Ethical Teachings of the Torah

The Challenge of Money: Wages and Labor; Employer and Employee [part 5]

Theoretically, employer and employee are equal players in determining wages and working conditions, but in real life the individual employee is disadvantaged and his bargaining power is weaker. Employers normally are able to sustain long periods of negotiations or downturns in the market place, unlike the employee who is dependent on wages for his existence and so more vulnerable. Workers have therefore sought to improve their situation and their protection against exploitation or economic upheavals through unionization and collective bargaining. Is unionization and all that it entails legitimate in Judaism and under what conditions?
“Every association organized for one common purpose is to be considered as a city [that has the halakhic right to regulate prices, weights, and wages (Bava Batra 8b)]” (T’shuvot HaRashba 4:185). Modern rabbinic opinions have seen trade unions as associations of this type with recognized rights of organization and penalties for non- compliance. “Chazal recognized the regulations of craftsmen or of workers federations. In order to protect himself, the worker thus has the right to organize and enact suitable regulations” (HaRav Uziel, Chief Rabbi of Tel Aviv; Mishpatei Uziel, Choshen Mishpat 42). This concept of the social unit-community-state as an entity that has rights and obligations lies at the very essence of the Jewish nation- religion. This is expressed not only in the independent Jewish political states that existed in Eretz Yisrael but was continued in the communities that existed in the Galut till the 19th century emancipation. These were not communities as we have today that are voluntary religious associations, organizationally and conceptually similar to their non-Jewish counterparts, but actual autonomous mini- states that had the right of taxation to fund all communal needs and that of living according to Jewish legislation.
The ability to force all the workers in a certain industry to join or abide by the regulations of a union is the major source of power of organized labor. This monopolistic power is strengthened by the closed shop principle whereby the employer can be forced to accept only unionized labor. Although today unions are less powerful than they once were, these principles are operative in many areas in the economy through licensing, accreditation and academic or professional requirements, so that Judaism’s teachings in this respect are of considerable importance and relevance.
All the halakhic rulings and communal enactments regarding restrictive practices and limitations on competition apply to unionization and all the other forms of restraints on entry and on enforced wages, working conditions and pricing policies. In keeping with the principle regarding the rights of a city, adhered to by almost all the authorities and communities, decisions regarding unions and other such associations required the majority vote of all the members to be valid. “If they do not represent a majority of workers in an industry or profession then all their decisions are worthless. Even where they are a majority of employees it is unclear whether they can enforce decisions against the minority [unorganized workers] who can argue that since they do not share in the benefits of unionization [health insurance, pension plans, etc.] they should not be forced to abide by union rules” (Igrot Moshe, Choshen Mishpat 59).
Guilds, trade unions, licensing boards and professional associations serve a two fold purpose: They ‘police’ the quality of goods and services provided, through the supervision and training of the labor force, which is beneficial to society. At the same time however they are a barrier to entry of new players, restrain competition, increase costs to the consumers and earn monopoly profits for their members.
The Gemara (Yoma 38a) tells that the priestly House of Garmu refused to teach how to make Lechem HaPanim and the House of Avtinas refused to teach how to make Ketoret. Kohanim from Alexandria were unable to duplicate their products, so those in Yerushalayim demanded and received a 100% raise in salary. When rebuked for holding the Mikdash to ransom, they explained that the family tradition was that the Temple would be destroyed and they feared that then unworthy people would use the knowledge for personal or idolatrous purposes. The fact that the brides of Avtinas never wore perfume or that in the house of Garmu none ate refined bread, showed that they never used their monopoly for personal benefit.
The Sages then revised the rebuke thereby teaching a powerful lesson that can limit the exploitation, corruption and injustice that all too often flows from the monopolistic nature inherent in bodies like trade unions and professional associations

• Other Ethical Teachings of the Torah
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• Funding Social Costs - Taxation [2]
• THE CHALLENGE OF MONEY - Funding Social Costs - Taxation [1]