Today’s WSJ has a letter from a writer who thinks that labor unions are the key to prosperity:

Messrs. Biggs and Richwine have shown, without meaning to I’m sure, that belonging to a union is a good idea. They demonstrate that unionized workers earn about 30% more than their counterparts. This is in line with what labor economists, and some union leaders, have been saying for years.

The decline in union membership during the last few decades has been congruent with the stagnation in workers’ wages and with the increasing economic inequality in this country, and the authors show, in quite a convincing form, why this is so.

Daniel Levine

Brunswick, Maine

This is sheer lunacy. It’s not true that unionized workers always earn 30% more than non-union workers, although that may well be true among government workers. Evidently it does not occur to Levine to ask where all that additional compensation comes from. Are unionized workers more productive than non-union ones? If anything, it’s the opposite, since unions usually interfere with the efficient use of labor. The famously obstructionist work rules in union construction are a good example. So if the added compensation is not due to increased productivity, we have a zero-sum or even negative-sum game. The gains for the union workers must be offset by losses to others.

Who bears the losses? Some combination of the investors in the firm, consumers, and other workers in the private sector. (Union advocates want people to think that the gains are all at the expense of the “capitalists” and that’s simply doing justice; the trouble is that the less capital investment there is, the fewer high-paying jobs there will be in the future.) In the public sector, the answer is easy: taxpayers.

Simple-minded people may fall for the idea that unionization is a magic wand that can make almost everyone better off, but it is utterly false.