The Labor Day holiday is always a time for union bosses and the media to reflect on the role that unions play in society. Not surprisingly, with a mere 11.9% of America’s workers unionized today (6.9% in the private sector), between the unionized media and press releases issued by union communications departments, the majority of stories about Labor Day center on what used to be or the current ills ailing the moribund labor movement.
Mr. Thompson Will Be Speaking…
Later this week, President Obama will be speaking on the state of the economy and the heretofore less-than-stellar performance of his efforts to create jobs. He will, undoubtedly, engage in more class warfare, Bush and GOP bashing and anti-Wall St. demagoguery before he calls for more spending, higher taxes and “shared sacrifice” (aka, his vision of W.T.F.). The one thing he will likely not be talking about is how his union appointees National Labor Relations Board and Department of Labor are helping unions destroy the very job creators they so desperately need.
Uncompetitive Unions.
Unions and unionized workplaces have been declining for decades. While much of the commentary often focuses on the shrinking percentage of union members—less than 10% of union-represented workers ever voted for unionization—very few have focused on the shrinking number of unionized workplaces that has occurred over the last several decades. Moreover, of those who have written about the declining number of unionized workplaces, far fewer have focused on the jobs-killing effects that unions have on private businesses that compete in a free marketplace (both globally and domestically).As many know, mass unionization in America coincided with the enactment of New Deal legislation enacted during the Roosevelt years. However, in 1947 (shortly after World War II), unions peaked in the United States at 35.5% before beginning their almost steady decline. While the economic boom that created the so-called “middle class” came as a result of the U.S. being the only primary manufacturing economy left unscathed as a result of World War II, the destructiveness of unions on jobs began to be felt by the steel industry as a result of the Great Steel Strike of 1959.
While unions and their supporters on the Left like to blame Corporate America for the de-unionization of the U.S. that has transpired over the last 30 years, the reality is that unions add costs that are unrelated to wages and benefits and often unsustainable in a competitive environment.
The Union Tax.
Unions and their supporters on the Left often argue that unionization is good since it (arguably) puts more money in workers’ pockets. Unfortunately, the corollary question is never asked: What good are higher wages and benefits on the unemployment line? In other words, what good is a union if the union eventually drives your company out of business?Leftists often focus purely on the wage and benefit effect on workers and all-too-often ignore the effects that unions have on companies. For example, some years ago, President Obama’s former economic advisor, Larry Summers, wrote:
Another cause of long-term unemployment is unionization. High union wages that exceed the competitive market rate are likely to cause job losses in the unionized sector of the economy.However, Summers’ statement was made in the context of unemployment and did not address the overall negative effects that unions have on companies and their ability to compete.
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