioners providing effective emergency care despite resistance from established medical professionals.

Paramedic Joe Dolphin presents statistics showing a significant increase in survival rates of cardiac arrest patients due to the introduction of paramedic services.

Friedman raises the question of whether medical care should be a monopoly of licensed physicians or if others capable of providing effective help should be allowed to do so.

The transcript describes a violent incident at a coal loading dock where union workers attacked non-union workers continuing to work during a strike.

Harry Leef discusses the negative aspects of closed shops and the importance of allowing individuals the freedom to choose whether to unionize or not.

Friedman examines the influence of labor unions on federal labor legislation and their efforts to secure government support to gain power without resorting to violence.

The debate over the minimum wage's effectiveness in helping the poor is presented, with arguments that it may actually harm low-skilled workers, including a disproportionate number of minorities.

Friedman points out the inefficiencies and protections afforded to federal workers, suggesting that they may be overprotected at the expense of taxpayers.

The story of Dick Pashley illustrates how a free labor market can benefit workers, showing rapid career advancement based on skills and desire to work, without union involvement.

Friedman contrasts the free market's benefits with the restrictions and potential violence that can arise when market forces are interfered with, as seen with immigration control.

The case of Spartanburg, South Carolina, is presented as an example of economic revitalization through free trade policies, leading to increased foreign investment and job opportunities.

The discussion concludes with a debate on the role of unions and the free market in protecting workers' interests, emphasizing the importance of economic freedom and its impact on prosperity.

Transcripts

Hello, I'm Robert McKenzie, and welcome

again to the fine old Harper Library

in the University of Chicago.

A group of guests have come together

to see and to discuss the latest film by

Milton Friedman in his series,

Free To Choose. In this, he examines

the working of the labor market, and

role of labor unions, and again comes up

with some controversial views in answer

to the question: Who protects the worker?

(Opening music)

MILTON FRIEDMAN: People who earn their

living in a modern heavy industry seldom

engage in the kind of backbreaking toil that

was the everyday lot of most

workers a century ago.

And yet they earn far more.

What has produced these improvements?

The offhand reaction of most people is likely

to be that labor unions are largely

responsible for the enormous progress

that workers have made

in the past two centuries.

But clearly, at least for the United States

that cannot be true.

After all, in the 19th century,

when workers did very well,

there were hardly any labor unions at all.

And even today, no more than one

out of four or five workers is a

member of a trade union.

And the remainder do very well indeed

in achieving the highest level of

living in the world.

Labor unions do, of course, benefit their

members but, far from being a key to the

development of the modern society, they are

a throwback to an earlier pre-industrial era,

to the agreements among craftsman in the

Middle Ages or, to go back even earlier,

more than 2,000 years ago,

to the agreement

among medical men in Greece.

From the tiny Greek island of Cos, the coast

of Asia Minor is four miles away in the mist.

Twenty-five-hundred years ago a hospital

and medical school flourished on Cos.

The great Hippocrates, the founder of

modern medicine, worked there.

Legend has it that Hippocrates taught his

students in the shade of this plain tree.

He welcomed anyone who wanted to learn,

so long as they paid his fee.

There is another legend that St. Paul stood

here and preached the gospel of Christianity.

What isn't legend is that Hippocrates and

his followers started medicine on the road

forward to becoming a science.

When Hippocrates died at the age of 104,

or so legend has it, this island was full of

medical people, his students and disciples.

Competition for custom was fierce.

Some 20 years after he died they got

together and constructed a code of conduct.

They named it the Hippocratic Oath,

after their old teacher and master.

Every new physician, before he could start

practice, came to this spot back here in

front of those columns and took the Oath.

The oath was full of fine ideals for

protecting the patient.

But it also had a couple of other things in it.

Listen to this one, "I will impart a knowledge

of the art to my own sons, and those of my

teachers and to disciples bound by a

stipulation and oath according to the law

of medicine, but to none others."

Today we'd call that a closed shop.

Or listen to this one referring to patients

suffering from the agonizing disease of

kidney or bladder stones:

"I will not cut persons laboring under the

stone but will leave this to be done by

men who are practitioners of this work."

A nice market-sharing agreement

between physicians and surgeons.

Hippocrates must turn in his grave when a

new class of medical men takes that oath.

After all, he taught anyone,

provided only they pay his tuition.

He would strongly have objected to the kind

of restrictive practices that physicians

all over the world have adopted

to protect their custom.

In the United States the American Medical

Association has for decades been one of the

strongest labor unions in the country,

keeping down the number of physicians,

keeping up the costs of medical care,

preventing competition by people from

outside the profession with those in it; all,

of course, in the name

of helping the patient.

(ambulance siren)

(woman sobbing)

Without warning, anyone of us

may suddenly need medical care.

If we do, we want the very best

care we can get.

But who can give us that care?

Is it always a graduate of an expensive

medical school who has a union card

called a medical license?

Or might it be someone like this, a trained

paramedic working for a private enterprise

organization rendering emergency care?

PARAMEDIC: And hopefully we'll get

a very good contract out of that.

FRIEDMAN: Many such businesses

provide primary care for emergency cases

in the United States.

This particular paramedic team is attached

to a fire department in southern California.

They're good at their job.

But it's not unusual to find

local physicians objecting.

JOE DOLPHIN: They take the Hippocratic

Oath here in the United States and they

believe that they should be the one that

is treating their patient; they should be

the one that saves that patient's life.

And if someone else does it, it just kind of

interferes with everything that they

have been taught.

FRIEDMAN: But why should medical care

be a monopoly of licensed physicians?

Shouldn't anyone who is capable of providing

effective help be free to do so? PARAMEDIC: I'm going to take your

blood pressure here.

Okay, any one see him go down?

FRIEDMAN: You can be sure that no one

would be able to stay in this business very

long unless he can demonstrate by

performance that he's doing a good job.

Joe Dolphin knows that very well.

DOLPHIN: We've taken some statistical

samples of the kind of effectiveness

paramedics have in California.

Giving an example of that, in one district of

California that we serve which is a county

which is populated to the extent of 580,000

people, before the introduction of

paramedics, less than 1% of the patients

that suffered a cardiac arrest or their heart

stopped, lived through their hospital stay

and were released from the hospital.

But with the introduction of paramedics,

just in the first six months of operation,

23% of the people whose heart stops,

are successfully resuscitated and are

released from the hospital and go back

to productive working society.

We think that's pretty amazing.

We think the facts speak for themselves.

However, relating that to the medical

community is sometimes very difficult.

They have ideas of their own.

Respiration's 12 and regular by...

Looks good to me Dave.

How are you reading this down there?

Are you guys ready to go?

Yeah. It says Code Two. Code Two?

FRIEDMAN: Disputes between union

and non-union workers are not

always as high-minded as between

organized medicine and Joe Dolphin.

One day in 1978, workers at a coal loading

dock on the Ohio River in southern Indiana

continued to work after the Mineworker's

Union had called a strike.

That night, a crowd of armed

union men invaded the site.

JOHN PERSINGER: And then they fired on a

little building sitting here after they fired on

Mr. Teegarden's car here, and threw another

fire bomb into the trailer.

Others had run on back and were firing

trucks and shooting holes through

tires with handguns.

I'd gone back beyond the loading dock here.

Standing back in there, I could hear them

shooting and the air escaping

from truck tires.

Course there's so many people moving

around and doing so much damage and

setting so many things on fire...a whole

lot of things going on at one time.

We should have been heavily armed

and shot these people, did something

to stop such destruction.

I wouldn't have believed that a rabble rouser

could have gathered together that many

irresponsible people to come on to a

person's property and do this kind of

destruction until I'd finally seen it done.

FRIEDMAN: These workers are on

the other side of the union fence.

They're building two Social Security

offices in Baltimore.

On this government project

everyone's a union worker.

They rely on their union to protect them

against competition from non-union labor.

But some local contractors see a very

different side to a closed shop.

HARRY LEEF: We don't feel that anybody

should be denied a choice and we feel every

man should have a choice if he wants to be

unionized or not; not legislated,

not saying he must belong to a union.

We feel when you tell a man he must belong

to a union or he must do this or that,

you are taking freedoms away from this

man, the freedom of choice of this

businessman here to choose me,

to do business with me.

All business needs its right to choose

to do business with each other.

By the same token, our employees have

the right to choose whether they

want unionization or not.

FRIEDMAN: On this government site,

“Authorized Personnel Only” really means

“Unionized Personnel Only.”

Unions have long recognized that

the surest and most effective way

for them to get power without

violence is to have the federal

government on their side.

That's why so many strong unions have

made it a point to locate their headquarters

close to the source of power.

The heads of the trade unions that cluster

near Capitol Hill know this place very well.

It is the room assigned to the Committee on

Education and Labor of the House of

Representatives, and it is where much of our

labor legislation is discussed and shaped

before presentation to Congress.

I know rooms like this myself very well,

because I've often testified before

congressional committees and they all meet

in rooms like this.

Up there on the podium is where the

members of the House or of the Senate sit.

Of course, behind them there will be

clustered a bunch of aides.

As you know, there are something like

30 to 40 aides for every single member of

the House and the Senate.

And very often in one of

these committee rooms there will be

almost nothing but aides around.

When I've sat in the bear pit over here,

where the witnesses sit to testify,

I've sometimes thought that maybe the

whole thing was a show being conducted by

and for the aides with an occasional

member of the House or senator dropping by

to see what the show is all about.

This is a room in which hearings were held

on the most recent increase in the

minimum wage, for example.

Who do you suppose testified here in

favor of a higher minimum wage rate?

Do you suppose it was representatives of

the poor people who are supposedly

being helped by the bill?

Not a bit of it.

The major people testifying for it were

representatives of the American Federation

of Labor, the AFL-CIO,

the major organization

of trade unions in this country.

There's hardly a member of one of their

trade unions who works for a wage

anywhere close to the minimum wage.

Despite all the rhetoric about helping the

poor, they were in favor of a higher

minimum wage for a very different reason:

because it would protect the members of

their unions from competition from

the lower and lesser-skilled people.

To see the effects of minimum wage laws in

action, go to a place like this where they

sell quick and inexpensive food.

You don't need much training to

start work on this job.

It used to be a traditional training

ground for the unskilled.

Not any longer, thanks to the

minimum wage laws.

LEE ROBERTS: From the worker’s point of

view, the people that it was supposed to

help are the people in some cases it's

hurting the most, such as minorities,

unskilled labor and young people.

A businessman, especially a small

businessman, cannot afford to bring in

these people at the higher wage.

They are willing, however, to take

apprentices and to train them.

It's very difficult to do now

under the minimum wage laws.

FRIEDMAN: The people who are

discriminated against most by high

minimum wage rate are the people with

low skills, which includes a disproportionate

number of Negroes.

Indeed, I have long believed that the

minimum wage rate was the most anti-Negro

piece of legislation on our statute books,

not by intention, but through its results.

The more they get paid, the better people

can live, whether they are paid

in cash or in kind.

The staff restaurant in the Department

of Housing and Urban Development

in Washington, D.C.

These people are eating subsidized food.

Like all civil servants federal workers get

extremely generous fringe benefits.

They have also had an incredible

degree of security.

It has been almost impossible

to fire a civil servant.

In January, 1975, a typist in the

Environmental Protection Agency was so

consistently late for work, that her

supervisors demanded she be fired.

It took 19 months to do it and this incredible

21-foot-long chart lists the steps that had to

be gone through to satisfy all the rules and

all the management and union agreements.

UNNAMED INDIVIDUAL: This is really a

typical horror story is what it amounts to.

It shows the number of steps

you’ve got to go through.

FRIEDMAN: The process involved the girl's

supervisor, his deputy director, his director,

his director of personnel operations, the

agency's branch chief, an employee relations

specialist, a second employee relations

specialist, a special office of investigations,

and the director of the

office of investigations.

This veritable telephone directory, need I

add, was paid with taxpayers’ money.

Who could invent a better-protected job than

this one before it came to its end?

WORKER: We now have a time certain

at which the decision has to be

made within the agency.

FRIEDMAN: Half an hour's drive out of

Washington you come to Montgomery

County, where many very senior

civil servants live.

It has the highest average family income

of any county in the United States.

Of the people who live here who are

employed, one out of every four works

for the federal government.

Like all civil servants, they have job security,

salaries linked to the cost of living, a fine

retirement plan also linked to the cost of

living, and many manage to qualify for Social

Security as well, becoming double-dippers.

Many of their neighbors are also here

because of the federal government:

congressmen, lobbyists, top executives of

corporations with government contracts.

As government expands,

so does this neighborhood.

Government protects its workers just as

trade unions protect their members.

But both do it at someone else's expense.

It doesn't have to be that way.

Dick Pashley is an electronics engineer.

He designs memory systems for computers.

He works for Intel Corporation, one of many

companies which have sprung up

south of San Francisco at a place

that they call Silicon Valley.

DICK PASHLEY: All these companies

have one thing in common.

They are trying to get engineers to

work on their projects.

Now, myself, I'm one of these engineers and

so obviously I get letters in the mail,

phone calls, the like, where people are

trying to get me to leave Intel and go

to this particular company.

One of the companies right across the street

here, Intercel, is one of the new

companies that's forming in this area,

and they are hunting for people

just like myself to come in.

And what they do is they'll offer you like

typically a like a 30% higher salary, stock

options, a bonus and several other things

to get you to move to their company.

Since it's not really a move,

it's very easy to do because you're

only going across the street.

It's not a big traumatic thing where you are

leaving, let's say, one city and

moving to another city.

It's very straightforward.

FRIEDMAN: In the free labor market

everybody benefits.

When the market is restricted,

things are very different.

Those Mexicans are heading for the

United States side of the border.

There are real problems about permitting

unrestricted immigration into a welfare state.

It's one thing when people come for jobs

and are on their own as was the case

for most of American history.

It's another thing when a welfare system will

support them come what may at the

expense of other people.

Yet look what happens when you try

to interfere with market forces.

WORKER: Well there's several fairly large

groups of aliens on the hillsides waiting for

dark to set in, other groups that are still

on the Mexican side of their border.

They'll be coming in shortly I imagine.

We have electronic sensors buried in along

the hillsides along the most traveled trails to

alert us when there's alien crossings.

And from the sensor we work ahead of them,

try to head them off.

(helicopter engine and radio transmittion)

(police siren)

(engines and sirens)

FRIEDMAN: This is not a case of good

guys against bad guys.

The officers are simply trying to

do their duty.

The poor Mexicans are driven by hunger

and attracted by the prospect of jobs.

WORKER: You do good work.

The law enforcing people

have an impossible job.

(helicopter engine and radio)

OFFICER: They're gonna run,

they're gonna get picked up- sent back,

but sooner or later they’re going to make it,

one minute after the next, you know?

FRIEDMAN: In one month,

in 1978- 60,000 illegal immigrants

were arrested on this stretch

of the border.

But believe it or not,

the Border Patrol estimated that

nearly 200,000 found their way

through to places like this in

Northern California, where there

was work waiting for them.

Illegal Mexican immigrants are

not cheap labor around here.

Many earn more than the

minimum wage law demands.

They can do so because farmers

need many extra hands during

the harvest season, and there is

a shortage of domestic labor

available. Jill Hammond and her

partner run a farm

that produces plump

California raisins.

JILL HAMMOND: There's pending

legislation which would make it

illegal for farmers to hire

undocumented workers. And

supposedly- it would impose a

$1,000 fine per worker

on the farm. I can't imagine that

it would actually go through.

If it did, there'd be a full-scale

farmers' revolt around here.

Matter of fact, last year

there was quite a bit of activity

in the Kerman area, which is

about 15 miles west of Fresno.

Many of the farmers banded together,

and as much as warned the

Border Patrol to stay off their property.

And they were willing to back that up

with guns, I'm afraid. They were

very upset about it, and...

because their situation was desperate.

They needed the workers,

and they needed the work

to be done now. And the

Border Patrol was interfering with

that, as they saw it.

FRIEDMAN: Violence by employers

to assure the availability of workers

is no more justifiable than violence by

trade unions, to assure their members jobs.

But violence is one of the things

you are very likely to get

when you try to prevent a deal between

people who have jobs to offer, and

people who are looking for jobs.

Fifteen years ago, the economy of

Spartanburg, S.C. was stagnant.

It depended on peaches and cotton.

Wages were lower than the national

average, and unemployment was

higher than the average.

(factory noises)

Then, dramatically, the picture changed.

The people in Spartanburg decided

to make their town a center

of free trade. They did this by using

a new Right to Work law,

eliminating many restrictions on labor.

The City Council cut taxes to the bone.

They advertised the fact- that Spartanburg

was a place worth investing in.

By any standards, let alone Spartanburg's,

the result was revolutionary.

Industrialists came from Germany,

Switzerland, and all over the world

to build factories, to set up plants.

The workers of Spartanburg clearly

benefited from the new industries.

The first to notice were the

people who owned and ran

the traditional industries.

M. L. CATES: In terms of the business,

it has been a problem for us.

It means that we've got to be

on our toes, we've got to be

sure we're providing a good

work place, that we are providing

good jobs and what have you,

and that we are running

as competitively as possible.

I think that from the workers'

point of view, this has certainly

provided them with more

opportunities to, for a market

for their product, their labor,

their expertise.

FRIEDMAN: Suddenly, in a free market,

workers who once could not

find jobs- were now at a premium.

Everyone benefited, workers and employers

alike, and the town thrived.

(car engine)

One of the workers who arrived

in Spartanburg was Mr. Juma.

He came as a refugee

from Idi Amin’s Uganda.

MR. JUMA: We came in

this country just with $139.

I had a family, my wife

and two kids. And, we came

with only four bags of clothing,

which weighs about 40 pounds

each bag. We were not allowed

to take more than that.

We had to leave all our possessions,

all our property in Uganda.

And myself, I just came down

to Flowers Baking Company, and

I was hired as a laborer to work

in the plant at $2.49 per hour.

FRIEDMAN: Five years later, he was

chief accountant of the company.

In a free market his best protection,

his real wealth, turned out to be

his skills, and his desire to use them.

America has to offer me a lot of things.

And this is a great country.

I came in this country penniless,

today I own a house,

I own three cars, my wife has

got a good job, I myself have

got a good job, and the children

are schooling, and everything

has been working so fine.

I believe this because of the opportunity.

This is where everyone wants to work

in this country. There is lot of opportunity.

(factory sounds)

FRIEDMAN: When unions get

higher wages for their members by

restricting entry into an occupation,

those higher wages are at the expense

of other workers who find their

opportunities reduced. When government

pays its employees higher wages,

those higher wages are at

the expense of the taxpayer.

But when workers get higher wages

and more civilized working conditions

through the free market, when they

get them by firms competing with

one another for the best workers,

by workers competing with one another

for the best jobs- those higher wages

are at nobody's expense.

They can only come from

higher productivity, greater capital

investment, more widely-diffused skills.

The whole pie is bigger.

There is more for the worker,

but there's also more for the employer,

the investor, the consumer and

even the taxpayer.

That's the way a free market system

distributes the fruits of economic progress

among all the people. That's the essence

of the age of the worker.

(closing music)

ROBERT McKENZIE: The discussion is

already underway, here at the

University of Chicago, so let's join it.

Well, we tried a free market

system without labor unions.

We tried it back in the 1920s,

and into the '30s, and it led the world

into the biggest economic disaster

it's ever seen in modern times.

Now, I don't think that we're talking

talking free market or labor unions.

We're talking free market- with

or without labor unions.

And a free market system

without labor unions

is a total disaster.

McKENZIE: Let's get other reactions

to this, now, around the group.

It’s the free market system,

Milton's Friedman's been arguing,

I think, not labor unions,

which best protect the interests or

serve the interests of the worker?

Walter Williams, your reaction.

WALTER WILLIAMS: Well, I think clearly

labor unions serve the best interests of

workers- who happen to be members of

labor unions- at the expense of workers

who are excluded from being

members of labor unions.

McKENZIE: Ernest Green?

ERNEST GREEN: I don't think you can have

a democratic society without having

trade unions. I think if you look

at any democratic country,

it's essential to it, right of workers

to organize, and I think it's consistent.

If we are to maintain a democratic

country, those freedoms that-

the right of workers to organize

is a primary objective that

we have to maintain.

McKENZIE: Bill Brady?

WILLIAM (BILL) BRADY: Well, if they are

so vital, why are so many union

members leaving the union?

Why are they, why are they

losing so many -- why are the unions losing

so many decertification elections?

Why has the number of union members

declined so precipitously- from 23 percent

of the general labor force to...what is it

now...less than 19, 18 percent?

LYNN WILLIAMS: All depends

whose figures you're reading.

But workers aren't leaving the

labor movement in droves.

The union is not declining precipitously.

My union, the

United Steel Workers of America,

the major unions in the country,

many small ones are out organizing

and growing. The mix of work --

the mix of work in the society

is changing. We have some employers,

as we saw in the film...

who can't wait to rush off to the south

and try to get in an antiunion

environment, and invest their money

in prosperity in the south- instead of

in the north, and surely if you

invest money anywhere...you're

going to have prosperity.

McKENZIE: Let me just -

So, we also have a mix in terms

of civil service and service workers,

where we have employers who

have grumbled on that film

LYNN W: about $2.90 minimum wage. BRADY: I don't know that if you

BRADY: I don't know that if you

invest money anywhere that

you're going to have prosperity.

I don't think that that's a given.

That is, you seem to me to be

dealing in a premise there

that is incorrect.

(Several people talking at once.)

McKENZIE: Wait a minute now...

wait a minute.

The key question we're discussing is:

Who protects the worker?

Is it the labor union or

the free market that

best serves his interest?

W. WILLIAMS: Well, it seems

like from the evidence that I have...

from a number of research projects

that I've engaged in, I’ve found

that labor unions protect their members,

often at the expense of

disadvantaged people.

And it's a very, very interesting

question that the labor unions,

down through the ages, have

discriminated against all kinds of

W. WILLIAMS: people- in favor of a L. WILLIAMS: We haven't, Walter...

W. WILLIAMS: particular class of workers. L. WILLIAMS: ...we haven't.

W. WILLIAMS: We find that labor unions

have gone out on strikes, and

have murdered and maimed people

because other people sought entry,

and in terms of Mr. Green's remark,

he says that in the free democratic

society, we need labor unions.

Yes, that is true, we need

the right for voluntary association,

that is, free people have the right

to form associations, but it should not

be a requirement that you be a

member of a labor union

in order to establish a

contract for employment.

L. WILLIAMS: Can't we get some --

can't we get some perspective

in this, Walter? Talking about unions

down through the ages makes no

sense at all in terms of where

we're at now in this century

at this time. This business of

trying to relate where unions

come from to the, to the medical

profession and Hippocratic oaths,

Hippocratic Oaths or hypocritical oaths,

however one looks at that,

back in the Greek islands

really have very little relevancy.

W. WILLIAMS: Yes it does.

L. WILLIAMS: The violence,

see hear me out a minute,

I waited patiently.

W. WILLIAMS: Okay, okay.

L. WILLIAMS: The violence it's associated

with -- well, not so patiently,

but I waited. The violence

associated with the labor movement

and so on have been minimal

and was a reaction,

in this century,

not over the ages,

a reaction in this century to

the violence done workers

by corporations and powerful

economic groups when there

was no workers' organization

to protect them and no way

to deal with their greed

and with their power –

McKENZIE: Okay. Now,

now I'm turning to Milton

because he's heard the flavor

of the discussion.

FRIEDMAN: Sure.

What Lynn Williams is now

saying is utter nonsense.

There's no other --

no two ways about it.

The conditions of the worker

in this country before there was

labor unions were very important --

improved very greatly.

You cannot tell me

the millions of people,

my parents, your parents,

for all I know,

parents of many people around,

came to this country

from Europe in order to be

exploited and in order

to be subjected to violence.

Of course, there were

incidents of violence.

GREEN: I disagree with that vehemently.

I mean most of the blacks

came to this country not voluntarily,

but they were shipped here.

FRIEDMAN: The blacks -

GREEN: And the interesting

thing about the issue on --

on Spartanburg though -

FRIEDMAN: The blacks did not

-- excuse me, hold on for a second.

GREEN: Is that you left out -

FRIEDMAN: Hold on.

MCKENZIE: Let him finish

and then back to you.

GREEN: All right.

FRIEDMAN: The blacks are

an exception and I agree

with you completely.

GREEN: Twenty-two million

exceptions, though.

FRIEDMAN: But they are a

very important exceptions.

But there are also millions

and millions - the people that

Mr. Williams represents are

not mostly black. They are

mostly from the Slavic countries,

came from Eastern Europe.

L. WILLIAMS: If you look at the

membership of the Steel Workers –

FRIEDMAN: If we -- if we go back,

of course, there always has been violence.

It's not excusable,

I'm not excusing violence

on the part of anybody,

but I agree with Mr. Green

and with Walter Williams

that people should be free to organize.

of course they should be free to organize.

What I object to is the special privileges

that have been given by government to

labor unions which are not available

to other groups at all.

When labor unions have used violence

in industrial disputes they are not

subjected to the same sanctions

as people ordinarily are.

When cars are turned over in the course

of a labor dispute, how often do

people go to jail as a result of it?

L. WILLIAMS: Dr. Friedman and Walter

Williams go back in history

and they take a look at a situation where

America was empty, where we didn't have

anything like the sophisticated industrial

economy we have today,

but had a much more agricultural

and rural kind of economy and of course

when the -- when the impoverished

peasants of Europe, my ancestors

and most of our ancestors,

except for the slaves, which is

another situation, but when these

people came from Europe and came to

a wide open continent with the most

fertile soil then available to

anyone in the world,

naturally there was progress

and I or any of us would be

mad to deny progress.

But as that developed and as population

increased and as we moved into a

much more sophisticated industrial economy,

we moved then into the situation

in the 1930s, or earlier than that,

at the end of the century, as some

of the more skilled jobs came along.

The labor movement didn't happen

by accident, didn't happen because

there wasn't a need there.

The results of this development, even

with all the wealth available in America,

the results of this development was that

many working people were not having

anything like, by standards of civilization

or whatever, anything like

their fair share in this progress.

McKENZIE: Now you're arguing

that in a free market,

for labor, everyone benefits.

Does that mean that you would favor

abolition of all immigration restrictions?

FRIEDMAN: The situation of immigration

restrictions really has to do with

the question of a welfare state.

As I say in the film,

I would favor completely free immigration

in a society

which does not have a welfare system.

With a welfare system of

the kind we have,

you have the problem that people

immigrate in order to get welfare,

not in order to get employment.

You know it's a very interesting thing,

if you had asked anybody --before 1914

the U.S. had no immigration

restrictions whatsoever,

I'm exaggerating a little bit,

there were some immigration restrictions on

Orientals, but it was essentially, mainly free.

If you ask anybody,

any American economic historian,

was that a good thing for America?

Everybody will say yes

it was a wonderful thing for America

that we had free immigration.

If you ask anybody today,

should we have free immigration today?

Everybody will...

almost everybody will say no.

What's the difference?

I think there's only one difference,

and that is that

when we had free immigration

it was immigration of jobs

in which everybody benefited.

The people who were already here

benefited because they got

complementary workers,

workers who could work with them,

make their productivity better,

enable them to develop

and use the resources of the country better.

But today, if you have a system

under which you have essentially a

governmental guarantee

of relief in case of distress,

you have a very, very real problem.

McKENZIE: But this is true of

every western industrialized country.

and that's why today -

you cannot, unfortunately,

have free immigration.

Not because there's anything wrong

with free immigration,

but because we have other policies

which make it impossible

to adopt free immigration.

McKENZIE: Well I'd like

other reactions.

Is it at all feasible to open

the door of the labor market

internationally now? Bill Brady?

BRADY: I would --

I would say yes,

providing they open the door to us.

I think that the door to

not only the labor market,

the door to all markets should be

-- should be open.

That is the product markets.

W. WILLIAMS: My feelings

about the undocumented workers

of Mexican-Americans are inscribed

at the foot of the Statue of Liberty.

I think that the people should have the right

to come to this country.

Now, those who would say, you know,

I hear a number of people saying that,

well the immigrants

are contributing to our

unemployment problem.

And I pointed this out to some people,

I said, "Look, you know,

this is the same rhetoric that the Irish used

when the blacks

were coming up from the north,"

you know,

they're using blacks as scapegoats.

They're saying, "Get those people back

where they came from so that our

members can get jobs," you know.

Unions were as well doing this, you know,

they called them scabs,

strikebreakers, etcetera, etcetera.

So I do not wish for Mexican-Americans

to become the new scapegoats of our

particular national problems.

They are not the problem, and our nation

benefits to the extent

that these people come here and work.

And to that extent -- to that extent

so it's kind of good for them to remain illegal

aliens as opposed to being legal aliens

where they're subject

our welfare programs,

so that we don't want them to come here to -

(Several people talking at once.)

GREEN: I think that this country cannot

have a group of workers to remain outside

the framework of our laws

and our protections.

And as long as we have workers who are

attracted to the United States

because of the standards of living;

and I think minimum wages play

a part in that as part of that attraction.

But it seems to me

to have undocumented workers

without providing

either a means of protection for them,

and it seems to me that we've got to go

to the question of providing

the amnesty for those generations

of workers who have come here

over a period of time,

now two, three, maybe four generations.

We have to see that they have the same

rights and protection of all other workers.

And as it stands now, large numbers

of them live outside the framework

of the laws and statutes

that we have on the -- on our books.

McKENZIE: Comment Milton.

FRIEDMAN: They do and

the tragedy of the situation,

as Walter Williams points out,

that as long as they are undocumented

and illegal they are a clear net gain,

the nation benefits and they benefit.

They wouldn't be here if they didn't.

The tragedy is that we've adopted

all these other policies so that if we

convert them into legal residents

it's no longer clear that we benefit.

They may benefit,

but it's no longer clear that we do.

What Lynn Williams said before is again

a travesty on what was actually going on.

The real boost to the trade union movement

came after the Great Depression

of the 1930s.

That Great Depression was not a failure of

capitalism, it was not a failure of the private

market system as we pointed out in another

one of the programs in this series;

it was a failure of government.

It was not the case that somehow or other

there was a decline in the conditions

of the working class that produced

a great surge of unionism.

On the contrary -- unions have never

accounted for more than one out of four

or one out of five of American workers.

The American worker benefited

not out of unions,

he benefited in spite of unions.

He benefited because there was greater

opportunity because there were people

who were willing to invest their money

because there was an opportunity

for people to work, to save, to invest.

That's still the case today.

You say, we have to provide them with

something or other Ernest.

Who are the “we?”

GREEN: We the people.

(Laughter)

FRIEDMAN: How do, “we the people”

-- but how do “we the people” do it?

GREEN: And it seems -- we the people

provide them the protection by

seeing that their safety -

McKENZIE: You're talking

about the immigration population now.

GREEN: -- and occupational

health codes that protects the environment

that they work in, see that

they have civil rights laws that protect

their own person, see that they have

civil liberties laws that protect them further.

We the people of this

country provide that protection.

W. WILLIAMS: Why are they

coming here it's so bad?

If they don't have, you know,

you're kind of painting an image, you know.

Why are these people coming?

We're not pulling them here by chains.

(Several talking at once.)

McKENZIE: Gentlemen, don't all talk at once.

Lynn, and then -

W. WILLIAMS: So what are

you talking about protecting them?

GREEN: Why did you leave Little Rock,

Arkansas to go to Philadelphia?

It seems to point-

L. WILLIAMS: It seems to me that it's obvious –

W. WILLIAMS: Would you

extend the courtesy to finish.

Look, look, first thing, look,

let me say the following thing:

There's some basic things

that we need to know.

L. WILLIAMS: Well now, are you going to say

the thing I was interrupting or are you

gonna say five more things?

I mean there isn't all afternoon.

W. WILLIAMS: You know, labor unions,

and minimum wages for that case,

cannot improve the condition of

the working people of the country.

L. WILLIAMS: We do it everyday.

W. WILLIAMS: Because if

-- are you suggesting –

L. WILLIAMS: We improve the working

conditions of working people in countries

all around the world, everyday.

W. WILLIAMS: Well you know this --

you know what you're telling the audience,

you're saying that you can solve

the problems in Bangladesh.

You can make them a rich

country if you tell them to

unionize like we are –

L. WILLIAMS: I didn't say that.

W. WILLIAMS: --and demand high wages.

L. WILLIAMS: No, I didn't say

anything remotely like that.

W. WILLIAMS: It's productivity

that keeps income low.

McKENZIE: Lynn, let him finish.

BRADY: I come back to my initial question:

why are so many leaving the union?

L. WILLIAMS: There aren't

very many leaving the union.

BRADY: Oh, there are too.

I've given you the statistics.

L. WILLIAMS: Ah, now, do you think

I'm -- you grind off some percentages.

I live in the labor movement.

BRADY: You -- do you have other

percentages?

FRIEDMAN: In or on?

L. WILLIAMS: In, with and on.

And of course they pay me, of course, and

I don't have any objection to that at all.

FRIEDMAN: Neither do I.

L. WILLIAMS: At least we got

you a few minutes ago --

we got you to get the labor

movement up into this century.

And I agree with the observation you made -

(Laughter)

L. WILLIAMS: I agree with the observation

you made, that the industrial

union movement...

that there was a union movement

came out of the dirty '30s

and out of the depression and grew,

and that that was essentially

an industrial union movement.

But I wonder if --

I wonder when I hear your commentary

on the film and so on about unions

and restricting practices and restricting

access to industry and all of this,

I really -- I don't mean it disrespectfully,

but I really wonder –

FRIEDMAN: Don't mind being disrespectful,

it's all right. I'm used to it.

L. WILLIAMS: I really wonder if you,

if you do understand how the industrial

union movement, which is --

the more recent part of the movement,

how it really operates.

We're not telling anybody

who they have to hire.

FRIEDMAN: (Laughing)

McKENZIE: Let's raise the question,

which certainly is dealt with in the film:

Have minimum wages --

which is a form of government

intervention -- served the interests

of the poor and indeed of

the working class generally?

Now, I know you've spent

a good deal of time looking at this -

W. WILLIAMS: Yes. Okay, well,

at least form the standpoint of teenagers,

particularly minority teenagers,

the minimum wage law has acted to

destroy a number

of employment opportunities.

For example, back in 1948,

the black youth between 16

and 18 had an unemployment

rate of 9.4 percent and white youth was

10.4 percent, or 10.2 percent.

The labor force participation rates of

blacks was considerably

higher than that of whites.

And with each increase in the minimum

wage law, we had the dramatic

reversal that we have now.

And so the minimum wage law

has the effects of saying that

if you cannot produce $2.90

worth of goods an hour,

you don't deserve a job.

GREEN: I don't think -- you

can't look just at the minimum wages -

W. WILLIAMS: But –

GREEN: -- you've got to look

at the relocation of firms.

You've got to -- you've got to

look at the movement of people.

You've -- I mean you can't --

you can't do that.

W. WILLIAMS: Well, can't we just

-- well you look at the relocation of firms.

A lot of people try to say a lot of jobs

move out to the suburbs.

Well, you find black-white

unemployment ratios the

same in the suburbs as you

find in the cities. So it's --

mean, it's the minimum wages.

L. WILLIAMS: Yes, but taking one element

-- you're taking one element

out of a long historic development

and you start comparing 1920 –

GREEN: Even if you hold constant

-- if you hold constant -

(Several people talking at once.)

McKENZIE: Lynn is next,

Lynn and then Ernest Green.

Come on now.

GREEN: I understand the law

of educational achievement.

McKENZIE: Lynn and then Ernest Green.

GREEN: You get a differential

between black and white

unemployment rates -

McKENZIE: I'll bang the gavel...

...Come on. Lynn.

L. WILLIAMS: Well you're

taking -- you're taking one element,

years ago in a situation that's entirely

different that we're in today

and drawing some conclusions-

W. WILLIAMS: Minimum wage.

That's what's different.

L. WILLIAMS: No, no. There are many

other things that are different.

The enormous movement of black

people in this country between 1948

and now. You can't just wipe that out.

And you can't say that's –

W. WILLIAMS: White people move, too.

L. WILLIAMS: -- you certainly can't say

that's the minimum wage. But you know –

McKENZIE: Wait now. I want this case made.

Has the minimum wage served the interests

of the working people in this country?

L. WILLIAMS: I don't think there's

any question -- I don't think there's any

question that the working people

of this country would be much worse

off than they are today,

the youth of this country would be much

worse off than they are today

if we didn't have minimum wage.

McKENZIE: All right, now,

Brady. You -- come on.

BRADY: No, it's I –

McKENZIE: On minimum wages --

good idea or not? You're an industrialist.

BRADY: No. It's a bad idea.

It is patently one of the,

one of the worst things that can --

that we can do to our youth.

We prevent them from –

GREEN: Bill, how many kids

do you have?

BRADY: -- we prevent --what's that?

GREEN: How many kids do you have?

BRADY: I have two.

W. WILLIAMS: It's not

important how many kids you have.

GREEN: But it is. Minimum wage

doesn't affect his industry.

His wages are far above the minimum wage.

FRIEDMAN: Minimum wage doesn't

affect a single one of his members.

(Several people talking at once.)

McKENZIE: Hold it. Hold it. Hold it.

Milton has the floor.

L. WILLIAMS: We have not gone to support

minimum wage legislation in this country-

McKENZIE: Gentlemen, hold it a moment.

McKENZIE: Hold it a moment.

(Several people talking at once.)

McKENZIE: Hold it a moment now. Milton -.

L.WILLIAMS: Of course we have not.

We are a people's organization –

McKENZIE: Lynn -- the Chairman

has said the floor is Milton's.

FRIEDMAN: I was saying that there

is not a single one, I suspect,

of the members of your union

who is affected by the minimum wage.

They are much higher.

FRIEDMAN: You say that you

are a public service organization.

L. WILLIAMS: I say we're a

people's organization.

FRIEDMAN: You're an organization

of your workers.

And if you aren't representing

the interests of your workers

they ought to fire you.

L. WILLIAMS: And we're out –

FRIEDMAN: If you tell us that

you are going against the interests

of your workers you are simultaneously

saying to your workers --

I'm not doing what you hired me for.

L. WILLIAMS: Oh, come on.

This is, this is pure sophistry. I'm not –

FRIEDMAN: It's not sophistry in the slightest.

L. WILLIAMS: -- I am not talking –

FRIEDMAN: I'm just trying to -

L. WILLIAMS: I am not talking about

representing the interests of our workers.

Our union represents a lot of people.

FRIEDMAN: Right. Right. It does.

L. WILLIAMS: And some of the people

are the ones that you're probably aware of,

people who work in big steel mills –

FRIEDMAN: That's right.

L. WILLIAMS: -- and all the rest of that.

FRIEDMAN: Absolutely.

L. WILLIAMS: But we also go

out and organize workers all

the time and win certification

votes despite Bill Brady's comment

about that.

And many of the workers

we organize are workers who are

affected by minimum wage. And the result

of our organizing them is that we're able

to bring them above the minimum wage.

McKENZIE: Yes.

W. WILLIAMS: The point is, is that,

I think that both these gentlemen,

we all should recognize,

is that unions in the United States

support the minimum wage.

They are the major supporters.

They spend millions and millions

of dollars in lobbying for the

minimum wage law.

They do it out of the name of concern

and being in the interest of people.

Now, in South Africa the unions

are far more honest.

That is those white racist unions over there;

they say we support minimum wages

and equal pay for equal work

so as to protect white jobs.

That is to protect white jobs-

L. WILLIAMS: Are you implying –

W. WILLIAMS: -- from low-price competition.

L. WILLIAMS: Are you now implying,

wait, that we're white racists?

W. WILLIAMS: No, I'm not saying that.

I'm saying that it doesn't make

any difference about the intent.

GREEN: Walter, the Urban League supports

minimum wage the -- Ben Hooks

at NAACP supports minimum wage.

McKENZIE: The floor belongs to Ernest.

W. WILLIAMS: They have very good

reasons to support minimum wage.

GREEN: Why?

W. WILLIAMS: Their group that they

represent –

GREEN: Why –

W. WILLIAMS: They represent

middle class whites.

GREEN: No, no, no.

W. WILLIAMS: They don't represent

the poor blacks on the streets.

GREEN: The membership of the

NAACP probably has as many –

W. WILLIAMS: And they're owned by them.

They're owned by the AFL-CIO.

L. WILLIAMS: They aren't

owned by the AFL-CIO.

McKENZIE: Order. Order.

L. WILLIAMS: That is a conservative's view

McKENZIE: Order. Order.

L. WILLIAMS: That is a conservative's view

(Several people talking at once.)

MCKENZIE: Order! I'm going to --

I'm going to -- I'm going to --

I'm going to turn to Milton now.

Are you saying, then,

that you would advocate the repeal

of minimum wage legislation?

FRIEDMAN: Of course.

McKENZIE: You would.

FRIEDMAN: Of course I would.

(Several people talking at once.)

McKENZIE: Bill Brady, Bill Brady.

BRADY: I should like to ask Ernest

and Lynn why they want to restrict

a minimum price to labor.

Why don't you let me have a minimum price

on the products that we manufacture?

L. WILLIAMS: Well we aren't here,

as I understand it,

to discuss your problems at

the moment in terms of the owners –

BRADY: Is there a difference?

Why a minimum amount of profit --

L. WILLIAMS: Well, you're the people

I assume who are so anxious to

have the free market system and to

compete with each other and all

the rest of it,

we're talking about the needs of the

workers and, we're talking about the needs

of the people who come into a society

which isn't providing enough employment

for them, which clearly doesn't

seem to be able to provide

enough employment for them,

and what are we going to do?

And I think this notion that somehow

if we just let every guy who is running

a hamburger stand or whatever,

we just let all these people exploit the

young people of this nation in any way

they chose, pay them any little rate

they could get away with,

that everybody would then go

to work, would everybody

then have a job, is absolute nonsense.

McKENZIE: I want to bring Milton

to one of the final stages of his film,

which is Spartanburg, South Carolina.

FRIEDMAN: Sure.

McKENZIE: And I want to know what your

what conclusion you're drawing from that.

Would you, in effect,

like to see the whole of the United States

become, as it were,

Spartanburg writ large?

FRIEDMAN: Absolutely.

McKENZIE: Yeah. What would that mean?

And then we'll get their reaction to it.

FRIEDMAN: It would mean a widening

of the opportunity for everybody.

It would mean an opportunity for

employers all over to compete with

one another for workers.

It would mean an opportunity for

workers to find jobs which can make the

greatest use of their own skills

and their own capacities.

It would mean that consumers

would be able to get better

products at lower prices.

You know, consumers enter into

this situation, too.

You might think that somehow

or other, you know --one of the

things that's always a mystery to me,

if a $2.90 minimum wage benefits

people why wouldn't a $6 minimum

wage be better?

Wouldn't a $10 minimum wage be better?

Why don't these people come out

for a $200 figure minimum wage?

If all you had to do to make a country -

ERNEST GREEN: You're pretty smart -

FRIEDMAN: Two hundred dollars an hour.

W. WILLIAMS: Or extend it to babysitters.

FRIEDMAN: Yeah. If all you need to improve

the lot and the conditions of people

is to legislate a higher -

McKENZIE: You're back on minimum wages.

I want to know how Spartanburg -

Spartanburg improves matters because

it introduces a wider range of competition

and the real thing that protects the

worker is the existence of

alternative employers

seeking his services, just as what

protects the consumer is alternative sellers.

BRADY: Milton, you omit one thing

that it would do.

And it would result in a very

substantial increase in capital investment.

FRIEDMAN: Absolutely. It would.

BRADY: And capital is the

worker's second best friend.

FRIEDMAN: Sure.

L. WILLIAMS: This is only to say, surely –

FRIEDMAN: The reason why

everybody can benefit.

L. WILLIAMS: This is only to

say that a busy economy,

one in which there's investment

and development and so on is an economy

that's a good economy for

working people and for everyone else.

I think we say that in the AFL-CIO

at least once a month, all the time.

There's nothing in which --

there's nothing in which we're

more interested

than having a busy, functioning economy.

The question is how to bring that about.

I do suggest, and I think --

I think can be defended as long

as we want to discuss it, that the

prosperity we have in America today,

that the labor movements have made

an enormous -- the labor movement

has made an enormous contribution to that,

and in the absence of the labor movement

and in the absence of minimum wage

this would not be as prosperous

a country as it is.

That is not to say that it’s perfect.

McKENZIE: Now hold it there

-- hold it there, Lynn.

I want to get a reaction to that.

He stated the case for what

unions have achieved.

Could we go around, first of all,

do you accept any part of that?

W. WILLIAMS: No, it's preposterous,

you know, as I suggested before.

I mean, if we, you know,

if minimum wages could make people richer

McKENZIE: Unions we're talking about now.

W. WILLIAMS: Well, if unions

could make people richer -

McKENZIE: Yeah.

W. WILLIAMS: -- all you have to do

is tell people in Bangladesh,

Why don't you unionize and demand a

higher wage? You could be

rich like the United States.”

L. WILLIAMS: We're telling

everyone in the world.

W. WILLIAMS: It's productivity.

L. WILLIAMS: We told them in

Japan it works.

McKENZIE: Lynn -W.

W. WILLIAMS: The workers have higher

wages in our country because

they're more productive.

That's how you get higher wages.

And this just plain

-- I mean, it's nonsense.

BRADY: And why

are they more productive?

W. WILLIAMS: Because they have capital

BRADY: Enormous capital investment.

(Several people talking at once.)

BRADY: And the highest wages

are paid and in the higher

the capital-intensive industries.

L. WILLIAMS: And because there are

consumers to buy the stuff who

have wages which enable them

to go into the marketplace

and buy something.

BRADY: Without the capital investment

they wouldn't have the wage and it

would be no way of paying them

without the capital investment.

L. WILLIAMS: If all those workers

weren't making any money there

wouldn't be much prosperity

BRADY: There would be no way of

paying it without the capital investment.

McKENZIE: Ernest Green,

what's the reply, your reply?

GREEN: I stand by my initial statement,

that it is a prerequisite of the

democratic society to have trade unions,

organizations aligned, workers to band

together in their mutual interests, and -

W. WILLIAMS: Are you

saying voluntary associations?

GREEN: And if that, if that group --

I'm saying that trade unions like

A. Philip Randolph's sleeping car porters,

the Pullman car company would

have never, on its own, given those workers,

who worked very hard and were very

productive people, well educated,

any increase in their wages had it

not been for the intervention of Randolph.

FRIEDMAN: The crucial issue is whether

governmental measures which have

the effect of favoring union organization,

of giving them privileges and immunities

that are not accorded to other organizations

in the society, benefit the society

as a whole,

or harm the society as a whole.

The proposition I tried to make in this film

was that the source of the prosperity

of this country was freedom of enterprise,

freedom of employers to hire,

of workers to work for whom they

wanted to; and insofar as unions have

played a role, they have protected

some workers at the expense of others,

and have retarded the prosperity

of this country. I think that Lynn Williams'

statements to the contrary

cannot be supported

by any empirical or other evidence,

that he has, understandably

I'm not blaming him for this,

he would be faithless to his job

if he did not believe sincerely

in what he's saying. I'm not questioning his

sincerity, but sincerity is a

much overrated virtue in our society.

The plain fact is that there is no

evidence whatsoever that either unions

or minimum wages have made positive

contributions to the

prosperity of this country.

Some unions have, of course;

some unions have done great harm.

It's not an open and shut picture in

which you can make a sweeping statement.

But on the whole,

the growth of this country -

ERNEST GREEN: I'd like

for you to make a sweeping statement.

FRIEDMAN: I do. The sweeping statement

I make is that the prosperity

of this country derives primarily

from freedom of enterprise and freedom

to hire, to employ, to work,

and not from restrictive

measures imposed by trade unions.

McKENZIE: Everybody briefly now. Ernest

GREEN: And I would say that

the intervention

of a strong federal government,

who those employers hire,

the kinds of protection,

the wage standards, health conditions,

are the requirement of this government

to protect its people. Because the history

of it has shown that that hasn't occurred,

and in your case in Spartanburg,

South Carolina, again,

I argue that the only reason that they can

come back now and attract firms

from Switzerland

and Germany is because,

one that we had a strong government

that provided protection for all

of its citizens which

didn't occur fifteen years ago.

McKENZIE: Bill Brady.

BRADY: Economic freedom, in my opinion,

should not be abridged.

I think that these two gentlemen are

advocating that it be abridged.

They're advocating a retention

of the minimum wage.

They're advocating, I think,

Lynn Williams is advocating the

retention of the Davis-Bacon Act.

They do not, it seems to me,

believe that freedoms are

interdependent and indivisible.

There are freedoms --

there is economic freedom;

there is press freedom;

there is freedom of assembly;

there's religious freedom.

And you are advocating to me

a great abridgement of economic freedom,

and when you do that you injure the

other freedoms that we have.

And if you do it enough, as we are doing

in this country today, if you do it enough

we are in danger

of losing all of our other freedoms.

McKENZIE: Now we leave this

very spirited discussion,

and I hope you'll join us again

for the next episode of

Free To Choose.

(closing music)