Growing up in Michigan in the heyday of the United Auto Workers, I long assumed that labor unions were part of the natural order of things.
That's no longer clear. Last month, the Labor Department reported that private-sector unions lost 834,000 members last year and now represent only 7.2 percent of private-sector employees. That's down from the all-time peak of 36 percent in 1953-54.
But union membership is still growing in the public sector. Last year, 37.4 percent of public sector employees were union members. That percentage was down near zero in the 1950s. For the first time in history, a majority of union members are government employees.
In my view, the outlook for both private- and public-sector unionism is problematic.
Private-sector unionism is adversarial. Economic studies show that such unions do extract premium wages and benefits from employers. But that puts employers at a competitive disadvantage. Back in the 1950s, the Big Three auto companies dominated the industry and were at the top of the Fortune 500. Last year, General Motors and Chrysler went bankrupt and are now owned by the government and the UAW. Ford only barely escaped.
Adversarial unionism tends to produce rigid work rules that retard adaptation and innovation. We have had a three-decade experiment pitting UAW work rules against the flexible management of Japanese- and European-owned non-union auto firms.
The results are in. Yes, clueless management at the Detroit firms for years ignored problems with product quality and made bonehead investment mistakes. But adversarial unionism made it much, much harder for Detroit to produce high-quality vehicles than it was for non-unionized companies. - Rasmussen Reports
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