The World Affairs Discussion Group Message Board › Do labor unions contribute to unemployment?
|John Van P.||
At the group's meeting on April 12 we touched on the topic of labor unions. The majority seemed at least cautiously supportive of unions.
I would like to suggest that labor unions may contribute to unemployment. How can this be?
I assume that labor unions support the following:
higher wages for their members;
making it harder for employers to fire workers;
a higher minimum wage.
Let's look at the effect of each policy.
If employers must pay unionized workers more than they otherwise would, they have an incentive to replace workers with machines or to ship work to lower wage regions of the world. Some projects that might be economically feasible at one wage rate might be unfeasible at a higher wage rate and just not get done.
The harder it is to fire workers the more cautious employers will be about hiring in the first place. This is why Europe has sky-high rates of unemployment. Furthermore, during an economic downturn, marginal employers, if they cannot fire selected workers quickly, may fail, causing their entire workforce to become unemployed.
A minimum wage may make it uneconomical for employers to hire unskilled and entry level workers. These people, who desperately need some work experience to gain traction as workers, may be prevented from obtaining it.
Edited by John Van Praag on Apr 14, 2009 3:25 PM
San Diego, CA
I just finished reading "Civil Rights Unionism" by Robert Korstad. It's about the labor and civil rights movement of black tobacco workers in the 1940s. Back then, workers (especially blacks and poor whites) were mistreated by employers. Eventually, unions were created and they improved working conditions. However, today, unions are becoming more and more harmful. Before, they used to protect the average worker. Today, they protect the worst workers. By making it hard to fire a substandard worker, unions have hurt productivity, rewarded failure, set a bad example, and sapped the motivation and morale of good workers. The worst unions are teachers' unions. They say they're mission is to ensure that students receive a quality education, but in reality it's to ensure their job security. Once they're tenured, it can be almost impossible to fire a bad teacher. I support merit pay, school choice, and school vouchers. All of these programs would improve our lagging educational system. Teachers unions oppose all of them. Teachers' unions, along with some other unions, value job security over doing a good job. I agree with all of John's reasons why unions are counterproductive (e.g. artificially inflates the minimum wage, makes it harder to fire bad workers, gives companies incentives to automate). Unions have worn out their welcome. Unions are another example of a good thing gone bad.