Less than a year ago I wrote about the potential union strike in Las Vegas. This was a big deal locally because the unions hadn’t gone on strike in many years but it also recalled larger factors that show the problems with unions. At the time, I wrote that although the unions ended up winning key concessions, they are on the losing side of the war.
Historically, even a union victory will ensure their long-term defeat. They can’t fight the future as disruptive technologies render old jobs obsolete and create new jobs for which they aren’t qualified. This would be like horse-carriage and candle-maker unions going on strike to protect themselves from cars and light bulbs.
Unions in the past were often a necessary correction to enact needed changes to provide basic safety, but now they often try to deny the reality of basic economics, making lower-skilled jobs more expensive than they should be and denying market forces. Unionized labor and their strikes end up making their jobs so expensive that companies look for cheaper alternatives, like different products or automation. For example, coal union jobs became so expensive and strikes so disruptive that companies moved to oil-based products. The fight for $15 minimum wages has led many fast food restaurants to rely on automated kiosks.
It wasn’t surprising at all that less than a year after this bruising fight with the union, two of the major employers in Las Vegas have announced layoffs. Caesar’s Entertainment announced over $40 million worth of cost-cutting measures including layoffs and cuts in hours. MGM then announced over $100 million of the same. What should be most chilling for the unions is the installation of automatic machines that both deal and serve drinks, the two staples of the Las Vegas gambling economy. The companies say these machines are not replacing jobs, though that is most likely because admitting that fact would invoke contract obligations with the unions. Las Vegas regularly makes the list of most vulnerable job markets to automation and this is just the testing phase of the eventual reality. Some reports say they will lose 65 percent of their jobs in the next six years.
So the Las Vegas Culinary Union secured higher pay through the threats of a strike, and less than a year later many are facing fewer hours and layoffs, and automation is being introduced that will eventually replace them altogether. Like I said back then, they may have won that battle, but they already lost the war.
