Monday is Labor Day. Will you celebrate unions?
The media does. “Unions are cool again,” reports CBS News. They suggest unionization is booming.
“Reporters” practically cheered when a Starbucks in Buffalo, New York, became the first Starbucks to unionize. “A big symbolic win for labor,” The New York Times called it.
Since then, more than 180 Starbucks voted to unionize, and 300 filed for union elections.
Starbucks already offers better benefits than many companies: health benefits, even for part-time workers, free college tuition, maternity leave and more. Their minimum wage is $17/hour. But activists want more.
Apple Store employees and Google workers are also starting unionization efforts. In the first half of 2022, union election petitions increased by 57%.
They have political support. President Joe Biden promised he’d be “the most pro-union president you’ve ever seen,” and he probably has been. He supports the PRO Act, which would override state right-to-work laws and fine employers that fire workers for trying to unionize.
The Washington Post claims there is a “wave of labor activism sweeping the country.”
But despite all political support and media hype, unionization is down.
Unionization did increase during the pandemic but fell as the pandemic waned. In 2021, 15.8 million workers were represented by a union, a decline of half a million since 2019.
There are many reasons.
The Janus Supreme Court decision in 2018 declared it unconstitutional to force government workers to pay union dues. Now 28 states no longer force any workers to pay union dues. That’s a good thing. No one should be forced to join groups they don’t want to join.
In 1973, when I first went to work for CBS, I was forced to join AFTRA, the American Federation of Television and Radio Artists. I didn’t want to. I didn’t want to pay dues to a union that didn’t appear to do much, but I had no choice.
At work, I saw how union rules routinely slowed work down — sometimes in ridiculous ways. I couldn’t just press a button and watch a video. I had to find a union editor and ask him to press the button.
One reason Fox News grew faster than CBS, NBC and ABC’s news operations is that non-union Fox is more flexible. They are able to try new things. They didn’t have to obey all the stupid rules.
This is another reason why the number of union workers has declined. Union rules limit their employers’ ability to change, adapt and grow.
Non-union Toyota and Honda outgrew unionized companies like General Motors. They hired more people, created more jobs. That was good for labor, just not unionized labor.
Unionization helps some. But it hurts more.
Some GM workers got higher pay and more time off. But lots of potential workers never got a chance. Toyota and Honda helped more people simply by growing faster.
Today activists claim unions built the middle class. Without unions, they say, there would be no weekend and no eight-hour day.
But that’s not true.
Workers’ lives improved in America mostly because of competition, not union rules. Competition is what does the most for workers.
In 1914, Henry Ford doubled his employees’ wages to $5 a day and cut their workday to eight hours. People claim he was forced to do it by union pressure. That’s a myth. He did it because his company had high turnover. Raising wages helped him keep good workers.
Free market competition forces everyone to do better. What workers need is not a union’s rigid rules, but competition.
Today there’s lots of competition for workers. It’s driven companies like Costco to offer a $17-an-hour starting wage.
Unions help some, but a free market helps more.
Henry Ford was a smart business man and therefore recognized the benefit his company would derive from doubling wages and increasing benefits and he didn’t need a union to enlighten him. However most corporations fail to see the big picture as Mr. Ford did. Additionally many corporations often change wages, benefits and company policies arbitrarily. While there are clearly bureaucratic issues with Unions, I like having a contract that spells out both parties obligations and that can’t be changed on a whim.
My Dad was nearly a lifelong member of the IUOE – a cat skinner. I trained driving as much equipment as I could in my early 20’s and was sponsored to join – not by my father. As early and often as I could show up at the office – after 7 months, I was never called out on a job because of ranking. So, at least in the 70’s, it was as if tenure had been established – any jobs available were offered to those who had paid the most dues first – not those first in line in the morning. Another job I found required mandatory affiliation with EBEW – whose services I never once used. I was also a machinist and had to join IAMAW – and my bad luck, there was a strike within 6 months of working there. Though I received a small temporary unemployment benefit – it didn’t last to end of strike. The next job was non-union but was somewhat permanent as were all (non-union) subsequent jobs. Now, just the concept of collective bargaining .. makes me realize that it’s not for the sake of the worker – but more so for the workers representative. Now, much older and hopefully wiser, I see clearly the error in unionizing federal employees – because of the power it levies over us to obtain federal services that should be included in our taxes.
Costco pays $17 an hour and where in America can a single person afford a home with that wage? They made 196 BILLION in revenue last year. “The costco ceo salary earned a total compensation of $8,595,381 during his tenure as President and Chief Executive Officer of COSTCO WHOLESALE CORP. Of this amount, $1,032,885 was received as a salary, $460,000 was received as a bonus, $0 was obtained in stock options, $7,049,636 was granted as stock, and $52,860 was received in other forms of compensation, bringing the total to $1,032,885.
All of this information is based on proxy statements that were submitted for the fiscal year beginning in 2021.” How is this healthy for the middle class?
Costco is paying a starting wage that is higher than the federal minimum wage or any state minimum wages. A number of market factors helped Costco determine that number, showing that legislatively determined minimum wages are not only detrimental but lagging behind economic reality. A minimum wage is exactly that, a starting point in the wage scale and roughly half the workers earning minimum wage are under 25 years old. A large majority of minimum wage earners are not solely supporting families. On the average Costco workers average $24 an hour and receive a number of benefits including health, 401K with employer match among other things. CEO is a highly specialized job and requires that person to be on 24/7. They are answerable to the stockholders and the Board and $8 million over the course of a few years for company generating billions in revenue sounds like a bargain. Comparing C-Suite compensation to what the average worker earns is an apples to oranges comparison.
If a company earns 170 billion dollars, it is easier to pay more for its executives and for new systems, new stores, more employees and more training so employees can be yet more productive. A healthy profitable company results in a feeling of benevolence that motivates employers to be on the watch for employees who are willing to go the extra mile and look for new ways to improve things. Mr Rogan asks how this benefits the middle class. That is precisely how. I should point out that the first folks who benefit are employees who are not merely doing enough work so they don’t get fired. Ultimately, consumers benefit from lower prices and better machines.