Labor Unions

According to the Bureau of Labor Statistics, union membership has fallen in 2006 to a mere 7.4% of the private sector workforce, and 12.0% of the whole. In the government sector, membership has been relatively high for the last 45 years; it jumped from 11% to 24% in 1962, rose to a high of 40% in 1976 and then has remained steady, dropping off only slightly, to post a 36.2% rate in 2006. By comparison, in the 1950's, unionized workers represented 35% of the entire workforce and government membership averaged only 11-12%.

The ongoing decline in the private sector is a result of several factors, but all basically come down to the simple fact that there is no longer a need for labor unions. The nature of the business environment and a re-shuffling of the manufacturing sector have contributed somewhat to the downturn. But more importantly, workers of today no longer feel abused or taken advantage of by their employers. If anything, conditions and the laws have swung in the other direction...where the employer is often the victim in disputes.

At the time labor unions were first formed in this country, the large corporations of the Second Industrial Revolution (late 1800's) essentially had "captive" worker pools...there was no social "safety net"...people either went to work, or they starved. As agriculture became mechanized, less workers were needed on the farms and they headed for the cities. At the same time, immigrants were entering the country at a rapid pace; many of them were looking for factory jobs as well. Long work hours, poor working conditions, low wages, employer-run stores and housing, unsafe conditions and child labor were all real problems that needed to be addressed. Labor unions organized and fought these battles through the use of strikes and also through changes in the law.

Selfishness:

None of these major problems exist any longer, so the union's only remaining purposes are to push for higher and higher wages and benefits and to protect their members from being terminated, regardless of cause. They have also been spending their member's dues to influence politics, generally in a one-sided manner, and to pass laws that benefit them, often via the public treasury. In short, they have become completely consumed by selfishness and greed.

Example of union selfishness:

At Goodyear, last fall, workers went on strike when the corporation tried to restructure and renew their agreement. No jobs were being cut, despite pressure to do so by the relocation of their competitors to lower-wage countries. The union recommended a strike. After the strike was under way, one of the methods used to create leverage against the company was to run nationwide radio ads. These ads warned the public that Goodyear products would be "unsafe" in the future (if replacement workers were used). Basically, the union was willing to tear down the company (their employer) to advance their own selfish goals...ignoring the fact that lower product sales would result in less ability to pay the inflated salaries they were attempting to gain.

Another example of union selfishness:

At Harley-Davidson in Milwaukee, although the company has been incredibly successful in recent years, two factors were targeted by ownership in the new bargaining agreement. They wanted the ability to start new employees at a lower hourly wage ($18.75) than regular workers ($22.75) and they wanted to negotiate a better health insurance plan since, like all companies, they have been crushed by rising costs. Neither concession affected the overall compensation of current workers and both seemed like reasonable suggestions, and workable deals; however, the unions were not willing to give an inch of ground. They felt that since the company was currently profitable they did need to work with them toward the future. In fact, the general attitude was that the company was not sharing enough of its success with them (never mind the stockholders, apparently). The workers at a Pennsylvania plant did walk off the job for a short time this winter, resulting in corresponding lay-offs at other plants. It was not until the company began talking about expansion elsewhere that the union came to their senses.

Example of union protection:

In a local school district last year, a high school science teacher was fired for viewing pornography on his computer. Several instances had been documented from the previous year and he admitted to having done so at other times in the past. Of particular concern was that the images viewed were of teenage girls; he had also improperly kept photos of students he led on a summer trip to Hawaii as leader of the Science Club. Unfortunately, he was also the former president of the teacher's union, and refused to go quietly, eventually winning an arbitration case and reinstatement.

Raiding the public treasury:

Occupations that were once considered to be "public service" have gradually turned into a lifetime "gravy train" for many. The public employee unions have managed to negotiate better and better compensation packages, taking more and more money from their fellow taxpayers. At the same time, they have gotten laws enacted that have made it harder and harder to fire workers for mistakes, incompetence, laziness or poor attendance. Many of the new benefit increases have been hidden from the casual observer:

Example of public workers' "hidden costs" to the taxpayers:

County position #1: $24,570 wages - $41,199 w/benefits
County position #2: $31,102 wages - $52,178 w/benefits

These examples show that the wages paid to these employees are a mere 60% of their total compensation package; for comparison, in the private sector, they average 72%.

At one time, government workers accepted the lower pay scale as a trade-off for the "better than average" benefits...now they cite those numbers as a sign that they are "undervalued" and lobby to get both. In fact, in 2005, the average Federal worker made more than double the amount of the average private sector worker, when benefits were included; their wages/benefits rose 5.8% while the private sector's went up only 3.3%.

A blatant case of taxpayer abuse is the "protection" example, above. Let us break down the process and end result. The taxpayers, through the school district gave this teacher a job. Out of concern for his actions (surfing for porn) the District hires a computer expert and a psychologist to document the activity and the potential behavioral risks, to ensure that any actions taken are justified. The union, on behalf of the teacher, files a grievance against the district, which the school district's lawyers have to counter. The arbitrator finds that the District did not have sufficient cause to terminate his employment and orders him reinstated with all lost pay and benefits. The entire fiasco was nothing more than a waste of the taxpayer's money (every dime was public dollars of one type or another) and they still have this man teaching their kids.

Another major benefit, pension plans, which have been disappearing from the private sector due to sheer inability to afford the cost, are still alive and well in government. Their cost, you see, is little concern to government officials, who simply raise taxes to afford their "needs."

Example of this "hidden cost" to the taxpayers:

In Milwaukee County, the former County Executive and County Board passed a ridiculously lucrative pension deal for government workers. Retirement officials have now slammed the door on a little-known and seldom-used pension option after a retiring county attorney (56 years old, 27 years of service) opted to take a lump-sum payment of all of his pension benefits, which he says should total $746,000. County pension officials informed him that the payout should have been only $647,000 because an annual cost-of-living increase was erroneously included in the higher estimate he had signed off on in August. He turned down a guaranteed annual $57,000 pension-for-life, plus another $263,000 in cash up front.

So this particular employee, who decided to retire early because he "grew tired of his job, the courthouse 'scene' and the constant budget cuts" gets to cash-out his 27 years of public service for over a half-million dollars. If he had taken the other option, based on life expectancies, he could have received over 1.5-million dollars during his retirement. Just contemplate that for a moment and take note of the token reference to the "stingy" taxpayers in his reason for leaving.

Conclusion:

Something has become lost over the last century, in large part due to the cumulative affect of the actions of the labor unions. What is gone is the connection between employee compensation and the value of the goods or services they produce.

During the "Gilded Age," labor was a cheap and plentiful commodity that was exploited, much like the coal and iron ore that was simply dug from the ground and fed into the furnaces of industry. The so-called "Robber Barons" amassed large fortunes because the value of the products they produced was vastly greater than the cost to produce them (of which labor was a large part). Following that period of history, government actions (trust-busting) and labor actions (union organization and strikes) cut into those profits from both sides...profits on sales dropped and cost of production rose.

Following the Second World War, the manufacturing sector experienced a sort of new golden age. Both the corporations and the unions did well as the economy expanded. When economic downturns occur, corporations need to react by cutting costs; the unions, which had became strong, refused to accept concessions or lay-offs, and the corporations suffered. The percentage of a product's cost due to labor continued to increase...the nation's once-largest employer, General Motors, recently reported that it was paying 2-1/2 retired workers for every active worker and the labor cost had surpassed the cost of the steel used to build a car. Such a situation is simply unsustainable in the business world; those jobs eventually will, and are moving to companies who are not so handicapped and are able to deliver lower-cost products.

This is why the unions have targeted the public sector as their area of growth. Because the taxpayers in a particular community are not going to pull up stakes and relocate, as a company might, they are a captive target. The union, once in place, is very hard to dissolve, and uses its members' dues to lobby for expanded government spending and for laws favorable to its existence. In Wisconsin, the teacher's union is usually the largest single-issue campaign contributor in the elections.

How does it make sense that we allow people who are serving at our behest, and supposedly for the collective good, to take advantage of us like they are? The private sector has figured out that unions have outlived their need - when will we as taxpayers recognize it? At some point, we must realize that, by allowing the unions to grow inside government, we are essentially creating the instrument of our own destruction.