There is little doubt that President Obama would love to see all of us as one big union family. The collectivization urge runs deep in our president and what better way for all of us to join hands and dance around the Maypole than for all of us to become part of organized labor - brothers and sisters all.
The trouble is, Obama's top economic advisor warned a few years back that the more union jobs that are created, the fewer overall jobs show up in the economy:
From a piece by Fred Barnes in the Weekly Standard:
"High union wages that exceed the competitive market rate are likely to cause job losses in the unionized sector of the economy." That is the unvarnished conclusion of one of the country's most admired economists. From 1970 to 1985, a state with average unionization had a rate of unemployment 1.2 percentage points higher than a state with no unions. This represented "about 60 percent of the increase in normal unemployment" in that period.
Okay, a finding from several decades ago may be a bit dated. But the phenomenon of how unionization affects unemployment isn't. Nor is the economist--Lawrence Summers, formerly president of Harvard and now President Obama's chief economic adviser. In this week's Fortune, Nina Easton calls him "the mastermind" of Obama's economic policy. His influence has limits, however, for Obama is aggressively promoting unionization at the worst possible time, smack in the teeth of a deepening recession with soaring unemployment.
So here we are in the midst of a deep recession and Obama's collectivist instinct (as FDR's before him) causes him to push for spending targeted for unions. It's one thing to be grateful for the hundreds of millions unions spent to get him elected. It's quite another to threaten the economy by giving in to this stupidity:
Obama has issued four executive orders to benefit unions, nominated a union pawn as labor secretary, and picked a union lawyer to head the National Labor Relations Board. Aside from ramming card check through Congress, there's not much more he could have done in his first month in office to please labor leaders.
One executive order says private contractors on federal construction projects should hire union workers. This puts non-union contractors, especially small minority companies who compete by making lower bids than contractors with unionized workers, at a distinct disadvantage. Another order bars federal contractors from being reimbursed for expenses incurred in trying to persuade employees not to form a union. A third would force contractors to retain workers when taking over a project from another contractor.
These orders will have an immediate impact. Most (if not all) of the infrastructure projects funded in Obama's $787 billion stimulus plan will have union workers. Given the higher labor costs, this means fewer of the estimated 1 million construction workers currently unemployed will find work.
To make matters worse, the "prevailing wage" required on federal projects by the Davis-Bacon law will apply to all projects. This is supposed to be the average wage for construction workers in a region, but it usually turns out to be the higher union wage. So fewer workers will be employed even on non-union projects.
There's a double whammy here. Despite rising unemployment, a sharp limit is being imposed on hiring. And taxpayers will be required to pay considerably more for construction projects than necessary. This should be unacceptable in good times. In a recession, it's worse.
No doubt about it; unions have a friend in our new president. And the chances that a future America will see it very difficult to get a job unless you are willing to join a union are increasing - just as Obama and Big Labor intend.
Hat Tip: Ed Lasky