"Unions succeed by leveraging
special government-granted powers to eliminate competition from other
workers who are willing to do the same work for less. (This is a form of
collusion that would be legally prosecuted if done by anyone else.) Those
displaced workers either become unemployed or must go elsewhere to find
jobs, increasing the supply of labor services in nonunion employment,
pushing down wages for all workers in those jobs. The resulting wage
premium does not come from employers, as union rhetoric implies, but
primarily from other workers' pockets. Because only about 7 percent of
our private-sector workforce remains unionized, more than nine in ten
private-sector workers are injured by such union power."
More for Me Does Not Mean
Better for Us
Tuesday, March 08, 2011
by Gary
Galles
In the Wisconsin labor dispute, now increasingly spreading nationwide, I
have lost count of the times union defenders have justified their
position based on little more than the assertion that some union
benefitted them or some member of their family followed by the
conclusion that all Americans must therefore gain. Unfortunately, that
"logic" is invalid. A policy that gives me more does not
mean the result is better for us. And the primary effect of unions
and union-backed policies is to harm the vast majority of
Americans.
Unions succeed by leveraging special government-granted powers to
eliminate competition from other workers who are willing to do the same
work for less. (This is a form of collusion that would be legally
prosecuted if done by anyone else.) Those displaced workers either become
unemployed or must go elsewhere to find jobs, increasing the supply of
labor services in nonunion employment, pushing down wages for all workers
in those jobs. The resulting wage premium does not come from employers,
as union rhetoric implies, but primarily from other workers' pockets.
Because only about 7 percent of our private-sector workforce remains
unionized, more than nine in ten private-sector workers are injured by
such union power.
The vivid history of union violence and threats against
"uncooperative" employers and employees, including thousands of
recorded attacks, also clearly harms union members rather than advancing
their interests. But leaders are insulated from accountability by the
1973 Emmons ruling, which former Attorney General Ed Meese testified,
"permits union officials -- alone among corporate or associational
officers in the United States -- to use violence and threats of violence
to life and property to achieve their goals."
Aware that their special grant of government power stops at the border,
unions have been the primary movers behind government protectionism of
all stripes undermining the well-being of workers who would have gained
from expanded exports as well as those who, as consumers, would gain from
lower cost and/or higher quality imports.
Unions' sellout of workers' interests has included conducting campaigns
to harass and regulate nonunion apprenticeship programs out of existence,
thus keeping other workers from acquiring skills to earn more and compete
with the unions in the future. They have also used environmental
challenges to stop construction projects until labor agreements
guaranteeing that the jobs go to union workers could be
extorted.
Their support for the
Davis-Bacon
(prevailing wage) Act has ballooned government construction costs for
decades, raising tax burdens on everyone else. They have also managed to
hamstring the Supreme Court's 1988
Beck decision that union workers can withhold support for political
activism they disagree with.
Unions have also been major supporters of innumerable schemes to impose
higher taxes and regulatory burdens, thus reducing others' employment
prospects. Further, because those burdens reduce saving and investment,
they reduce the accumulation of productivity-enhancing capital, and with
it, the growth of workers' earnings over time. And all this has occurred,
even though more than a third of members routinely vote against the
positions their union leaders force them to fund with their
dues.
What changes when we focus on government-union workers, now more
than half of total union membership? They have more power to impose harm
on others.
In comparison to private-sector workers, government unions don't face the
discipline of foreign competition. It is also harder to substitute
capital equipment for overpaid workers in such "service"
industries. Government agencies are monopolies, which need not compete
with alternative providers. Government unions donate hundreds of millions
of dollars each election cycle, often with forced dues (unions spent more
than $100 million to defeat a California initiative that would have taken
away that power to harm many of their own members) to control who they
will negotiate with. (This power is enhanced by gerrymandered
"safe" districts, which turn union control over Democratic
primaries into control over general election results.) Beyond their
financial clout, union members also directly influence the design and
implementation of legislation and regulations.
Government unions also leverage temporary political majorities into
permanent and expanding gains, due to court rulings that once government
has promised its workers something (as with sweetheart pension and
healthcare deals), it can never be taken away, regardless of the adverse
effects on taxpayers. This is particularly important, because government
unions deal with politicians whose short-run time horizons and largely
ignorant "customers" enable them to make special deals whose
effects are only ultimately revealed after they are beyond any
accountability.
Perhaps most important, unlike private employers, who must find willing
customers to pay the cost of richer labor deals, government unions can
use the coercive power of government to force even unwilling
"customers" to pay the costs through their taxes (and
increasingly, through the crowding out of spending on other government
programs, as labor deals' adverse impacts on budgets grow over
time).
Unions claim to advance the interests of all working men and women. But
they actually injure the vast majority of Americans, both as workers and
consumers, to advance their own interests. Government-union members,
despite self-congratulatory claims like "we do it for the kids"
(although their forcing overpayment for providing those services and
sacrificing those they "serve" whenever it conflicts with their
compensation demands makes "we do it to the kids" more
accurate), gain even more for their members by imposing even greater harm
on others. And groups who use their power for their own benefit at
others' expense (which would also include those involved in robbery,
fraud and organized crime), undermine Americans' shared interests rather
than contributing to them.
Gary M. Galles is a professor of economics at Pepperdine
University.
http://mises.org/daily/5092/More-for-Me-Does-Not-Mean-Better-for-Us
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