The Unionized States of America
We now live in the Unionized States of America -- a phrase that evokes how Obama and company have gone into overdrive to empower their union allies at our expense. Lee O'Hanian, a professor of economics at UCLA, weighs in at the Wall Street Journal on the dire economic implications of this tectonic shift in government policy, noting that employment figures remain very weak:
Those want more unionization claim it is necessary to raise wages. Instead it will further depress the economy. My research suggests that if unionization rates returned to 1970s levels (roughly in the mid 20% range of the private work force), and if new unions could achieve the same wage premium as existing unions have achieved over nonunion workplaces, then employment could decline by about 4.5 million and real GDP could fall by about $500 billion per year.Why? Unions raise members' wages by restricting competition, much as a business monopoly raises prices by restricting competition. Economists criticize business monopolies for raising prices above what they would be in a competitive marketplace, which reduces employment and output. Unionization reduces employment and output much the same way by raising wages above underlying worker productivity.Small businesses would be particularly impacted-about 55% of union elections occurred at businesses with 30 or fewer employees between 2003 and 2006. Negotiating costs are high for smaller firms, many of which do not have collective bargaining specialists in house. Add this cost to low profit margins, and expanding unionization presents a significant burden to these employers.