Why Unions Are Harmful to Workers
Published March 17, 2011
Wisconsin Governor Scott Walker has finally won his first battle with public employee unions. But the fight against excessive union rights now moves to Idaho, Indiana, Michigan, New Hampshire, Ohio, and Tennessee.
Of course, union leaders are upset, with AFL-CIO President Richard Trumka recently telling PBS’s "News Hour": “This is about [Gov. Scott Walker] trying to take away the rights of workers to come together to bargain . . . .”
But in fact, Governor Walker’s budget will help the vast majority of workers in the state. Mr. Trumka naturally wants to make it appear that he is fighting for workers generally, but that is not the case. He is just fighting for some workers, but he is hurting other workers -- other union workers who are laid off because the state cannot afford them or other workers who are forced to pay higher taxes.
Unions are harmful because they act as monopolies. If the union members won’t work, the law makes it extremely difficult for anyone else to step in and do their jobs. As a result, union workers have little competition -- so they can demand higher wages and do less work.
By threatening to stop work if companies don’t pay employees more, unions force companies to layoff some workers. That hurts some union workers. Unions don't just pit workers against employers. They pit a select group of workers against consumers, stockholders, and other workers. Unions don't even make agreements that are in the interest of all their own workers, just those in the majority, usually just older workers with more seniority.
Suppose demands for higher wages or benefits means 20 percent of unionized workers would be fired. That isn't such a hard decision for a union. Twenty percent of its members will oppose the agreement, but they won't be union members for long. Most of the remaining 80 percent are likely to support the agreement.
Unions also protect seniority, not the most productive workers. When layoffs occur, it is the most recently hired workers who are laid off first.
Recently, there have been cases of teachers’ unions holding lotteries to see who gets laid off. When was the last time you saw a private company make hiring/firing decisions that way?
Union advocates talk about the "right" to collective bargaining, but it is unclear why this "right" trumps the right of other workers to have a job.
In Wisconsin, Governor Scott Walker threatened to lay off 6,000 workers if he wasn't able to get his union bill passed. But Trumka and other union members, over the objections of Wisconsin’s non-partisan Legislative Fiscal Bureau, claim that the layoffs are all part of budget trickery, alleging that Wisconsin actually has a budget surplus.
Bad corporate monopolies face competition. By restricting sales and raising prices, other companies see a chance to start producing the product and make profits.
There is a reason why only 6.9 percent of private sector workers are in unions. Unions have tried reduce this competition by representing the workers in an entire industry, such as steel, cars, or coal mining. That way they can raise wages without worrying about non-union companies getting the jobs. But ultimately there is still competition from foreign workers. Unions help ship a lot of would be American jobs overseas.
So how do unions end up representing 36.2 percent of public sector workers? Simply put, they have an additional type of monopoly. Not only do unions have a monopoly in bargaining with the government, the government has a kind of monopoly as well.
Take education. Parents pay for public education through their property and other taxes -- whether they send their kids to public or private schools. Public schools must really be a lot worse than private ones before parents are willing to pay the public school taxes and still pay private school tuition on top of that -- effectively paying twice for school.
In contrast, private schools that kept paying more and more for teachers would quickly find themselves out of business. Not surprisingly, teacher unions not only oppose any weakening in their current rules that they alone represent teachers in any negotiations, but they also strongly oppose anything that would create competition for public schools, whether it be charter schools, vouchers or tax credits.
Gov. Walker was willing to compromise and let public employee unions negotiate over everything: salaries without limit, mandatory overtime, performance bonuses, hazardous duty pay and classroom size for teachers. Yet, he drew the line at pensions, which have accumulated huge unfunded liabilities. At least voters could see the current costs of paying public employees higher salaries, but both politicians and unions have proven untrustworthy over the hidden long-term costs of these retirement payments. But even that was too much for the unions and their Democratic allies.
Wisconsin’s public employee unions have been problematic in another way: high mandatory dues. With union dues of $500 to $1,000, employees have had to give money to unions whether they approved of what they did with the money or not. Walker’s changes finally give government employees the choice of whether they would rather spend their money on something other than unions. The new law doesn’t supersede union contracts that are already in place.
Unfortunately, Wisconsin Secretary of State Doug La Follette, a Democrat, has taken the unprecedented practice of delaying a governor’s request to immediately publish the new law, a requirement that must be met before the law goes into effect. Delaying the publication date until March 25 allows unions and local Democrat officials around Wisconsin rush to pass contract extensions that protect unions from increased contributions to their pensions and health care benefits.
Few would sympathize with a company that raises prices by restricting the amount they produce, let alone supporting the government protecting the monopoly from competition. But unions do that and more, and they only accomplish this through government force.
Well-paid union members shouldn’t be given benefits at the expense of other Americans.