What role do workers' unions play in an economy?
In economies there are private sector unions and public sector [government] unions. Public sector unions serve no useful purpose as far as I can see, and in fact there’s an inherent problem in even having these public sector unions. The reason for this is that normally, in the relationship, there is an employer who is protecting the interests of the company, in this case the shareholders, and a union who is fighting for the workers. Both sides have a kind of tug-of-war to find a reasonable compromise on workers’ wages while still preserving the profitability of the company. Author, Commentator and President of The King's College, Dinesh D'Souza |
Labor unions tend to operate in a very short sighted manner, most often by attempting to maximize the pay and benefits of their members in the short term even as it ends up costing their jobs in the long term by bankrupting the employers. But while current employees might collectively benefit in the short run, the high cost of employing workers results in fewer employment opportunities for those who are unemployed. Economist, investment advisor, author and commentator, Peter Schiff |
Workers’ unions reduce job opportunities and economic growth by distorting labor markets. What this means is that union policies tend to increase the cost of employing people and reduce the productivity of employees, which reduces the natural demand for employees and the supply of jobs. When employers are forced to pay higher wages, to provide more expensive benefits and to comply with burdensome regulations, they discourage employers from employing more people. And when the union sets the wages for employees and conditions under which an employee can be fired, rather than the employer making these decisions, it removes the employee’s incentive to work harder because his pay rate and employment aren’t tied to his effort. President of the Center for Urban Renewal and Education, Star Parker |
Workers unions once had an important role in creating needed protections for employees. Large employers that needed lots of largely unskilled labor didn't have a big incentive to create safe work conditions or pay decent wages to any particular employee. When those employees joined together in a union, they were better positioned to negotiate. Independent Women's Forum director and Goldwater Institute senior fellow, Carrie Lukas |
In spite of his support for free markets, John Stuart Mill, the father of modern liberalism, argued that the excessive bargaining power of employers in relation to individual employees meant that the formation of unions to redress the imbalance should be facilitated by the state; and so it has come to pass. If the balance of power between employer and unionized employee is just right then clearly unions play an indispensible role. If, however, the balance favours one side or the other – and this may differ from industry to industry and from employer to employer – then the imbalance should be redressed. Beyond bargaining around wages, unions have been responsible for enormous changes in hours of work, work practices and worker entitlements over the years. If the recent trend of declining union membership on the part of workers is anything to go by, it appears that unions have been so successful in pursuing their aims that, at least for now, their major work has been done. Professor & Head of QUT's School of Economics and Finance, Tim Robinson |
Private workers’ unions play a diminishing role in the economy, partly because once we move to a global marketplace, the costs that they impose through higher wages and benefits in industries where pricing is very sensitive, makes the unions a liability. Contributing editor of City Journal and Manhattan Institute senior fellow, Steven Malanga |
2011 saw a focus on public sector unions. These unions have secured defined benefit pensions, and top-of-the-line health care benefits that are completely out of whack with private sector benefits, and what taxpayers can afford. Furthermore, the debt and future liabilities that states have accumulated due to these deals is making the economic outlook bleak for many states. Clearly the benefits that have been negotiated are unsustainable, and we saw this in Wisconsin in 2011 where a battle was waged over sensible reductions to public sector union pensions. Vice President of the National Taxpayers Union, Pete Sepp |
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 |
Workers unions can be a stranglehold on the economy where the only way you can hire labor is if you pay these astronomical figures which, to some extent, influences businesses to move overseas or to move to different parts of the country where unions don't have such an influence. I think the union movement was designed to protect the workers from mistreatment but there were a lot of people who played on the system. Having to play with the union, and you can see it with the teachers union, it's clear that we don't necessarily get quality because we pay top-notch money, so employees need to be responsible and not assume that they're protected by the union so that they can be slack workers, because then what you've done is strangle-held the business owner who has no recourse. So unions can be the death of an economy if misused. Entrepreneur and Chairman of The Frederick Douglass Foundation, Timothy Johnson |
Unions can play a constructive role in negotiating wages for workers against management and in representing employees as stakeholders in a company. They also can help fight for freedom overseas – the AFL-CIO helped win the Cold War by supporting Solidarity in Poland. Editor of FutureOfCapitalism.com and author of "Samuel Adams: A Life", Ira Stoll |
They often influence government to impose regulations that distort and block the efficient use of capital. President of H. C. Wainwright and Company, Economics, David Ranson |
Ideally, unions should lead to increased wages and benefits, thereby expanding the middle class. The erosion of union power has been a net negative for the country. Where unions don't work well is in the professions, or what should be professions, like teaching, where they often impede accountability, protect the incompetent and reduce quality with work rules. Author, commentator and lead Bloomberg View columnist, Jonathan Alter |