Ironically, union activity may even lower the wages of union members themselves. All too often union-negotiated work rules make entire companies and industries considerably less productive than they would have been. And one thing cannot happen in any company: wages cannot exceed productivity or the company goes out of business.
At one point, more than a third of the private sector workforce was in a union. Today it's 6.6%.There is no reason to think anyone is worse off because of the decline of the union movement. In fact, we're all better off. Without unions in the way there is more labor market mobility. Companies can meet their manpower needs based on the economics of production, not based on coercive powers exercised at the bargaining table. The entire economy is more productive than it would have been. Therefore, real incomes are higher today than they would have been.
As a Wall Street Journal editorial noted the other day:
According to the West Michigan Policy Forum, of the 10 states with the highest rate of personal income growth, eight have right-to-work laws. Those numbers are driving a net migration from forced union states: Between 2000 and 2010, five million people moved to right-to-work states from compulsory union states.
Also, union dues come out of workers' paychecks, so their take-home pay is lower. Hundreds of dollars a year. Unions are profit centers for union bosses, who pay themselves fat salaries out of the union dues.
In the public sector, however, union strength has been growing rather than retreating. This is worrisome because in this sector union members get to vote for their employers. Of course that would be true even if there were no union, but union organizations provide public sector workers with a powerful vehicle to punish politicians who do not accede to their demands.
We have all seen the results of this: organized teacher opposition to almost any reform that promises to improve the education of our children, post-retirement benefits that are unfunded and are threatening to bankrupt cites, and even entire states and a general opposition to needed restructuring in every public sector from the U.S. Postal Service to city hall.
John C. Goodman is President of the Goodman Institute and a Senior Fellow at The Independent Institute. He is the author of the widely acclaimed book, Priceless: Curing the Healthcare Crisis. The Wall Street Journal and National Journal, among other media, have called him the "Father of Health Savings Accounts.”