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Today’s unions have lost their way

Unions have always had an alluring appeal that comes from protecting laborers. The purpose of labor unions are to negotiate fair terms for workers who do not have a voice in management. And in some ways, particularly in their early years, unions have been successful. But like all idealistic ventures, unions have fallen short of their lofty goals.

Instituted during the 19th century in response to the industrial revolution, unions provided a necessary protection for workers by demanding employee safety and job security.  However, over the years, the pendulum has shifted and the balance of power between unions and management has tipped in favor of the employer.

Unions negatively impact the free market principle of supply and demand.

By forcing wages and pensions above competitive levels, unions directly raise the cost of labor.  This results in fewer jobs available within the company.

Additionally, union laws make it extraordinarily difficult for companies to replace workers who do less work and yet earn higher wages.

The threat of strike pits unionized workers against not only the corporation, but consumers, stockholders, and other workers.  One man’s profit is another man’s loss.  And in this case, the union’s gains often hurt everyone else.

When a worker signs on to a job with a certain pay and an understood prospect for bonuses, they should do their job as promised or be subject to dismissal. If a corporation is held accountable to their end of the bargain, so should the workers.

The ability to fire a unionized worker is usually governed by the union, and they often have the right to use collective bargaining to either keep the worker’s job or to work out a deal. So when a company is unionized, it is often much more difficult to hold workers accountable for their productivity.

Unions are not the underdogs they are reported to be. They are exempt from taxation, they do not pay tort damages when they cost men and women their jobs, and they can burden both members and nonmembers with compulsory dues that are often used for political purposes, not collective bargaining.  The Wall Street Journal found that politics and lobbying account for about 16% of total union expenditures.

A common myth about unions is the idea that they reduce discrimination.  In actuality, unions have had a history of racial and gender demarcation practices. In the 60’s, union leaders would often refuse to negotiate for African-Americans.  Now that minorities are allowed in unions, some people claim the problem still exists but has been harder to pinpoint. They claim the discrimination is internal, with minorities having reduced access to skilled jobs or union leadership roles.

Proponents of unionized labor would argue that labor unions rectify the power disparity between employees and employers.  They would say that corporations exploit labor by paying workers less than they are worth.  However, the laws of economics argue otherwise.

If an employer were to depress wages below marginal productivity, other companies would be enticed by the cheap labor and would hire those workers.  The result is then an upward pressure on labor prices.  The beauty of the free market is its ability to internally correct itself.

There is also a misconception that unions act in the best interest of all their members.  Truthfully, unions do what is best for the collective good; but the majority typically are senior members.  And when layoffs are negotiated, the newest members are fired and the productivity of workers is not considered.

High labor wages and expensive, elaborate pensions brought on by unions have a tendency of driving up labor costs and killing competition, the backbone of American industry.

The economy cannot thrive if labor unions persist in high demands that paralyze the free market.

Sarah Backer is a business sophomore and may be reached at [email protected].

2 Comments

  • I absolutely agree that at one point in our history labor unions were a necessity to protect workers and improve working conditions. I don’t think they have outlived their usefulness, but I do think in many cases the demands they make to employers are as egregious as the pay, benefits and /or working condition issues they are supposed to be trying to improve. Sadly too many unions have become multi million dollar “industries” of their own and have lost perspective on what they really should be doing. Excellent OpEd. Young people with your view of the world give me hope for the future.

  • Unions gave us weekends and limited work days to only 8-hours. They also helped put an end to child labor and other forms of worker exploitation.

    “By forcing wages and pensions above competitive levels…”

    You mean forcing corporations to pay their employees a living wage? Ask the employees at McDonalds and WalMart right now what they think of Unions, or the thousands of public employees in Wisconsin who protested against Gov. Walker last year.

    “union laws make it extraordinarily difficult for companies to replace workers…”

    You mean workers actually have a shred of job security?

    “If a corporation is held accountable to their end of the bargain, so should the workers…”

    But who hold corporations accountable? Corporate law is written by corporations, and it is hardly fair. They have massive amounts of money and influence and today many have grown into multinational conglomerates so they are not even accountable to any one country’s laws anymore. Unions are not perfect by any means but they are still a necessity thanks to right-wing Tea Party governors like Scott Walker who seek to strip employees of all bargaining rights and greedy CEOs like at Hostess who refuse to negotiate wages with employees yet pay themselves huge bonuses. Your argument, Sarah, is not new. If corporations and their CEOs operated fairly without constraint, there would be no need for unions, but we all know they don’t.

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