I would think that unions, by raising earnings for their workers, also raise earnings for non-union workers, contrary to what you say. Union workers with high earnings are removed from the competitive labor market. Also, employers of non-union employees can afford to pay only slightly less than union wages and still maintain a competitive advantage over their unionized competitors. The net effect is to diminish profits and transfer wealth to the unionized worker. The cost to the non-unionized worker is not in diminished earnings but in the higher price for goods produced in industries with unionized labor.

I would think that unions, by raising earnings for their workers, also raise earnings for non-union workers, contrary to what you say. Union workers with high earnings are removed from the competitive labor market. Also, employers of non-union employees can afford to pay only slightly less than union wages and still maintain a competitive advantage over their unionized competitors. The net effect is to diminish profits and transfer wealth to the unionized worker. The cost to the non-unionized worker is not in diminished earnings but in the higher price for goods produced in industries with unionized labor.

Good god! Becker too? Ahh yes indeedy "The forces I discussed earlier that contributed to the decline of unions in the US are very powerful, they will continue to operate, and they are extremely difficult to reverse."

........... Like the Walmart heirs who had enough clout to change the estate tax laws while inheriting the most profitable company in history (sans a brief oil company windfall) while paying their "associates" so little that taxpayers chip in an extra billion per year in food stamps, low cost housing, and medical care. Well, as Becker laments, they may well NOT be as powerful in the new Congress or with the new admin. For the future of our nation let's hope so.

Good god! Becker too? Ahh yes indeedy "The forces I discussed earlier that contributed to the decline of unions in the US are very powerful, they will continue to operate, and they are extremely difficult to reverse."

........... Like the Walmart heirs who had enough clout to change the estate tax laws while inheriting the most profitable company in history (sans a brief oil company windfall) while paying their "associates" so little that taxpayers chip in an extra billion per year in food stamps, low cost housing, and medical care. Well, as Becker laments, they may well NOT be as powerful in the new Congress or with the new admin. For the future of our nation let's hope so.

Good god! Becker too? Ahh yes indeedy "The forces I discussed earlier that contributed to the decline of unions in the US are very powerful, they will continue to operate, and they are extremely difficult to reverse."

........... Like the Walmart heirs who had enough clout to change the estate tax laws while inheriting the most profitable company in history (sans a brief oil company windfall) while paying their "associates" so little that taxpayers chip in an extra billion per year in food stamps, low cost housing, and medical care. Well, as Becker laments, they may well NOT be as powerful in the new Congress or with the new admin. For the future of our nation let's hope so.

I realize this is just a blog post, but this is a really on overly (ideologically) convenient and superficial analysis of these issues.

It is not at all clear from your simple use of Econ 101 principles that unions "harm the American economy". On the contrary, a unionized labor force may be more productive (healthier, happier, etc.) per dollar spent on wages.

Even if it's true than in an economy with both union and non-union firms the latter are more competitive, it does not follow that if unions disappear entirely everyone will be better off.

Your brief analysis of the EFCA is similarly shallow and facile. The current union election system is entirely distorted by powerful employers. While card-check carries its own problems, an intelligent analysis would weigh each against each other.

Several of the other posters point to the fact that the conclusion Becker arrives at, is in fact not so obvious as the blog post concludes. One example of empirical data to the contrary is the State of Denmark.

Its one of the most highly unionized countries in the EU or the world, with almost 80 pct of the labour forced organized in unions across all types of labour, from lawyers to steel factory workers. Denmark is also among the top economic performers in europe, with a positive trade balance, 1,7 pct unemployment rate, and the most content workers in the EU according to eurobarometer.

Danish unions emphasise employer paid education of workers as one of their main goals, as well as decent pay and health at work. Therefore danish workers are highly educated, with a much larger output pr employee than the average american worker, better health at retirement, and have a willingness to quickly adopt to new conditions, like a more capital intensive production. Danish unions helped build the economic success that the country is experiencing today, by making the work force competitive by increasing output pr worker and being proactive in the face of cheaper foreign competition. I would say that unions certainly still have a role to play.

The reason why American unions are so much less successful, is because of their “French”style. Instead of working constructively with employers, they are always against change, and appeal to politicians for actions instead of negotiating with employers for fair and reasonable agreements. It resembles the French unions way of just shutting society down, if they dont get what they want, only the American unions have so little power in comparison.

I agree with Dr. Becker’s comments about unions seeking monopoly power. I think it’s instructive to look at an example of an entity that has had a monopoly on selling services to the public, in the way that unions have a monopoly in selling labor services to some employers.

The U.S. Postal Service has a government-enforced monopoly on some types of delivery services. Some of us are of the opinion that its monopoly status is fully reflected in the quality of its services.

No one can compete head-on with USPS. But pent-up demand for better delivery services has further spurred the development of alternatives such as email and electronic payments. Those have largely replaced traditional mail for the purposes for which individuals formerly used it. And Federal Express and others have taken over the deliver of larger packages.

Those developments are analogous to the alternatives that car buyers have found, to get around the UAW monopoly, including buying cars made outside the U.S., and those made in non-unionized American factories.

It’s very difficult to maintain artificial restraints on market forces in the long run.

I agree with Dr. Becker’s comments about unions seeking monopoly power. I think it’s instructive to look at an example of an entity that has had a monopoly on selling services to the public, in the way that unions have a monopoly in selling labor services to some employers.

The U.S. Postal Service has a government-enforced monopoly on some types of delivery services. Some of us are of the opinion that its monopoly status is fully reflected in the quality of its services.

No one can compete head-on with USPS. But pent-up demand for better delivery services has further spurred the development of alternatives such as email and electronic payments. Those have largely replaced traditional mail for the purposes for which individuals formerly used it. And Federal Express and others have taken over the deliver of larger packages.

Those developments are analogous to the alternatives that car buyers have found, to get around the UAW monopoly, including buying cars made outside the U.S., and those made in non-unionized American factories.

It’s very difficult to maintain artificial restraints on market forces in the long run.

"The reason why American unions are so much less successful, is because of their “French”style."
How can union in USA could be like in France, they are obvisoulsy English style ?
By the way in France 3% of workers belong to Union in private sector.

Regional Unions having problems? Imagine that! Unions in the U.S. had problems until the Courts decriminalized Unionizing and those said Unions grew by leaps and bounds. Until various Courts and Legislatures passed and supported "Right to Work" laws or outright banned unionizing. Putting a damper on unionizing.

Are we now back to the days of, "Workers of the World Unite"! "You have nothing to lose but your chains"!

If the World believes in "Free Markets/Free Trade" it also means it needs to recognize the Right of the Worker to "FREELY Organize and Unionize" in their own self Interest.

@Olavg

There is a lot to admire about Denmark, but it is not correct that they are more productive than US workers, who still lead the world in productivity.

See, e.g., the ILO report here - http://tinyurl.com/2ppzhn

do those productivity numbers count the investment banks as having produced some absurd amount of money rather than destroying it?

Richard sez: "I agree with Dr. Becker’s comments about unions seeking monopoly power."

........... but the unions and collective bargaining arose because without the unions it was the companies that sought and maintain monopoly power.

Need we more examples than Walmart? A company that to its credit developed a very productive distribution network, enjoys one of the fattest bottom lines in history, yet pays there hard working "associates" so little that Unc Sam must supplement Walmart's miserly pay with over a billion/year in housing subsidies, Earned income credits, food stamps and H/C.

Peter: It's interesting to note that after adjusting for the fewer hours worked that the French worker produces more than does the US worker. Amazing, eh? with their having something of a worn out country by comparison to the rich natural resources of the US. Instead of the traditional chest thumping its time for America to take a close look at why it's doing so poorly by comparison to countries whose economic assets are much poorer than ours.

Richard sez: "I agree with Dr. Becker’s comments about unions seeking monopoly power."

........... but the unions and collective bargaining arose because without the unions it was the companies that sought and maintain monopoly power.

Need we more examples than Walmart? A company that to its credit developed a very productive distribution network, enjoys one of the fattest bottom lines in history, yet pays there hard working "associates" so little that Unc Sam must supplement Walmart's miserly pay with over a billion/year in housing subsidies, Earned income credits, food stamps and H/C.

Peter: It's interesting to note that after adjusting for the fewer hours worked that the French worker produces more than does the US worker. Amazing, eh? with their having something of a worn out country by comparison to the rich natural resources of the US. Instead of the traditional chest thumping its time for America to take a close look at why it's doing so poorly by comparison to countries whose economic assets are much poorer than ours.

Unc Sam must supplement Walmart's miserly pay with over a billion/year in housing subsidies, Earned income credits, food stamps and H/C.

In my opinion, that's not a bad thing. It's generally less expensive for government to top up the incomes of the working poor, than for government to restrict the setting of wage rates by supply and demand.

If public assistance is eliminated, or substantially reduced, when the recipient takes a job, that is, in effect, a high rate of tax on their newly-earned income.

Ideally, public assistance should be structured so that a recipient is not penalized for taking an entry-level job. That is not as easy as it might sound, but it should be a public policy goal.

Igor Panerin, a respected Russian political scientist and former KGB analyst, has been predicting the economic collapse and de-federation of the United States by the end of 2010. His predictions are based on modeling with the main funtional dependencies being the collapse of the (worthless) dollar, the loss of individual assets, bankrupt states asking a bankrupt federal government for worthless dollars and increasing moral decay.

Before you sneer, might I suggest you google him.

And we are worrying about the unions?

Before taking Panerin seriously, Jim, please get up off the sofa, kick the empty pizza delivery boxes out of the way, step out of your front door, and say hello to America. Should you decide to move off your doorstep, visit your local library and read about American history, 1855-1865.

thanks

very very good

thanks

very very good

Jake, do you mean that period of de-federation when there were two separate currencies, two separate cultures, two separate trading systems, two separate governments, two separate armies and from which ole Abe was murdered and from which there are still hard feelings. Great!!! I am really looking foreward to a repeat of that. I might be missing your point. The United States is a completely different animal now; divided in any one of a number of ways and should disaster strike, I seriously doubt its ability to recover. But maybe the unions will survive and help us out.

Btw, I will make sur to hire a union person to clean up the pizza boxes. Thanks for the suggestion.

Áûëî áû èíòåðåñíî óçíàòü ïîïîäðîáíåå

Jim, Just as all humans are born to die; so States grow, reach maturity, decline, then die.
The Panerin analysis closely shadows Eddie Gibbon's analysis of the Roman Empire which reached it's zenith in the Antonine dynasty and then declined and died, but it took some three hundred years.

I think we're flexible enough to last some four or five hundred. And in my case, another fifty years or so, who cares!

Jim, Just as all humans are born to die; so States grow, reach maturity, decline, then die.
The Panerin analysis closely shadows Eddie Gibbon's analysis of the Roman Empire which reached it's zenith in the Antonine dynasty and then declined and died, but it took some three hundred years.

I think we're flexible enough to last some four or five hundred. And in my case, another fifty years or so, who cares!

Richard: Perhaps we need to look more closely into the example of Walmart. For one it HAS one of the fattest bottom line profits the world has ever seen.

You make the case that created the Earned Income Tax Credit and many other low wage subsidies well.

However, what ARE we doing here? Do we no longer believe in capitalism as that efficient "invisible hand" that directs productive resources to those companies that use them most efficiently and productively??

Often in my travels I drive past a McD's, a Taco Bell and a Wendy's on my way to a small, locally owned cafe at which the the people working there earn enough that they don't qualify for low wage subsidies. Now, why, I wonder, am I as a taxpayer subsidizing McD's and Walmart to the disadvantage of the places I choose to reward with my business? So, Walmart with it's billion buck wage subsidy CAN come in a bulldoze local businesses that WERE paying a living wage? And their owners were pillars of the community?

You see the stone truth IS and you can find it in chapter six of most Intro to Econ texts, is that "supply and demand" does not accurately set wages in the lower quartiles, for the reason that organized capital is FAR stronger than an individual coming in to escape being one of the one in ten who is completely unemployed and must accept what is offered. "Go down the street?" Same story. That IS why unions and collective bargaining came about.

Oh! and as we've recently had confirmed (in spades!) wages are not set accurately by "supply and demand" at the top levels either. CEO pay has soared from 50 times worker pay circa 1980 to over 400 times today. Is that possible to explain by any "supply and demand" model? Has the pay selected the best in terms of excellence? and or ethical behavior? Protected the long term future of the company, its products and position in the world market?

Lastly? Were companies unwilling to pay the costs of their rent, vehicles they "need?" would you be as willing to pony up taxpayer's money to make ends meet?

Neil, Hi! and dare we hope that a sustainable economy that doesn't destroy the environment is possible?

I tend to believe I have a wider rangeof acquaintances than most of you.(on the other hand,i recall an 18 yo girl who said,"I'm unusually mature for an 18 yo.)Still,I've worked in UAW forges and non union shops.A little economics.I think unions can do a god job of raising wages for their members in the absence of externalized competition.As long as capital/skill barriers prevented US consumers from foreign competition,things were fine.Still,when external competition does arise,the companies are like 'water empires' and extremely vulnerable.And,yes,like so many others ,I was told to 'slow down' in the UAW shop.So,I see no chance thje big three can survive,though maybe Ford has a chance
Jack, My office mgrs husband is a driver for WM.He makes low 6 figures.WM has catastrophic insurance for its employees after 6 months.Many of my patients are able to afford very,very good medications because of its $4 drug program.And please give an accounting of WM's % profit.I know Microsoft is 28: Exxons was 7-8.What is WM's ,and what is acceptable to you?

I tend to believe I have a wider rangeof acquaintances than most of you.(on the other hand,i recall an 18 yo girl who said,"I'm unusually mature for an 18 yo.)Still,I've worked in UAW forges and non union shops.A little economics.I think unions can do a god job of raising wages for their members in the absence of externalized competition.As long as capital/skill barriers prevented US consumers from foreign competition,things were fine.Still,when external competition does arise,the companies are like 'water empires' and extremely vulnerable.And,yes,like so many others ,I was told to 'slow down' in the UAW shop.So,I see no chance thje big three can survive,though maybe Ford has a chance
Jack, My office mgrs husband is a driver for WM.He makes low 6 figures.WM has catastrophic insurance for its employees after 6 months.Many of my patients are able to afford very,very good medications because of its $4 drug program.And please give an accounting of WM's % profit.I know Microsoft is 28: Exxons was 7-8.What is WM's ,and what is acceptable to you?

I am amazed with it. It is a good thing for my research. Thanks

"Richard: Perhaps we need to look more closely into the example of Walmart. For one it HAS one of the fattest bottom line profits the world has ever seen."

It also has profit margins that are consistently very low. Wal-Mart's successes are based on their appeal to consumers of all walks of life. That appeal is based almost solely on the fact that they offer a greater level of value capture to consumers. In other words, their business model involves taking smaller profits, and giving more value to the consumer. If instead of offering it to consumers they gave it to workers, there would be less incentive for consumers to shop at Wal Mart. As a consumers, I don't give a shit how the money I use to purchase a good or service is divvied up. Whether it all goes to labor or capital, my primary concern is getting the most value for my dollar.

In short, if Wal Mart were to increase the wages they pay, they would also have to increase the prices they charge consumers, which would reduce demand for Wal Mart, which would decrease the demand for Wal Mart employees. Perhaps you prefer non-working poor to working poor. I do not. I expect Wal mart employees do not either.

"You see the stone truth IS and you can find it in chapter six of most Intro to Econ texts, is that "supply and demand" does not accurately set wages in the lower quartiles, for the reason that organized capital is FAR stronger than an individual coming in to escape being one of the one in ten who is completely unemployed and must accept what is offered."

Uh, no. Chapter six of any econ text would tell you that as competition increases, pricing power is reduced. Since most low wage workers are unskilled or low skilled, the operate in a market that includes every able bodied person, (after all, we are all full qualified unskilled workers) and is very competitive. Chapter six would also tell you that in a perfectly competitive market profits would be zero. labor doesn't earn profits, but we can naturally assume that wages would be driven down to a level that was tangent to the cost of survival. Of course wages or transfer payments will always be far more than necessary to cover the cost of survival.

The notion that "big capital" drives down the wages of low skilled workers is a fun post-marxian conspiracy, but nothing more. After all, if "big capital" was going to drive down wages for low skilled labor, then why not for high skilled labor as well? A rational shareholder would want to pay all employees as little as they could while still getting the job done, be they the copy boy or the CEO.

"Oh! and as we've recently had confirmed (in spades!) wages are not set accurately by "supply and demand" at the top levels either. CEO pay has soared from 50 times worker pay circa 1980 to over 400 times today."

The economist just published a list of young economists that they predicted would be the next crop of Beckers and Friedmanns. One of them did work on CEO wages and found that, as the competition for competent leaders has increased among firms, they have become increasingly willing to pay higher salaries for CEOs that are only slightly better. A CEO that is perceived as being 5% more effective than his competition may recieve 50% more in remuneration. But even if that's not the case, the labor market for CEOs is much less competitive, which allows them greater pricing power. The shareholders could just grab a dude off the factory floor and appoint him chief, avioding high CEO pay, but the results would probably not be favorable.

REMEMBER WORLD WAR 2? who did America & the World turn to in that time when Japan & Germany were murdering millions of people in the world - The WORLD turned to the Americans for help and how did America help win the war against Japan - I'll tell you who it was, The Big 3 Auto Companies that’s who- FORD - GM & CHRYSLER - they rebuilt and retooled all their factories and plants so that they could build Tanks - and Jeeps and Trucks and Troop Carriers -Boat Guns and Ship Artillery Cannons - and many types of Weapons and other Equipment - Do you think that when World War 3 comes that Japan and other companies will retool their factories to help America –
NO THEY WILL NOT.

After 9/11 in New York, Who was it that gave 10 million dollars each? There was only 3 companies that gave that much and guess what else they gave? They gave Fleets of Cars and Trucks / SUVs’ and Building Spaces - It was the Big 3 –FORD -GM & Chrysler that’s who it was - I'll tell you who else gave, it was USA Harley Davidson Motorcycles they gave 1 million dollars and a fleet of new Motorcycles for N.Y. Police Department - and with all that giving during one of our nations darkest time- Honda & Toyota and all the other foreign car companies DID NOT GIVE ONE PENNY to the people of the United States of America for 9/11 or Hurricane Katrina. Ford- GM & Chrysler Did. The Big 3 helped Americans thru the bad times and tough times by giving, so we, America should show our support by helping them, by buying their products that in return supports OUR NATION and the AMERICAN PEOPLE who are Patriotic to this GREAT Nation.

Do real Patriotic Americans want to see our U.S. Companies that provides 4-5 million people with daily jobs IN ALL 52 States Fail? and lose their jobs & pensions and retirements – How would you like to have worked for 30 yrs or more busting your back on the assembly lines, and after 30 + yrs have the pains and damages of working so hard every day, Arms and Fingers going numb, and all your joints and legs and backs hurting and can’t sleep due to body pains – Then lose your home, lose your car and all your furniture and belongings? Does America really understand how hard these people work building these vehicles and parts – I really don’t think they understand, maybe the Southern States in the south that are non-union – Oh, and by the way the UAW new Contract states that new hired people only make $14 per hour for the Big 3 - $15 bucks less than the Japanese plants. Japanese workers make $30 per hour, they just have fewer benefits and less people that are retired in the United States – but 10 yrs from now they will be in the same situation as Ford, Gm & Chrysler with more retired workers. Then the playing field will become more even. Now Congress wants to take more from the UAW workers, U.S. Workers only make up 9% of the cost of the cars or trucks, IF, EVERY True American bought a FORD-GM-CHRYSLER vehicle then all the problems would be gone, and the world would be talking about Japans-Korea’s-& Taiwan car makers in trouble, not the BIG 3.

American BIG 3 Car Makers are building World Class Cars for the World, and The BIG 3 will prove it to the World by doing so, Are So-Called Americans- from States that have Foreign car plants so Anti-American that they would choose to let U.S. American jobs fail and go out of business and put around 4-5 million people out of work nation wide, what has become of True Patriotic Americans that support American jobs, by choosing a Car or a Truck or other American made U.S. products from the United States that in return helps the economy in all 52 states. Why have some of our leaders that we voted in
Turned against the American worker – What has happen to our once great leaders that America needs, where are they? We need Leaders that are for the workers – we need Leaders that will bring manufacturing jobs back to the United States of America.

America can not stand for this anymore, We the People of The Untied States of America must fight back against these foreign companies and start manufacturing our own products to sell to the world and provide better jobs and better wages for all of Americans, we must do this not only for ourselves, but we must do this for our children, and our grandchildren and their children for 100’s of years to comes, America must WAKE UP and open it’s eyes to what is happening to American manufacturing jobs, we must act now by supporting All American U.S. companies like FORD–GM & Chrysler.

Americans can pull together and we can be the Super Power of the world that the World knows us as, not all Americans can go to college, that's just the way things go for many Americans. So, what’s wrong with making a living busting your back in a factory, or on a assembly line making parts or building cars, making a good wage with benefits to have a decent life, with a simple home and a simple life - that’s the American Dream - and WE, as Americans need to believe in that dream again by Buying American Cars and Trucks and other American made products that supports our country The United States of America - not JAPAN - not CHINA – or Mexico or other nations.

In Closing we have to do it for our Children, and our Grand Children and our pensions and their retirements and their pensions and theirs lives, WE must BELIEVE in America - We have to believe in ourselves again by acting on that Hope by buying American made Products.

IN GOD WE TRUST - Michael W. Rucker – UAW assembly line worker for 22 yrs 2009

I think your blog need a new wordpress template. Downalod it from http://genericwpthemes.com . The site has nice and unique wordpress templates.

دردشة صوتية

دردشة صوتية

شات صوتي

I must say that you provide genuine, quality information. Thanks for this!

BTW, dpn't you think your blog needs a better wordpress template?

You will see more of that in future years. Global warming entails more variable weather. More variable weather almost certainly entails more and more unseasonable weather. More unseasonable weather will depress crop yields below expectations until expectations catch up with the climate.

China printing

"These powerful forces aligned against unions imply that the UAW and other large manufacturing unions are essentially finished, perhaps unless they receive major financial and regulatory support from the federal government." http://www.vxcb.com I agree with Dr. Becker’s comments about unions seeking monopoly power.

Good god! Becker too? Ahh yes indeedy "The forces I discussed earlier that contributed to the decline of unions in the US are very powerful, they will continue to operate, and they are extremely difficult to reverse."

tahanks

Thanks for the article !

Thanks !

Great article.

I'm ok with you thanks for sharing

thanks
دردشة.