Down With Unions

Unions are bad for this country. Unions use government power to gain a monopoly on the right to bargain on behalf of employees over wages, hours, and working conditions. The government forcibly prevents employers and non-union employees from arriving at separate agreements and prevents employers from favoring non-union workers. As with most disruptions with the free market, this results in inefficiency and the use of government to bleed the taxpayers for private gain.

Backed by government power, unions are a drag on the economy. George Reisman and other economists argue that unions ratchet up wages above the market rate. This reduces employment in industries forced to employ union workers. The background idea here is that if the price of something increases, buyers purchase less of it.

Union wages and benefits also decrease the competitiveness of the economic sectors they inhabit. The American car, steel, and textile companies are sinking in part due to union-fueled costs. They seek tariff-protections that hose the taxpayer. The destructive effects of unions on competitive industries explain their decline in the private work force and growth in the public one, which is less subject to competitive pressures. The percentage of unionized workers in the U.S. civilian workforce has dropped from 33% in 1955 to 13% today. During this period, the percentage of the union members that work for the government went from about 2% to about 38%. The anti-competitive effects also explain the faster economic growth in the right-to-work states, that is, states where employers are barred from firing workers who refuse to pay union dues or fees.

My guess is that unionization in part explains why federal civilian workers do better than workers in the private sector. According to Chris Edwards of the CATO Institute who used Bureau of Economic Analysis numbers, in 2005 the average compensation (wages plus benefits) of the federal workers was twice that of private workers ($106,579 vs. $53,289) and recently the latter have been growing more than twice as fast (38% vs. 14% increase over the last five years). The private jobs are also far less secure with layoffs and firings being four times more frequent in the private sector. The compensation and security are good for the persons with the federal spots, but bad for the taxpayer and the economy. In addition, unionized government workers form a powerful constituency for even higher taxes and more spending.

Unions are also in bed with the Democratic Party. This should grate on those who don’t like really high taxes and those who are offended by the use of union dues for political causes. For example, the members of the National Education Association (NEA) members comprise around a quarter of the delegates at the Democratic National Convention. In spending, they heavily favor Democratic candidates. For example, journalist Peter Brimelow asserts that historically as much as 98% of the NEA’s money has gone to the Democrats. In addition, to being the Democratic Party’s ATM, unions also are directly involved in politics. For example, they recently poured in $100 million against a California initiative that would have made it more difficult for the state to raise taxes.

One of the places where union activity is particularly destructive is in K-12 education. Neal McCluskey also of the CATO Institute notes that between 1965 and 2003, U.S. per-pupil spending, adjusted for inflation, nearly tripled while academic achievement stagnated. Internationally, the United States spends more per capita on education than any other country and produces mediocre results compared to peer countries. Teacher unions such as the NEA and the American Federation of Teachers (the union for Dunkirk and Fredonia teachers) are a major cause of this poor performance. These powerhouses have over 3 million members, $1 billion in annual revenues, and as of 2003 represented almost all of the teachers in the 34 states that require school boards to bargain collectively with the teachers. These unions fight educational reforms such as charter schools, vouchers, and removal of incompetent teachers, reforms that would save the taxpayer money and increase student learning. Instead, unions focus on increasing their revenues by increasing the number of teachers and the pay rate per teacher. This is hardly surprising. As Albert Shanker, the former president of the AFT said, “I’ll start representing kids when kids start paying union dues.”

Now I should mention that in my work at Fredonia, I’d had the chance to work the local leaders of the United University Professions and specialists at the New York State United Teachers. Without exception, the persons I’ve dealt with were principled, bright, pleasant, and caring. That said, the fact remains that unions, at least as currently propped up via government power, harm the citizens of this country.