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Are unions like the dog that caught the car?

June 1, 2015

Did you ever see one of those old TV cartoons of a dog chasing a car and finally catching a tire, and the sound effects going “flippity-whump, flippity-whump”?

Did unions just catch the car?

Getting a $15 minimum wage in Los Angeles and other cities and states has been a well publicized union goal for at least the past year or more. So now that they appear to have won that argument, why are unions pushing to create exemptions from it for unionized shops?

Could it be that someone finally realized that if everyone makes at least $15 an hour, even fewer people would need unions? After all, a two-earner household could potentially be looking at over $62,000 a year if $15 becomes the new bottom rung of the earnings ladder.

Unions traditionally offer two things to attract members and their dues money, namely higher wages and better benefits. Those benefits include top drawer health insurance, generous pensions and safer working conditions. Sounds like a good deal, right?

So why doesn’t everyone belong to a union?

Union membership in the private sector has declined steadily since 1945, as the Federal government instituted ever more control in the workplace. Membership has dropped from a high of 35.5% to a low of 6.6% in 2012. Even adding in the public sector government employees, only 11.3% of workers actually belong to a union.

Not much of that decline seems to be the result of “union-busting” by employers. Actually, the reason seems to be that Federal oversight and policies have dramatically reduced the need for unions.

This is a classic case of being careful what you wish for. By using union dues to exclusively support, campaign for and elect big-government candidates, unions may have negotiated and contributed themselves right out of relevance.

How is big government working out for big labor?

Obamacare threatens to add considerable cost for penalties to the so-called “Cadillac plan” health insurance policies available to many union members. OSHA and six other government agencies police workplace safety, compensation, equal opportunity, civil rights and most of the other non-wage things that unions used to have a monopoly on providing through negotiations.

Many public sector employee state pension plans are now reportedly grossly underfunded, to the tune of $4.7 trillion. The Federal government’s unfunded liabilities, largely for pension-related costs, is forecast at $127 trillion. No matter how good the pension plans are, they aren’t worth much if you can’t collect on them.

By forcing local governments into increasing the minimum wage to $15, unions may have just made themselves completely irrelevant.

The main argument in LA seems to be that by creating “carve-outs” for the unions, workers will retain the power to collectively bargain with employers, who might then be able to negotiate for (wait for it) a lower wage.

That sounds suspiciously like an “oops.”

What’s left to bargain about? About the only place it looks like the unions have left to go is a guaranteed income or a job for life. There aren’t enough blue collar job openings to go around now, so that doesn’t seem like a very good idea.

What about income equality?

What about the far left and often union-backed idea of income equality, also known as take from the rich and give to the poor? Maybe they could bargain for that.

If the current crop of union-backed candidates is elected and becomes able to make and enforce “income equality” tax policy and create the laws it will take to separate most of us from our incomes, union wages will some of the first to be taxed.

Bernie Sanders thinks the top tax rate of 92% was just fine back when Dwight Eisenhower was elected President in 1952. Unfortunately, he neglects to publicize that there was more than one tax rate back then, because even in 1952 there just weren’t enough millionaires to pay the bills.

(For a look at how income was taxed back in the good old Eisenhower days, check out the 1952 tax rates here.)

Notice that the lowest tax rate, for people earning $0 (yes, zero) to $2000 was 22.2%. In today’s dollars that would mean that anyone earning from $0 to $17,722 would pay 22.2% of their income to the government. Those making $15.00/hr now ($1.68 in 1952) would have been taxed at 24.6% in 1952. The top tax rate for a single person kicked in at $200K, or about $1.785 million today.

Would you want to join a union and contribute your dues to candidates supporting that cause?

Can you hear it? Flippity-whump, flippity-whump…

From → op-ed

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