Big Labor is in Crisis – and that’s not a bad thing

Written by . Posted in 2014 Campaigns, Issue Watch

Published on September 02, 2013


A guest contribution by Brady Cremeens

After Governor Scott Walker reformed Wisconsin’s public employee union laws in 2011 — among other things, essentially affording public employees in America’s Dairyland the benefits of right-to-work — union membership there dropped dramatically. The state’s second-largest union, American Federation of State, County, and Municipal Employees, saw its membership fall by more than half to less than 30,000 from nearly 63,000 over the course of just a few months.

Once the heaviest unionized state in the nation, Michigan is the newest to join the ranks in granting a worker his right to choose. Even in the year before the state’s right-to-work law passed, unions lost 42,000 members. Nationwide, from 1948 to 2010, the unionized share of all American union workers fell from 32 percent to less than 12 percent.

When given the option to reject union membership, workers tend to do so in droves. In the private sector, at least, the allure of Big Labor is dead.

Conservatives cheer these statistics. In their view, the decline of Big Labor represents a shift to a more American approach to economic freedom – for both the employer and employee. Union-free labor begets merit-based pay, which incentivizes the worker to do his job well, and the employers to compensate him appropriately or risk losing him to a competitor. It also allows quality workers to separate themselves from poor performers, and shirk the shackles of uniform wage rates.

The thoughtful critic understands that the crux of the labor debate hinges on the ability of unions to bargain collectively. This is the most critical power of organized labor.

At the birth of the Industrial Revolution, organized labor arose out of necessity. Back then, its leaders fought for the most basic humane treatment for factory workers – shortening brutal 16 hour work days, lobbying for laws against forced child labor, and ensuring employees received some semblance of fair and equal treatment. The organizers negotiated with the bosses on behalf of the workers – many of whom were immigrants who spoke little English – because they could not do so for themselves. Most were poor, had little to no education, and couldn’t speak out for fear of losing their job, a price they couldn’t afford to pay.

Collective bargaining is the most crucial component of organized labor’s rise to prominence – but it isn’t necessarily a sound argument for its continued practice. For whatever purpose unions may have served 200 years ago, their benefit has long since run its course. In many cases, the need for a union has been replaced by government-imposed requirements designed to improve safety and fairness for workers even in non-union workplaces.

Labor laws aren’t the only things affecting jobs numbers and wage rates, but it is no coincidence that the combined unemployment levels of right-to-work states are more than 1.5 percentage points lower than forced-membership states. It’s further telling that seven of the 10 highest wage rate states are right-to-work.

Since 1980, right-to-work states saw their overall employment levels rise by 71%, a full 39 points higher than in non-right-to-work-states. In that same period, average wages grew four times as fast in right-to-work states. Shrink that time frame down to 2002-2011 – a period which includes the so-called Great Recession – and right-to-work states enjoyed an employment increase of 4.5 percent while the number of jobs fell 1.2 percent in other states. The ten worst states in which to start and conduct business, according to Chief Executive Magazine, are all forced-union states.

The reason for this is not an economic mystery. The boom in production enabled by escaping union work-rules allow employers to raise wages, partially to keep from losing their best talent to competitors. The opposite is true as well. The short-term collective gains won by unionized workers are eventually negated by productivity losses and the ensuing job and wage cuts.

Frequently, the burdens that unions impose — often through work rules and benefits more than wages — render their hosts unable to compete in an increasingly expanded marketplace. Union collectivism may well enough suffice when it has its grips on the only show in town, but is steamrolled time and again by freer minds and freer workers. This happened when Detroit, finally pushed into competition from emerging foreign competition that had been suppressed by a destructive world war, slowly lost its competitive edge.

In short, labor free of the requirements unions levy on employers is rewarded with an expanded job market and higher average pay. Aside from the union bosses and the Democratic politicians they help elect, it’s a win for everyone.