Are Unions Good for the Economy?

Zogby Interactive recently asked likely voters across the U.S. if unions are good for the economy. 38% percent said “yes” while 49% said “no.” 13% were unsure.

This is not what interested me in this, of course Americans should be split on their opinions of unions.

Zogby broke down the respondents into subgroups, including those who “never shop at Wal-Mart,” are “NASCAR fans,” and who “consider themselves members of the investor class.”

Subgroup analysis shows that groups more likely to think that unions are good for the U.S. economy include liberals (76%), Democrats (68%), African Americans and Hispanics (65%), respondents who are union members or who have family members in a union (57%) and people who never shop at Wal-Mart (60%). Groups that are more likely to think that unions are not good for the economy include conservatives and libertarians (88%), Republicans (83%), people who shop at Wal-Mart at least once a week (69%), respondents who consider themselves members of the investor class (59%), NASCAR fans (61%) and born-again Christians (62%).

WSJ: ‘Michigan Forces Business Owners Into Public Sector Unions’

The Wall Street Journal reports on a new method for labor unions to increase annual revenues: force.

A year ago in December, Ms. Berry and more than 40,000 other home-based day care providers statewide were suddenly informed they were members of Child Care Providers Together Michigan—a union created in 2006 by the United Auto Workers and the American Federation of State, County and Municipal Employees. The union had won a certification election conducted by mail under the auspices of the Michigan Employment Relations Commission. In that election only 6,000 day-care providers voted. The pro-labor vote turned out.

Today the Department of Human Services siphons about $3.7 million in annual dues to the union—from the child-care subsidies. The money should be going to home-based day-care providers—themselves not on the high end of the income scale. Ms. Berry now sees money once paid to her go to a union that does little for her. She says she is “self employed and wants nothing to do with the union.”

Government Safety Fail

It should come as no surprise that the federal government is using GM as an outlet for its rampant paternalistic urges.  The most recent example, coming from the Wall Street Journal, is particularly disturbing given the potential safety problems it will create.

Starting Jan. 4, General Motors Co. plans to do something unprecedented in the U.S. car industry: It will run its assembly line here around the clock on a permanent basis.

While common in other industries, not even car-efficiency benchmark Toyota Motor Corp. operates its plants routinely with more than two shifts. Car-assembly lines need too much scheduled maintenance and restocking for such intensive production to make sense, many industry experts say.

The Obama administration auto task force that oversaw GM’s reorganization last spring was startled to learn that the industry standard for plants to be considered at 100% capacity was two shifts working about 250 days a year. In recommending that the government invest about $50 billion in GM, the task force urged the company to strive toward operating at 120% capacity by traditional standards.

This situation is not without precedent. Government regulations frequently move behavior in the opposite direction of public health and safety. Increased regulations on average MPG for automakers results in lighter cars and, as a consequence, a higher number of fatalities. While government safety regulations for cars increase costs and incentivize consumers to keep older cars longer, resulting in greater emissions. At the very least, however, the preceding examples of government paternalism had some roots in good intentions. Running GM plants at 120% capacity has the potential to cause deaths for the sake of providing jobs and stimulating the economy. Unfortunately, such Keynesian policies do not provide jobs and do not stimulate economies. So the result of this latest act of paternalism will simply leave us with decreased safety and increased economic inefficiencies.

HT: Cafe Hayek

Forced-Union States Lose $124.3 Billion in Income from 2001 to 2008

Mark Perry has created a great chart showing the net movement of income to right-to-work states:

From the National Right to Work Committee:

Counting just the income lost by forced-unionism states in the first year after each tax filer moved to a Right to Work state, forced-unionism states lost a net total of $124.3 billion (in constant 2008 dollars) due to domestic outmigration over this eight-year period.

Unions win one

From the Wall Street Journal:

The National Mediation Board, which oversees labor relations in the air and rail industry, this month moved to overturn 75 years of labor policy.

The board plans to stack the deck for organized labor in union elections. Under a proposed rule, unions would no longer have to get the approval of a majority of airline workers to achieve certification. Not even close. Instead, a union could win just by getting a majority of the employees who vote. Thus, if only 1,000 of 10,000 flight attendants vote in a union election, and 501 vote for certification, the other 9,499 become unionized.

Union Vs. Boy Scouts

From The Morning Call:

In pursuit of an Eagle Scout badge, Kevin Anderson, 17, has toiled for more than 200 hours hours over several weeks to clear a walking path in an east Allentown park.

Little did the do-gooder know that his altruistic act would put him in the cross hairs of the city’s largest municipal union.

Nick Balzano, president of the local Service Employees International Union, told Allentown City Council Tuesday that the union is considering filing a grievance against the city for allowing Anderson to clear a 1,000-foot walking and biking path at Kimmets Lock Park.

“We’ll be looking into the Cub Scout or Boy Scout who did the trails,” Balzano told the council.

HT: Modeled Behavior

The decline of trade unions around the world

The Organization for Economic Cooperation and Development (OECD) yesterda released updated numbers on what percentage of employees in each member country belong to a trade union. Click below to view an interactive chart that illustrates the changes in trade union density around the world.

Why ObamaCare May Die

It took centuries of intellectual, philosophical development to achieve political freedom. It was a long struggle, stretching from Aristotle to John Locke to the Founding Fathers. The system they established was not based on unlimited majority but on its opposite: on individual rights, which were not to be alienated by majority vote or minority plotting. The individual was not left at the mercy of his neighbors or his leaders: the Constitutional system of checks and balances was scientifically devised to protect him from both. This was the great American achievement…

- Ayn Rand

Sadly, our current executive and legislative leadership is not acting in the best interest of the individual, but in the interests of various groups. The silver lining is that their juggling act may be collapsing. Michael F. Cannon, Director of Health Policy Studies at The Cato Institute, has a blog post on how the Democrats’ various constituencies are becoming plainly at odds – and why this friction could ultimately be ObamaCare’s doom.

The Left and the health care industry both want universal health insurance coverage.  The industry, because universal coverage means massive new government subsidies. The Left, because that’s their religion.

But universal coverage is so expensive that Congress can’t get there without taxing Democrats.

• Sen. Jay Rockefeller (D-WV) is the biggest opponent of Sen. Max Baucus’ (D-MT) tax on expensive health plans because that tax would hit West Virginia coal miners.
• Unions vigorously oppose that tax because it would hit their members.
• Moderate Democrats in the House oppose Rep. Charlie Rangel’s (D-NY) supposed “millionaires surtax” because they know it would hit small businesses in their districts.

And on and on…

But if congressional leaders pare back those taxes, they lose the support of the health care industry, which wants its subsidies.

• That’s why the health insurance lobby funded this PriceWaterhouseCoopers study saying that premiums would rise under the Baucus bill: the $500 billion bailout they would receive isn’t enough.  They also want – they demand –  steep taxes on Americans who don’t buy their products.
• The drug companies, the hospitals, and the physician groups are likewise demanding big subsidies, and will run ads to kill the whole effort if those subsidies aren’t big enough.

As always, health economist Uwe Reinhardt put it colorfully:

“It’s no different from Iraq with all the different tribes…‘How does it affect the money flow to my interest group?’  They are all sitting in the woods with their machine guns, waiting to shoot.”

Once the shooting starts, industry opposition will sway even Democratic members, because there are physicians and hospitals and employers and insurance-industry employees in every state and congressional district.

Can President Obama and the congressional leadership satisfy both groups?  My guess is, probably not, and this misguided effort at “reform” will therefore die.  Again.

President Obama’s Keynesian economic policies and programs attempt to defy reality by evading the law of causality. As with all collectivist societies, however, we will be visited by reality’s judgment and learn the hard way that empty rhetoric and false promises will never replace innovation and production as tools of economic prosperity.

HT: Club for Growth

Mexico’s troubled oil industry

The Economist asks, “How many Mexicans does it take to drill an oil well?”

The answer: “More than 140,000, and even then they’re not very good at it. For this, now acute, problem, blame the politicians.”

The author paints an ugly picture:

It is bad enough that Mexico’s economy is in deep recession, triggered by its close links to the ailing United States. To make matters worse, the country’s oil industry, its fiscal cash-cow for the past three decades, is declining swiftly (see chart). As recently as 2004 Cantarell, the country’s main offshore field, produced 2.1m barrels per day (b/d) of crude. Now its output is just 600,000 b/d. There are no obvious replacements: 23 of the 32 biggest fields are in decline. Barring big new finds, the world’s seventh-largest oil producer is forecast to become a net importer by 2017.

“There is no mystery behind the decline,” writes The Economist:

The constitution bans private investment in hydrocarbons. Ever since Lázaro Cárdenas expropriated foreign oil companies in 1938, the state oil monopoly has been seen by many politicians, especially from the formerly ruling Institutional Revolutionary Party (PRI) and its offshoots, as the untouchable bone marrow of Mexican sovereignty. To make matters worse, Pemex has been run more in the interests of its workers and their trade unions than of the Mexican people, its notional owners.

…Even if Mexico allowed private companies to explore for oil, they would have to invest $10 billion a year to halt the decline in output, reckons David Shields, who edits a specialist magazine on Mexican oil. Under today’s law, in which private firms can only act as service providers for Pemex, that investment would be much higher, he says.

Power to the People? Not In Chicago

Chicago Tribune:

Wal-Mart’s plans to build a second store in Chicago remain bottled up in the Chicago City Council. The store that Wal-Mart would like to build on the South Side at 83rd Street and Stewart Avenue, is going nowhere because the aldermen live in fear of organized labor and organized labor despises Wal-Mart.

We know organized labor wants to keep Wal-Mart from expanding in Chicago. But what do the aldermen’s constituents want? The answer is clear: They want the opportunity to work or shop at Wal-Mart. A new Tribune/WGN poll found that 68% of city residents would like to see a new Wal-Mart store in Chicago, and 72% say Wal-Mart would be good for the community. The support is even higher with African-Americans, who stand to gain the most economic benefit from the proposed South Side store. The poll found 72% of African-Americans want Wal-Mart in the city and 81% say it would be good for the community.

The Tribune poll, conducted in late August, mirrors polls taken this summer for Wal-Mart and for the Chicagoland Chamber of Commerce that showed strong public support for the retailer. But the aldermen aren’t listening to their constituents. The unions provide money and troops at election time. Apparently the aldermen have decided that keeping the labor bosses happy is more critical than following the wishes of their citizens.

Two hundred construction jobs — union jobs, by the way — and up to 500 retail jobs. But City Council leaders won’t even allow a vote on an ordinance that would clear the way for Wal-Mart to build and open on the South Side. They’re in step with the union bosses, but they’re out of step with the people.

HT: Carpe Diem