Saturday, February 17, 2007

Workers Without Unions Do Just Fine, Thank You Very Much

This opinion piece from the LA Times, hardly a conservative paper, hits the nail squarely on the head.

But maybe unions aren't so crucial to worker well-being. When more than 90% of the private-sector labor force isn't unionized, why do 97% of us earn above the minimum wage? If our bargaining power is so pitiful, why don't greedy employers exploit us and drive wages down to the legal minimum?

The simple answer is that bargaining power comes from having alternatives. Even in the absence of unions, employers have to treat workers well to attract and keep them. In a workplace as dynamic as that of the United States, where millions of jobs are destroyed and created every quarter, a company's ability to exploit workers is greatly limited by how easy it is to find another job.

Ultimately, it is competition among employers that protects us from exploitation. (boldface mine--Darren)

Written by an economist, the article is full of factual tidbits that will anger the rabid u-bots. Here's one:

Look at workers' share of the nation's income. In 1950, employee compensation was 53% of gross domestic income. In 2005, that number was 57%. Somehow, as unions' strength dwindled over the decades, employees' share actually grew. And it's a share of a dramatically larger pie, the result of the incredible economic boom of the last half a century.

But, but, unions are good! They're necessary! They just are! Unless this is true:

Unions help those they represent by trying to raise wages above what they would otherwise be. To the extent they succeed, they reduce the demand for labor in unionized shops. That means more workers have to find employment in non-unionized shops, pushing down wages there. That's especially tough on workers with limited skills and education. The sad irony of unions is that they can only improve the lot of their members at the expense of other workers.

But, but...

Anyway, the closing sentence presented an unexpected little swipe:

Rather than trying to revitalize unions, we ought to be looking for ways to revitalize our moribund public education system. That is the road to true, long-term prosperity.

True enough.

1 comment:

Nick Kasoff said...

The cost of unions goes beyond increased wages. The requirement of nearly every union contract that pay and promotions be tied to seniority, and not merit, flies in the face of good management. Add to that the greatly increased difficulty of firing a non-performing employee in a union shop, and you have a recipe for failure.

Nick Kasoff
The Thug Report