Diary

Do We Need Unions and the Real Reason for Declining Membership

In a previous article, I argued that a new Republican Party must stand for individuals and families.  Nothing is more antithetical to those notions than organized labor.

To understand this notion, one needs to ask a simple question: Do you want to be rewarded for your individual efforts, or do you want to be treated like other workers in your company where seniority dictates promotions and everyone receives the same pay regardless of their efforts?  The latter is what organized labor promises.

The number one goal of organized labor is collective bargaining.  It works under the theory that more can be gained collectively than can be gained by individual negotiation.  Perhaps this made sense in yesteryear when we were a manufacturing-based economy where individual skills made no difference on the tedious boredom of an assembly line.  Organized labor and the Democratic Party are living in those years yet claim they are “progressive.”  If anything, they are regressive.

Today’s fastest growing jobs are knowledge-based.  Donald Trump rails about bad trade agreements sending manufacturing jobs overseas.  He is partially correct, but fails to mention why those jobs left America- because it is just as easy to assemble a car using lower paid, non-union workers abroad as it is in the United States.  No special skill sets are required.  He also fails to mention that technology and mechanization are greater causes for the loss of manufacturing jobs than free trade agreements.  You want to really increase manufacturing jobs in America?  Get rid of mechanization and robots and the like, but expect lower productivity at a higher cost to the consumer.  It is simple economics, something Trump should have learned before getting to the Wharton School of Business.

Today’s jobs involve individual efforts and appropriate rewards for those efforts.  Should all Web designers at a firm receive the same rate of pay?  Should all public relations personnel receive the same rate of pay at a firm, even those who do little to nothing?  That is the reality that unions face.

Unions argue that they can attain greater wages for their members.  Statistics show that non-union workers get 79 cents on the dollar when compared against unionized counterparts performing the same task.  That much may be true, but that extra 21 cents does not magically appear.  Also, it is not coming out of the company’s profits.  The increased costs at 21 cents per hour are passed onto consumers.

Now for the tricky part.  Employers can pass on these increased costs with success only when consumers are denied a choice.  Domestic companies no longer hold a monopoly on consumer goods.  Thus, the increased labor costs cannot be passed onto consumers.  Many like to rail about wage stagnation which has grown worse under Obama.  Trump points to free trade agreements.  The Democratic Party, living in the 1930’s, sees increased union membership as the cure-all.  Neither are correct in the least.  NAFTA alone, it is estimated, saves the average American consumer $2,000 a year in lower cost goods.

Further, where unions do exist, that 21 cent discrepancy is less attributable to the negotiating prowess of organized labor than it is to the selective manner in which employees hire.  For example, suppose you are a janitorial service that is unionized and the collective bargaining agreement dictates you hire someone at $35 an hour.  Are you going to hire anyone off the street, or one with janitorial experience?  In effect, unions serve as a serious obstruction to people entering the labor force.

The one area where unions have seen success is with public workers.  The reason for that is public workers face no competition.  Union relevancy- which may be their better strategy for swelling their ranks- is replaced by blocking right-to work laws and by organizing public workers.  A government unit will not go bankrupt because they have to pay these union members more and offer them lucrative benefits; they can always just raise taxes.

But here is the rub on that move: there are more taxpayers than there are public worker union members.  Atlantic City, New Jersey is a great example of how a public worker union works and what happens when competition is introduced.  That city has serious financial problems due to a declining tax base.  Garbage pick-up is handled by the city with workers paid for by the city and trucks owned by the city.  They are very well-paid with excellent benefits.  The county municipal utilities authority tendered an offer to take over trash and recycling pick-up that would have saved the city about $2 million annually.  This offer was rejected a few years ago at the insistence of the union that represented the trash collection department.  Faced with an unpopular property tax increase, residents are now demanding that the city go back to the utilities authority.  Although the revised offer would save less (but still save) the city could not work out a deal because the union insisted that the city workers be hired.  Because of the union, all sides end up losers.

Changing management techniques have also lessened the need for unions.  While the Left likes to portray employers as slave masters and evil greedy capitalists, some government regulations have replaced the roles formerly played by unions regarding working conditions.  Some examples are child labor laws, occupational safety rules, and overtime compensation rules.  Regardless, gone are the days of the Scrooges running businesses.  Perhaps that is one reason that a Gallup poll found that 80% of non-union workers expressed a desire to remain non-union.  When given the opportunity to weigh the pros and cons of unionization, workers defer to non-unionization.

It is these facts that account for declining union membership.  It is why the Left, the Democratic Party and organized labor seek to change the rules through EFCA and the ambush election law, seek unionization in areas without competition (public workers) and search for new targets (service employees).  What they cannot win in the court of public opinion, they seek to will upon the workforce.  For a political party that describes itself as “progressive,” it still lives in the 1930’s and the heyday of unions.