The Truth About Unions

While unions continue to dominate the news, I figured I would give you a few little facts I found from the Heritage Foundation. Take these facts, absorb them and continue to ask yourself …. are unions making a positive impact on our economy? I’ll bet you can already answer that question. But here are some specifics to fill in the blanks.

* Unions function as labor cartels. A labor cartel restricts the number of workers in a company or industry to drive up the remaining workers’ wages, just as the Organization of Petroleum Exporting Countries (OPEC) attempts to cut the supply of oil to raise its price. Companies pass on those higher wages to consumers through higher prices, and often they also earn lower profits. Economic research finds that unions benefit their members but hurt consumers generally, and especially workers who are denied job opportunities.

* Economists consistently find that unions decrease the number of jobs available in the economy. The vast majority of manufacturing jobs lost over the past three decades have been among union members–non-union manufacturing employment has risen. Research also shows that widespread unionization delays recovery from economic downturns.

* Some unions win higher wages for their members, though many do not. But with these higher wages, unions bring less investment, fewer jobs, higher prices, and smaller 401(k) plans for everyone else. On balance, labor cartels harm the economy, and enacting policies designed to force workers into unions will only prolong the recession.

* Studies typically find that unionized companies earn profits between 10 percent and 15 percent lower than those of comparable non-union firms. Unlike the findings with respect to wage effects, the research shows unambiguously that unions directly cause lower profits. Profits drop at companies whose unions win certification elections but remain at normal levels for non-union firms. One recent study found that shareholder returns fall by 10 percent over two years at companies where unions win certification.

* In essence, unions “tax” investments that corporations make, redistributing part of the return from these investments to their members. This makes undertaking a new investment less worthwhile. Companies respond to the union tax in the same way they respond to government taxes on investment–by investing less. By cutting profits, unions also reduce the money that firms have available for new investments, so they also indirectly reduce investment.

* Research shows that unions directly cause firms to reduce their investments. In fact, investment drops sharply after unions organize a company. One study found that unionizing reduces capital investment by 30 percent–the same effect as a 33 percentage point increase in the corporate tax rate.

* Economists have found that unions delay economic recoveries. States with more union members took considerably longer than those with fewer union members to recover from the 1982 and 1991 recessions.

Now imagine if our government – state and federal – were forced to run like a business, without its unique ability to levy and collect taxes …… me thinks our country would have gone Tango Uniform ages ago.

Author: AKA John Galt

A small business owner, a tea party organizer, a son, father and husband who is not willing to sell out the future lives of his children.

2 thoughts on “The Truth About Unions”

  1. I am and have been a union worker for many years. I have much to say about unions but foremost they are in it for themselves. I was working a non-union job making good money and when the company wanted me to travel for a project they took care of it. I mean they paid for my food, lodging and travel. The union officials were able to find I was a licensed electrician and they also found my address. They hounded me for a couple of years and when I finally agreed to hear what they had to say they promised me some good things but didn’t deliver.

    I was traveling so much with my non-union job and my kids were young so I told them I didn’t want to travel so much. “well, we have work right here for the next 10 years” I was told. I worked 18 months and have been traveling since. The difference is that now everything is out of my pocket. The system works like this, every local has book1 and book2. When a local needs help you can go and sign book2. If they get to you then you can go to work. The problem is that you have to initially go there in person and sign. Then come the conditions that seem to increase every year. You have to be licensed in that state and you have to pay for this yourself. There is a long list of conditions that have to be met. You would think that the local you belong to could just let you know when there is work in other areas but finding a job is on you. If you are already broke how do they expect you to travel and wait for a job that may not even be there or doesn’t even cover your travel expenses? They do make sure to collect their money in the event you do get a job. The union will take 4-8% of every dollar you make and you still have to pay your local dues regardless.

    I have a retirement and 401k that is just sitting there. Even though I have not worked in nearly 2 years now I can’t even borrow my own money. This is not union money it is my money. There has been no matching of dollars everything I have in there is mine. I have lost both my cars and nearly lost my house yet they won’t let me have one cent of my own money. The union officials by the way are doing very well. How come their incomes are not investigated. I just know that when Bush was in office I could travel, at my own expense, anywhere in the US and go right to work. So, can anyone tell me how being part of this union is worth anything?

  2. You’re lucky… I was forced to pay Teamsters dues, which were 18% of my paycheck – more than federal, state, and local taxes combined.

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