Thursday, January 24, 2013

Union Membership Continues Its Decline ... That's a Good Trend for American Employees and Employers Alike

Perhaps it can be argued that unions once were a force which helped the cause of America's workers. But that was long ago when global competition wasn't an existential threat to U.S. companies and good U.S. jobs.

Unions in fact are government legislated and sponsored coercive socialistic organizations which offer less freedom to employees and refuse employers the freedom to choose not to deal with unions. They are in fact anithetical to a free market system based on individual choice and opportunity.

I realize many disagree with my view, but facts are facts. Think about it.

In 1948, legendary University of Chicago economist Henry C. Simons had this to say about the negative impact of monopolistic private sector labor unions in "Economic Policy for a Free Society:"

"Government, long hostile to other monopolies, suddenly sponsored and promoted widespread labor monopolies, which democracy cannot endure, cannot control without destroying, and perhaps cannot destroy without destroying itself."

Pretty strong stuff, to be sure, but it happens to be stuff which I believe foretold the future effects of both private and public sector unions in America.

My point is that unions serve no good purpose for U.S. workers today, and are counterproductive to an efficient work force. They're still stuck in their old monopolistic anti-competitive ways.

And will unions help with job security, high wages and getting or maintaining generous benefits for private and public sector workers? Again, I say no.

To the extent that these things exist in the future, and they will, it won't be due to the efforts of union leaders. It will be because companies and their employees are world class competitors.

But since they have no real competition as a monopoly, will the future be bright for public sector unions? Absolutely not.

And all that's due to one simple fact. Regardless of which way the political winds are blowing, the politicians are rapidly running out of OPM to spend freely.

The taxpayers are going to put government spenders on a fiscal diet. And since any money the government spends first has to taken from taxpayers, when We the People decide we've run out of money to hand over to the government knows best guys, the OPM game will have ended.

In other words, the money used to feed the government beast has become scarce and is in the process of becoming even more scarce in the years to come. And if you doubt the truth of what I'm saying, just ask a "sponsoring" taxpayer -- yourself.

The public sector will shrink, and the private sector will be strengthened as a result of additional investment and increased American competiveness due to that private sector investment. And that will be a very good thing.

But are unions really a thing of the past? Well, yes, at least that way we've known them. And nobody can stop the inevitable from occurring. At least that's the future I foresee for a resurgent American economy and stronger private sector coupled with a smaller public sector.

And that's a good thing for all American workers and their employers, too.

Is union membership a bad deal for workers? is subtitled 'Obama, unions and the anti-business agenda:'

"President Obama is a favorite among organized labor. So it’s surprising that . . . during Obama’s first term, the U.S. unionization rate for American workers declined faster than during two terms of President George W. Bush.

Who would have guessed?

President Obama’s first term has been a disaster for jobs. There are only 460,000 more nonfarm payroll jobs today than when he took office.

As the economy grew over the past year, the total unionization rate declined from 11.8% of wage and salary workers in 2011 to 11.2% in 2012. The private sector unionization rate fell from 6.9% to 6.6%, and the government unionization rate dropped from 37% to 35.9%.

The latest data continue a trend of steadily declining union membership over the past 30 years....

No matter how pro-union a president, an anti-business agenda results in lost jobs for non-union workers and union members alike. While Obama has championed union causes, his tax and regulatory policies have systematically discouraged business investment and job creation in America. . . . Consumer confidence has been low, resulting in lower consumption, which also affects employment.

President Obama seemed to do everything he could in his first term to help unions. Much of the $831 billion stimulus package was directed at unionized workers, either in the public sector, such as teachers, police officers, and firefighters, or private sector construction workers who got stimulus funds for “shovel ready jobs” that, as it turned out, weren’t so shovel ready. Obama’s Executive Order 13502, on project labor agreements, required construction projects over $25 million receiving federal funds to hire unionized workers. . . . 

Obama’s efforts to help unions by giving them more power have not succeeded in increasing union membership. Rather, union membership has declined even faster.

Growing sectors of the economy now are those that are non-unionized. It’s the unionized auto companies in Michigan, General Motors and Chrysler, that needed bailouts, not the non-unionized foreign auto companies in the South, such as Honda, Nissan, BMW, and Mercedes.

Right-to-work states, where workers do not have to pay dues to a union as a condition of working, have created more jobs than forced unionization states. Over the past 25 years, the 22 right-to-work states (i.e. not including the newly right-to-work states Indiana and Michigan) created 1.5 times as many jobs as the forced unionization states."

Summing Up

Unions did well in the "good old days" when a rising tide lifted all boats and the only issues were how big the piece of a rapidly growing economic pie unions would be able to negotiate for their members.

Globalization has brought competition, and union represented work forces are clinging to their ways of antagonism toward employers and the resulting anti-competitive and counterproductive work rules and practices. Meanwhile, the much more productive and focused non-union workforces for competitive firms have been kicking the butts of the union organized companies.

As examples, compare the union Michigan based auto companies of the north (GM, Ford, Chrysler) to the non-union transplant auto companies located in the southern United States (VW, Toyota, BMW). There are countless other similar situations in the steel and other manufacturing industries as well.

In any event, the fact that in percentage terms the competitive private sector in the U.S. now has only 1/6 as many employees represented by unions as the monopolistic government managed public sector has is noteworthy.

More importantly, it suggests that big changes lie ahead for public sector productivity, work rules, pay, benefits and union representation. The governments' big spending ways are about to end, as is runaway government spending, if only because they've run out of OPM to spend.

And when more of our dollars are kept in the private sector instead of being transferred to the public sector, America will once again be home to the world's most competitive companies and the most productive work force in the world.

As for both private and public sector U.S. unions, they will either change their antagonistic, non-productive and anti-competitive ways and work hard to help America better compete globally or they will simply disappear.

Either way works for me.

Thanks. Bob.

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