What Margaret Thatcher Can Teach Us About Unions

April 15, 2013 08:07
What Margaret Thatcher Can Teach Us About Unions

Government unions in particular are an obstacle to reforming pensions and improving public schools. At some point these problems will need to be resolved – and a confrontation with unions is almost guaranteed.


By Paul Kersey, Director of Labor Policy at Illinois Policy Institute


Former British Prime Minister Margaret Thatcher, who passed away on Monday, was among the world’s Barack Obamagreatest political leaders. Her success in restoring economic freedom and establishing lasting prosperity leaves her second only to Winston Churchill on the list of the best prime ministers in British history. Among her most important accomplishments was facing down the National Union of Miners in the coal  miners’ strike of 1984.

Coal, like many major industries in England at the time, had been nationalized, making coal miners something like government employees. But the National Coal Board ran too many mines; many of which were uneconomical. Thatcher was determined to break up and privatize the mines, along with many other nationalized industries, but knew that if she tried the unions would resist.

The unions had already broken the last two prime ministers – Tory leader Edward Heath was weakened by a coal miner strike in 1974 and a string of strikes staged by autoworkers, truck drivers and even gravediggers during the 1978-79 “Winter of Discontent.” James Callaghan’s Labour government brought down the strike, giving Thatcher her opening. (Here’s a cautionary tale for the American left – Callaghan had merely proposed a 5 percent a year limit on pay increases – but his allies in the Trade Union Council refused to accept his wage policy.)

Unlike Callaghan, Thatcher was not politically dependent on labor unions; her party and her ideology left her free to confront them. And unlike Heath, Thatcher anticipated strikes and had a contingency plan in place when the coal miner strike broke out: electrical plants stockpiled coal and were also rigged to run on gas. Non-union truck drivers were recruited to deliver imported coal. A special police unit was set up to deal with violent demonstrations. Where her predecessors had counted on conciliation, Thatcher was ready for a fight.

So when the miners struck in 1984 the government was prepared, and while the confrontation was long and hard, in the end the miners returned to work on more or less Thatcher’s terms. Thatcher was able to implement her policy: unproductive mines were closed down, the coal board was dismantled and the mines sold to private investors. The National Union of Miners survived but was no longer invincible. Its defeat paved the way for the privatization of a range of British industries, which in turn led to a reinvigorated Britain.

Thatcher understood that unions could not continue to be rewarded for continually piling demand upon demand without regard to the effect this had on the economy. Britain needed the unions to lose power, and Thatcher had a plan to bring about the necessary defeat. “The Economist” called her success against the National Union of Miners “the most important thing she ever did.”

tapewormToday in Illinois the state and many local governments are struggling with unaffordable government worker wages and retirement benefits. Government unions in particular are an obstacle to reforming pensions and improving public schools. At some point these problems will need to be resolved – and a confrontation with unions is almost guaranteed. Politicians on this side of the Atlantic, especially in Illinois, would do well to consider Margaret Thatcher’s example.




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