Saturday, February 26, 2011

Republicans Wrong in Wisconsin?

Watching coverage of the demonstrations in Madison, Wisconsin one would think thousands of hard working Americans are being battered by Republican proposals to put restrictions on collective bargaining by government employees. Perhaps we should look beyond the shouting and sign waving by the state house occupants. The facts may spell good news for working Wisconsinites (and those in other states).
Ohio University economist Richard Vedder has spent decades studying effects of unionism on the work force. In a paper published in August, 2010 he compared employment  in states which require workers to belong to a union and those that don't (Right to Work states).  Here's a quote from that paper:

Four Midwestern forced-unionism states — Michigan, Ohio, Illinois and Indiana — suffered absolute private-sector job declines over the past decade that were worse than those of any of the other 46 states. Midwestern forced-unionism states (the four just mentioned, plus Missouri, Wisconsin and Minnesota) lost a net total of 1.88 million private-sector jobs.
Combined, these seven forced-unionism states had 8.1% fewer private-sector jobs in 2009 than they did back in 1999.
Meanwhile, the five Midwestern Right to Work states (North Dakota, Nebraska, South Dakota, Iowa and Kansas) experienced an overall private-sector job increase of 2.3%.
Moreover, from 1999 to 2009, real personal income in Midwestern Right to Work states grew by 17.3% — an increase two-and-a-half times as a great as the combined real personal income growth in Midwestern forced-unionism states.

So as you see efforts to try and maintain the status quo for unionism in these states may be working against the folks. Perhaps we (and especially they) should be thinking about the impact of those efforts on the entire economy. Are these sign waving protesters really concerned about the working class?

The argument on the pro-union side seems to be that it betters wages and benefits for members. True? No doubt there's anecdotal evidence to support the argument. But what does history show? At a time when unionism was negligible (3% of the American workforce) and manufacturing grew at an incredible 50% (1860-1890) and another 37%( 1890-1937) American workers were so much better off than their  much more heavily unionized counterparts in Europe.

Do union wages increase? Absolutely! Some studies show unionized labor earn wages 15% higher than nonunion employees. These same studies show that wages in general suffer as a result of an economy that is up to 40% smaller than it would have been in the absence of labor unions.

Bottom line for me is this;  shouldn't workers have a choice whether or not they prefer union membership?

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