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Why Do We Need Unions? ^ | December 15, 2012 | John C. Goodman

Posted on 12/15/2012 6:19:09 AM PST by Kaslin

Michigan has now become the 24th state to give workers the right to work without having to join a union. The event provoked more than vigorous debate. State police had to be on duty to guarantee the safety and the ability of Michigan legislators to actually go vote on the measure.

So what is the controversy all about? I agree with folks on the left about the real issue. It's not about right to work. It's about unions themselves. Why do we have them? Why do we need them? What public purpose do they serve?

There's no mystery here. A union is an attempt to monopolize the supply of labor to an employer or group of employers. Like all monopolies, unions try to restrict supply and get a price (in this case a wage) above the free market level.

How is that possible? It's not possible without coercion ? both private and public. Faced with demands for above-market wages, employers will try to hire workers who aren't in the union. These are the laborers who the union is trying to keep out of the market. Although the unions call these workers "scabs," in the past they have disproportionately included minorities and women.

That's where coercion comes in. Professor Donald Dewey, my teacher at Columbia University, used to tell students, "There's no such thing as a peaceful picket line; a picket line has no other purpose than to intimidate." It's not an accident that the history of the labor movement is strewn with violence. Without the threat of coercion, competition in the marketplace will produce market level wages, just like competition for other goods and services produce market level prices.

Then there is the government. Although an attempt to restrain trade through monopoly agreement is actually a crime in this country, the law not only exempts labor unions, it includes provisions that encourage them. And although freedom of association is supposed to be enshrined in the First Amendment, the law creates a path for unions to force both employer and employees into a union monopoly contractual arrangement, whether they want to or not.

Let's put aside one widely believed myth: that unions somehow lift the wages of people who aren't in unions. Actually, the reverse is true. By restricting the supply of labor in the unionized sectors of the economy, unions artificially increase the supply (and therefore suppress the market clearing wage) in the non-unionized sectors.

Ironically, union activity may even lower the wages of union members themselves. All too often union-negotiated work rules make entire companies and industries considerably less productive than they would have been. And one thing cannot happen in any company: wages cannot exceed productivity or the company goes out of business.

At one point, more than a third of the private sector workforce was in a union. Today it's 6.6%.There is no reason to think anyone is worse off because of the decline of the union movement. In fact, we're all better off. Without unions in the way there is more labor market mobility. Companies can meet their manpower needs based on the economics of production, not based on coercive powers exercised at the bargaining table. The entire economy is more productive than it would have been. Therefore, real incomes are higher today than they would have been.

As a Wall Street Journal editorial noted the other day:

According to the West Michigan Policy Forum, of the 10 states with the highest rate of personal income growth, eight have right-to-work laws. Those numbers are driving a net migration from forced union states: Between 2000 and 2010, five million people moved to right-to-work states from compulsory union states.

Also, union dues come out of workers' paychecks, so their take-home pay is lower. Hundreds of dollars a year. Unions are profit centers for union bosses, who pay themselves fat salaries out of the union dues.

In the public sector, however, union strength has been growing rather than retreating. This is worrisome because in this sector union members get to vote for their employers. Of course that would be true even if there were no union, but union organizations provide public sector workers with a powerful vehicle to punish politicians who do not accede to their demands.

We have all seen the results of this: organized teacher opposition to almost any reform that promises to improve the education of our children, post-retirement benefits that are unfunded and are threatening to bankrupt cites, and even entire states and a general opposition to needed restructuring in every public sector from the U.S. Postal Service to city hall.

TOPICS: Business/Economy; Culture/Society; Editorial; US: Michigan
KEYWORDS: laborunions; righttowork; teachersunions; unions

1 posted on 12/15/2012 6:19:13 AM PST by Kaslin
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To: Kaslin

Unions will continue to be, if and when economics dictates that they make sense, and far be it from me to urge that they be banned.

What unions don’t need (any more, if ever) is legislated legs-up. Is it only employers and businesses that have the capacity to be evil?

2 posted on 12/15/2012 6:23:02 AM PST by HiTech RedNeck (How long before all this "fairness" kills everybody, even the poor it was supposed to help???)
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To: HiTech RedNeck

Unions have played a huge role in their own demise, by throwing all their support behind government mandates that have replaced the things that unions used to bargain for on behalf of their members. Once you have things in place like OSHA, Social Security, Medicaid, etc., a lot of the imminent urgency of things like workplace safety, retirement, and medical-care-at-someone-else’s-expense disappeared.

3 posted on 12/15/2012 6:50:17 AM PST by Alberta's Child ("I am the master of my fate ... I am the captain of my soul.")
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To: Alberta's Child

(Dunno if the little snark from Invictus is literally meant, or irony. I’ve found that I may be the skipper of my soul, but I’m not its captain. That title perforce goes to supernatural entities stronger than I. I have two rivals from which to choose.)

True, many issues that once fell within the purview of union/employer negotiations are now the purview of independent government regulation, for good or ill.

4 posted on 12/15/2012 6:55:15 AM PST by HiTech RedNeck (How long before all this "fairness" kills everybody, even the poor it was supposed to help???)
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To: Kaslin

The goon reaction to losing a vote:

5 posted on 12/15/2012 7:06:39 AM PST by GOPJ (Detroit should be renamed 'Michael Mooresville'...)
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To: Kaslin

To launder your tax money to buy more votes.

6 posted on 12/15/2012 7:35:54 AM PST by G Larry (Which of Obama's policies do you think I'd support if he were white?)
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To: Kaslin

It’s simple: unions protect the lazy, the incompetent, and the corrupt. And they’re perfect front organizations for international socialism.

7 posted on 12/15/2012 7:53:33 AM PST by IronJack (=)
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To: Kaslin
Q: Why Do We Need Unions?

I know! I know! I know!

A: To extort money from workers to be used by union Fat Cats to buy crooked politicians.

8 posted on 12/15/2012 9:04:49 AM PST by Iron Munro (I MISS AMERICA !)
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To: IronJack
It’s simple: unions protect the lazy, the incompetent, and the corrupt.

You have pinned the tail on the donkey. And, they have brought the same thing to government.

9 posted on 12/15/2012 10:39:31 AM PST by depressed in 06 (America conceived in liberty, dies in slavery.)
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To: Kaslin

Unions can serve a useful purpose when employers have the recognized right to either negotiate with them or not as they see fit. If many workers at a plant decide and announce that they’ll all walk out if an employer doesn’t offer them some particular concession, the employer may decide that the concession would be less expensive than having to replace all of the workers at once, or the employer may bid them “good riddance”. In many cases, the group of workers wouldn’t be able to make very significant unilateral demands, but they could improve their position by offering some consideration in return. If the group of workers had to offer an employer some value in exchange for the things it was demanding, such exchanges could work to the benefit of both the employer and employee.

The benefit of such groups could be particularly great in situations where workers are hired to perform particular short-term tasks. If a group of workers offers any prospective employer a promise that it will vouch for the quality of its members’ work, and if the group gets a reputation of upholding that promise, prospective employers may decide the assurance of quality is worth enough to justify hiring a member of the group, even if hiring some random person off the street might be cheaper. Of course, for the group to demand a significant price premium it would have to ensure that continuing members in fact do good work. Failure to do so would reduce the amount of extra money prospective employers would be willing to pay to hire group members.

The fundamental problem with unions is that the federal government gives them the power to make unilateral demands, and eliminates the need for the unions to offer employers something in return. I have a saying that while some people are inherently good, most people, and most organizations, are as good as they need to be. If unions can only exist by meeting the needs of both employee and employer, then they will meet those needs. If, however, unions don’t have to consider an employer’s needs, they generally won’t.

10 posted on 12/15/2012 5:00:21 PM PST by supercat (Renounce Covetousness.)
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