by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Even if union activity leads to harm for the economy as a whole, unions lead to benefits for workers themselves, don’t they? Sean Higgins of the Washington Examiner focuses on the portion of a recent study that questions that notion.
Heavy unionization cost the average worker in Michigan about $11,000 over the last 50 years. It cost workers in Nevada about $9,000 over the same period and Ohio workers about $8,600.
That’s the conclusion of a new study by the Competitive Enterprise Institute released Tuesday. The study argues the losses were consequences of unions driving up labor costs in those states, thereby reducing overall economic growth in the state.
That flies in the face of the conventional understanding of unionization that it benefits workers overall by raising wage levels. The authors argue that this effect also has unintended negative consequences.
“[T]he presence of labor unions that operate as bargaining agents in the process of collective bargaining has the potential to seriously inhibit economic growth in the several states and the District of Columbia,” wrote co-authors Lowell Gallaway and Jonathan Robe. Gallaway is an economics professor at Ohio University. Robe is a researcher and college student.
The study examines changes real per capita income between 1964 and 2011, while adjusting for union density, inflation and other factors. In the case of heavily unionized Michigan, the 1964 level was $21,915. By 2011, it had risen to $37,014. This meant “an absolute reduction in real per capita income amounting to $11,111 during the period.”
States with low union density had much smaller losses. South Carolina’s, for example, was $1,238.
CEI labor policy scholar Aloysius Hogan concludes from the study that the passage of the 1935 Wagner Act, which made boosting unions the official policy of the U.S., has caused “long term economic trauma.” States can alleviate this by passing right-to-work laws, he adds.