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Tuesday, April 17, 2012

Flunking Both Moral and Economic Tests by Lawrence W. Reed

If compulsory unionism were put to a moral test, it would flunk without debate. Forcing a worker to join and pay dues to an organization he doesn’t want to represent him is a manifest violation of that worker’s free will and right of contract. It so happens that it also fails the economic test.

You don’t have to take my word alone. If you want to read a gripping story of one man’s David-versus-Goliath battle against Big Labor, read the new book by David Bego, The Devil at My Doorstep. It chronicles his company’s lengthy, costly, but ultimately successful effort to prevent the Service Employees International Union (SEIU) from dragooning his employees into its ranks.

Faced with repeated failure to convince Bego’s workers to unionize, the SEIU mounted a vicious campaign of violence, intimidation, and smears. The story reads like a novel of horrors. Because it’s true it ought to raise alarm among all citizens that such a powerful and politically well-connected group can often get away with it.

In a thorough 2002 study published jointly by the National Legal and Policy Center and the John M. Olin Institute for Employment Practice and Policy, Ohio University economists Richard Vedder and Lowell Gallaway demonstrated that compulsory unionism does economic damage that ultimately works to the disadvantage of workers, both unionized and non-unionized.

They calculated that unions cost the U.S. economy $50 trillion over the previous half-century. By distorting the price of labor and imposing inefficient work rules, Vedder and Gallaway argued, union policies constitute a steady drain on resources and overall productivity.

Those economic losses meant that although unionized workers had 15 percent higher wages than non-unionized workers, overall wages were depressed by an economy that was 30–40 percent smaller than it would otherwise have been. In other words, unionized workers get a slightly larger piece of a pie made significantly smaller by their union efforts.

Vedder and Gallaway provided stunning data on what happened after unionization of key industries. For example: In 1960, after 40 years of John L. Lewis’s militant leadership of the United Mine Workers (UMW), wages were indeed higher for those who still had jobs but there were 400,000 fewer people employed in the coal industry. By 1999 just 70,000 workers were left in coal mining—barely one-tenth the number when Lewis took control of the UMW 80 years before.

FEE has never argued that unions should be banned. It’s the ability to coerce and intimidate that ought to be unlawful in every state.

Leonard Read, FEE’s founder, expressed a profoundly important guideline for a free society in the phrase “Anything that’s peaceful.” It applies to labor issues as well as to any other matter. Every free man or woman has an inherent right to seek employment, engage in contracts, and expect employers to live up to them or face legal action. Every man or woman has the right to form private, voluntary associations with other workers. If it doesn’t involve a unilateral breach of contract, every man or woman even has the right to walk off the job, though no one has the right to prevent an employer from filling a vacancy with another, willing worker.

And no one has the right, as some unions are claiming at the moment in places like Wisconsin, to compel taxpayers to pay for jobs in government that are not needed, not wanted, or not affordable.

In liberty,

Lawrence W. Reed