Thursday, February 17, 2011

Madison Protests: What I Think of Unions and Their Collective Barganing

Thousands in Madison have been protesting the anti-union bill that recently-elected governor Scott Walker (R-WI) is trying to have pushed through the state Congress.  An important part of that bill is taking away collective barganing away from the unions.  It's no surprise to see that partisan politics is as alive as ever, as we see Obama calling this bill "an assault on the workers," the Democrats fled simply to block voting on the bill, and Congressman Paul Ryan (R-WI) compares the protests in Madison to those in Egypt.

In spite of partisan riff-raff, I don't think Walker is being unreasonable.  Union workers are acting as if it were living back in the Gilded Age.  Back then, workers actually had legitimate grievances.  Many worked in unsanitary environments and were paid significantly less than they merited.  Upton Sinclair's The Jungle outlined true travesties that were occurring in the workworld.  Are there real abuses of power in the work place today?  I wouldn't be surprised.  However, they are significantly more infrequent than the alarmist media would depict.

Less than one in eight Americans are in unions, so even if every union worker were outraged at Walker or anybody else proposing a similar cut, it's still a substantially small minority of Americans.  It's not to say that I'm not against protecting minority rights.  Far from it!  It is just a question of what is being protected.  Let's start with the fact that Big Labor is highly Democratic.  If you look at the unions that are big time donors during election time since 1989, most notably the American Federation of State, County, and Munincipal Employees, the National Education Association (NEA), or the United Auto Workers (UAW), what you will see is that virtually all donations go to the Democratic Party. 

Partisan politics plays a huge role.  After this past election, many Americans sent a message to the United States government saying that they are sick of irresponsible fiscal responsibility.  When you hear about budget cuts, you feel like your back is to a corner.  That is why these protests are also about protecting something else, such as a livelihood.  Those in unions pay a fourth towards their health care premiums than non-union workers. Those in unions have significantly higher wages than non-union workers.  Even in terms of retirement packages, unions get at least three times as much as non-union workers.  Even though there are union workers that do well and like their job regardless of the financial considerations, let's not kid ourselves.  Money still talks!

The higher wages and nice benefits have to come from somewhere.  Money does not grow on trees.  They come from taxpayer dollars and union dues.  It's not enough that the state of Wisconsin has a $43 billion debt (and counting!).  Raising the wages above the equilibrium point (see below) causes a price floor below the equilibrium point, which is just a fancy way of saying "unions distort the labor market to the point where they attribute to unemployment." 

I think it's particularly selfish for this to be going on while there is still a recession.  In these rough times, you should be thankful that you have a job in the first place.  Instead, you are whining like the French were a few months back when they protested about the retirement age being raised from 60 to 62.  Being in the private sector, I know that if I tried to negotiate my salary or asked for them to cover my pension, I could tell you that I would probably get a pink slip along with a shoe up my backside.  If I had a job in which I were paid more than non-union counterparts were and I were handed a nice set of benefits, I would count my blessings rather than protest.  But again, that's just me.  Unfortunately, the America I love, you know, the home of the brave and land of the free, is sadly becoming nothing more than the home of those who crave and land of the greedy.     

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