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

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

Union: Pay TV Talent Show Contestants

The Guardian reports,

Television talent shows are using contestants as “cheap” labour, thereby undercutting professional performers in the entertainment industry, a union has warned.

The actors’ union Equity has rounded on shows such as Britain’s Got Talent and The X Factor, which do not pay contestants a penny for their performances but are watched by millions of viewers on primetime TV.

In a motion tabled for this next week’s annual TUC conference in Liverpool, the union will call for contestants who qualify for the show to be paid the rate for the job amid fears that professionals are losing out.

Seizing on the controversy that surrounded Susan Boyle on the last Britain’s Got Talent contest, the union also calls for a return to “professional drama and light entertainment” rather than shows based on the “exploitation and humiliation of vulnerable people”.

Interesting that a union complained and not the contestants themselves. I doubt contestants label an appearance on television and a shot at stardom “exploitation.”

Support for Unions Lowest in Recorded History

Gallup finds,

…organized labor taking a significant image hit in the past year. While 66% of Americans continue to believe unions are beneficial to their own members, a slight majority now say unions hurt the nation’s economy. More broadly, fewer than half of Americans — 48%, an all-time low — approve of labor unions, down from 59% a year ago.

…These results are from the 2009 installment of Gallup’s annual Work and Education survey, conducted Aug. 6-9. The 48% of Americans now approving of unions represents the first sub-50% approval since Gallup first asked the question in the 1930s. The previous low was 55%, found in both 1979 and 1981.

Happy Labor Day America!

HT: Carpe Diem

High Taxes Hurt Union Workers

According to a new study by the National Bureau of Economic Research:

American workers who belong to unions are paid more than their non-union counterparts, and this difference is greater in low-tax locations, reflecting that unions and employers share tax savings associated with low tax rates. In 2000 the difference between average union and non-union hourly wages was $1.88 greater in states with corporate tax rates below four percent than in states with tax rates of nine percent and above. Controlling for observable worker characteristics, a one percent lower state tax rate is associated with a 0.36 percent higher union wage premium, suggesting that workers in a fully unionized firm capture roughly 54 percent of the benefits of low tax rates.

The study, undertaken by R. Alison Felix, an economist at the Federal Reserve Bank of Kansas City, and James R. Hines Jr., from the University of Michigan, looks at “union wage premiums,” the average amount union hourly wages exceed non-union hourly wages.

According to the study, union workers made $1.30 more per hour than non-union workers in states with a corporate tax rate greater than 9%. But in states with a corporate tax rate below 4%,  the wage premium increased to $3.73.

In an interview, Hines explained that since lower taxes leave firms with higher profits, and unions hold significant negotiating powers over profit distribution, it come as no surprise that high taxes hurt union wages more than non-union wages.

Ultimately, Hines points out that “the study provides more evidence that while income taxes tax corporations, it is the stakeholders, including employees, who bear the burden of those taxes.”

Manufacturing Employment: Union vs. Non-Union

James Sherk, the Bradley Fellow in Labor Policy at The Heritage Foundation, writes:

Most Americans take it as fact that manufacturing jobs have decreased over the past 30 years. However, that is not fully accurate. Chart 1 shows manufacturing employment for union and non-union workers. Unionized manufacturing jobs fell by 75 percent between 1977 and 2008. Non-union manufacturing employment increased by 6 percent over that time. In the aggregate, only unionized manufacturing jobs have disappeared from the economy. As a result, collective bargaining coverage fell from 38 percent of manufacturing workers to 12 percent over those years.

Manufacturing jobs have fallen in both sectors since 2000, but non-union workers have fared much better: 38 percent of unionized manufacturing jobs have disappeared since 2000, compared to 18 percent of non-union jobs.

Unions Gaining on Charter Schools

The New York Times published an interesting piece on charter schools:

Charter schools, which are publicly financed but managed by groups separate from school districts, have been a mainstay of the education reform movement and widely embraced by parents. Because most of the nation’s 4,600 charter schools operate without unions, they have been freer to innovate, their advocates say, allowing them to lengthen the class day, dismiss underperforming teachers at will, and experiment with merit pay and other changes that are often banned by work rules governing traditional public schools.

“Charter schools have been too successful for the unions to ignore,” said Elizabeth D. Purvis, executive director of the Chicago International Charter School, where teachers voted last month to unionize 3 of its 12 campuses.

But if charter schools have been so successful, why unionize them? Don’t fix whats not broken.

The standard argument generally admits the success of charter schools but contends that teachers lose bargaining power over their employers. A union, they argue, would correct this apparent problem.

If teachers felt this way, however, they would leave their charter school positions and teach in standard public schools. This is not occurring at any major scale. What is occurring is the freedom to choose. Teachers can choose to work under a unionized public school system or a non-unionized charter school system. This is the best arrangement.

Under this system teachers in the non-unionized charter schools get paid by merit, while teachers in the unionized public schools get paid by seniority. This is the tragedy of public education.

What can ultimately be gained from the partial unionization of charter schools is a case study. Will students perform better under unionized or non-unionized charter schools? That we will see. Hopefully the focus will remain on how students perform, not on how teachers feels. That concern has destroyed public education in the United States.

Jagdish Bhagwati’s Analyses of the Democrats’ Protectionist Stance

In January, Jagdish Bahagwati, a Columbia professor and senior fellow at the Council on Foreign Relations, wrote against the Democrats’ emerging neo-protectionist stance:

If Mr. Obama’s silences on multilateral trade are disturbing, should we be pleased by his strictures against bilateral free-trade agreements? On closer examination, though, this is not a vote for multilateralism but just the opposite. To understand this paradox, consider that labor union lobbies and their political friends have decided that the ideal defense against competition from the poor countries is to raise their cost of production by forcing their standards up, claiming that competition with countries with lower standards is “unfair.” “Free but fair trade” becomes an exercise in insidious protectionism that few recognize as such.

This cynical tactic can work only when the US is engaged in negotiating FTAs, typically with weak countries. It does not work for the multilateral system, where powerful, democratic countries such as India and Brazil reject such trade-unrelated demands. So, the “fair trade” lobbies, which Mr Obama continues to embrace, gravitate towards FTAs rather than the WTO. The Democrats’ opposition to occasional FTAs — including the latest one with Colombia — reflects, then, a recurring attempt at imposing yet more draconian demands on small countries rather than a preference for the multilateral trading system. If he is to embrace multilateralism and free trade forcefully, Mr. Obama needs a stellar crew that will understand the protectionist nature of “fair trade” demands and dispel the unions’ baseless fear that trade with poor countries harms American workers’ wages.

Larry Summers, National Bureau of Economic Research, US Department of Labor: Unions Harm Economy

According to Freakonomics, unions are under fire these days in Detroit and elsewhere — and for good reason. A working paper by David Lee and Alexandre Mas of the National Bureau of Economic Research finds that a successful unionization vote significantly decreases the market value of the company even absent changes in organizational performance. After running a policy simulation, Lee and Mas conclude , “ … a policy-induced doubling of unionization would lead to a 4.3 percent decrease in the equity value of all firms at risk of unionization.”

The U.S. Department of Labor seems to agree:

Larry Summers, director of the White House’s National Economic Council, also agrees,

Another cause of long-term unemployment is unionization. High union wages that exceed the competitive market rate are likely to cause job losses in the unionized sector of the economy. Also, those who lose high-wage union jobs are often reluctant to accept alternative low-wage employment. Between 1970 and 1985, for example, a state with a 20 percent unionization rate, approximately the average for the fifty states and the District of Columbia, experienced an unemployment rate that was 1.2 percentage points higher than that of a hypothetical state that had no unions.

The relationship between unions and GDP

According to National Right to Work Committee President Mark Mix:

From 2003 to 2008,the aggregate gross domestic product (GDP), in constant, chained 2000 dollars, for the states with the lowest share of workers under union monopoly control increased by a healthy 17.3%. In these 10 states, as of 2003 4.7% or less of private employees were forced to accept a union as their monopolybargaining agent. Meanwhile, the real GDP of the country as a whole grew by just 12.7%. And in the 10 states with the highest private-sector unionization, aggregate output grew by just 9.9% — roughly 57% as much as in the lowest-union-density states (see chart above).

At a time when the country is struggling to pull out of a recession, Congress must not pass any legislation to promote union monopoly bargaining, which has a strong negative correlation with economic growth generally and with job growth in particular. Enactment of S.560 (the Senate version of the proposed anti-worker “card check” legislation) or its near equivalent would mean millions more employees hamstrung by wasteful union work rules and slowdowns that destroy good jobs.

Another consequence would be millions of additional workers forced to pay union dues or fees just to keep their jobs. Much of the confiscated cash would be funneled by Big Labor into efforts to elect even more anti-Right to Work, Tax & Spend politicians to Congress. That’s why Right to Work members and supporters are preparing for an allout battle to ensure that not just S.560 and H.R.1409 themselves, but all phony card-check ‘compromises,’ are defeated in Congress this year and in 2010.

HT: Mark J. Perry