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William Niskanen : What role do workers' unions play in an economy? / Clear, concise arguments and answers from leading thinkers / Eristical.com
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William Niskanen

Private unions don't play much of a role anymore. The percentage of the private labor force that is unionized has dropped precipitously since 1950, but the dominant effect of the unions right now is in the public sector and that has led to an appreciable increase in the relative compensation of public employees vs. private employees and increases the amount of expenses for government. There are still some powerful unions in the private sector but in many cases those powerful unions have driven their companies almost out of business. I used to be the chief economist for Ford Motor Company and I saw it almost destroy the American automobile industry, but their influence has been weakened by deregulating some of the older firms in transportation and other industries and utilities back in the 1970s which disciplined them. In the private sector, unions ended up killing themselves and in the public sector they have increased expenses for government and consequently taxes.

Cato Institute Chairman Emeritus and Senior Economist, William Niskanen