There’s A Reason Why Support for Unions Has Declined

We will know at the end of the day whether labor unions in Wisconsin succeed in their effort to oust Governor Scott Walker.  But the debate about the role of unions—particularly public-sector government-worker unions—is just beginning.

And it’s an important one to have. 

States and localities are facing enormous budget challenges, in part because of high labor costs, particularly costs for pensions and retirement health care benefits that have been promised to government workers.  Citizens just about everywhere are going to have to figure out what they think is fair in terms of how to address those obligations.  

Certainly it’s unfair for hardworking public servants to see a reduction in benefits that they were promised, but it’s also unfair for taxpayers to have to pay for super-sized benefit packages that were negotiated by union bosses and the politicians beholden to those union bosses, who had no plan for paying for those benefits, beyond passing the bill to the next generation. Compromises will have to be made, and—just as importantly—citizens should consider if the system that lead to this mess, which has allowed negotiations to occur between parties that are essentially on the same side of the table, are really the best idea for the future. 

The New York Times’s columnist Joe Nocera writes today makes the case for more powerful unions, by highlighting how the reduction in unionization has occurred in concert with the growth in the gap between the rich and the poor.  In an attempt to not sound like a union-shill, he notes some of labor unions excesses—things like the benefit packages that are now pushing many states and localities toward bankruptcy. 

Yet he misses much of the backdrop for why private-sector unions have declined and left the inherently more corrupt public-sector as the primary union stronghold.  Private sector unionization has declined because our economy has become much more competitive in recent decades.  Auto manufactures, for example, with much higher labor costs due to unionization simply couldn’t compete (at least without massive government bailouts) with overseas manufacturers.

Governments don’t go out of business like companies with too high labor costs do.  Generally speaking, they can just jack up taxes so they can over-pay government employees.  And for the most part, smart politicians figured out a better way to please their union patrons without having to ask more of current taxpayers.  Instead of paying union workers big salaries, they promised them big benefits in the future. And those politicians were content to consider it the next guy’s problem to figure out for how to pay for those deals. 

Now, current citizens are increasing that “next guy” which is why many are frustrated with unions.

The Wall Street Journal also features an article on how teachers’ unions have been losing support, among the general public but also most tellingly among teachers themselves.  When it comes to education, this debate isn’t just about money.  Americans are increasingly aware that teacher unions fight needed education reform and push policies that protect the jobs of teachers, even bad ones, making it impossible to fire incompetent teachers or reward teachers who excel.  This is at least part of the reason that our schools are so inefficient—costly a bundle while provider a meager education—and why Americans are increasingly dissatisfied with the status quo.

There is a role for unions in the economy and in negotiating fair treatment for workers.  However there are really reasons why unionization—and the reputation of unions—has been in decline.