Why favoring unions will not grow the economy

I have been writing and talking about the Unionized States of America for many months - a phrase that evokes how Obama and company have gone into overdrive to empower their union allies at our expense. Lee O'Hanian, a professor of economics at UCLA, weighs in over at the Wall Street Journal on the dire economic implications of this tectonic shift in government policy, noting that employment figures remain very weak:

.. [R]ecent decisions by President Obama and his administration to increase unionization are steps in the wrong direction.
These steps include executive orders that increase union bargaining power, including one that gave preference to union labor on big federal construction projects, and a recent revision of a 75-year-old National Labor Relations Board ruling that now makes it easier for airline and railroad workers to organize.
From the beginning of his term in office Mr. Obama has made union priorities his priorities, most conspicuously by supporting the Employee Freedom of Choice Act (EFCA). This misleadingly named bill would replace the secret ballot with a signature on a card, the so-called card check, in union elections. It would also require mediation if the union and the employer can't reach an initial union contract, and impose binding arbitration if mediation is unsuccessful.
EFCA is currently stalled in Congress because of the controversial card-check provision. Nevertheless, Craig Becker, whom Mr. Obama put on the National Labor Relations Board, argued in a 1993 law review article that the NLRB can rewrite union election rules without Congressional approval. The five-member board is made up of three Democrats and two Republicans.
Those want more unionization claim it is necessary to raise wages. Instead it will further depress the economy. My research suggests that if unionization rates returned to 1970s levels (roughly in the mid 20% range of the private work force), and if new unions could achieve the same wage premium as existing unions have achieved over nonunion workplaces, then employment could decline by about 4.5 million and real GDP could fall by about $500 billion per year.
Why? Unions raise members' wages by restricting competition, much as a business monopoly raises prices by restricting competition.

One could add the frequent White House visits by Andy Stern, the former leader of the powerful Service Employees International Union, who boasted of the vast sums of money his union spent to elect Barack Obama and his expectations that payback would follow. One could also add the hundreds of billions of so-called "stimulus" money that fattened the wallets of overpaid and underworked government workers represented by the Association of Federal. State, County and Municipal Employees (AFSCME), as well as vast sums deposited into the accounts of teachers' unions and those of its members. All money we, the taxpayers, will end up paying.

Foreign policy relationships are cast asunder because free trade agreements are sabotaged on behalf of domestic unions.

Talk about a union shop!

This administration came into office with an agenda that divided us into two camps: their allies and their enemies (ironic for a man made famous for a speech decrying divisions in America). Money would be redistributed from the latter to the former (for example, Chrysler creditors to auto unions). This is Crook County politics inflicted upon the nation as a whole, led by a bully in the Oval Office.

This is ,as Michael Barone characterized it, gangster government. When businesses (and people) feel the fruits of their labor are going to be confiscated by the grasping hands of Obama, Pelosi, and Reid they just will not work and will not hire others to work for them. Hence, stagnation-and high unemployment numbers as far as the eye can see-or at least until we take back the reins of government.

Yep. While it may be painful in the short term, the law of competitive advantage has always worked in the past. One reason is because the cost of doing business in one part of the world is independent from other areas, enabling the free flow of work to the region that can do the job at the lowest cost. But minimum wage (along with unions) act to artificially constrain wages within the US, leaving offshoring as a more viable option. When I worked for a major fortune 50 corporation it was commonly known that no new plants or even engineering or business operations would be built or relocated in “high cost regions” such as the US. The minimum wage minimizes the potential for any part of this country to differentiate itself on the basis of wage cost.

And now Wal-Mart has even sold out to the Daley-Chicago machine, agreeing to pay higher-than-minimum-wage rates even though people were willing to take the jobs for less.

I saw Rep. Bilbrey from California on Chwissy Mathews last night.

He attacked Democrats specifically and unions implicitly as well as any Republican that I have seen.

I have grown weary of the debate on the Arizona immigration law, hopefully the courts hand Barry a loss as it did with the oil drilling moratorium.

Bilbrey kept pounding even though Chrwissy tried to ridicule him and change the subject.

Bilbrey an opponent of Baby Bush, Juan McCain, and Teddy Kennedy’s amnesty scheme, realized that there were many in Republican establishment who favored ILLEGAL employers and were supported by the National Chamber of Commerce.

He now is asking why aren’t Democrats and unions aren’t going after illegal employers.

He was in effect saying that being anti-business was the nature of Democrats and unions and why weren’t they going after business when they were breaking the law?

I know some white men who are in unions and they vote Democrat out of their own self interest, but I KNOW they were against NAFTA and they are opposed to AMNESTY and they understand that illegals do not help the job market for non-union and union alike.

As a conservative, I have always believed in the rule of law and I have always been upset at Republicans timidity at not going after illegal employers.

Bilbrey makes an excellent point. Illegal employers got a pass under most previous admininistration including Baby Bush’s.

But there seems to be little difference under a pro business Republican and an anti-business Barry administrations.

And the dirtiest secret of all, the union BOSSES are selling out their membership as they always do, when it comes to justice for the working man.

And justice for the working man and EVERY American is the enforcement of laws against ILLEGAL EMPLOYERS.

Closing the border will the keep out lots of illegals.

Shutting down illegal employers will send them back to that rat hole of a country Mexico.

RE :”Those want more unionization claim it is necessary to raise wages. Instead it will further depress the economy. My research suggests that if unionization rates returned to 1970s levels (roughly in the mid 20% range of the private work force), and if new unions could achieve the same wage premium as existing unions have achieved over nonunion workplaces, then employment could decline by about 4.5 million and real GDP could fall by about $500 billion per year....Why? Unions raise members’ wages by restricting competition, much as a business monopoly raises prices by restricting competition. “

I see union leaders on FNC Cavuto and MSNBC claim that unions will solve our nation's economic problems by raising workers salaries so they can spend money to jump-start the economy. Once again Keynesian redistribution ‘create demand’ theory. They also falsely claim that their raises and benefits go to unrelated non-union workers. Of course businesses simply move jobs to non-union regions (if they can) to control costs and so the unions want to stop us by federal law from buying foreign non-union products.

The union endgame is clear now. They bankrupted GM and then demanded the federal taxpayers fund them in bailouts. And yes, Bush jumped into GM just before leaving office giving Obama another opening. Now democrats will have the UAW on the public dole forever. Look how well that helped create NEW jobs.

Given that nonunion auto-companies survived without the handouts union auto companies got, Republicans need to oppose any unionization measures.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.