In our sixth installment of The Cato Journal’s January 2010 “Are unions good for America?” issue, we cover the sixth myth. In our sixth installment of The Cato Journal’s January 2010 “Are unions good for America?” issue, we cover the sixth myth. Here is The Homeland Stupidity web site’s synopsis of this myth, and a link to each of the 12 Cato articles.
Myth Number Six: Unions help preserve manufacturing jobs. Fact: Unions were a contributing factor in the decline of American manufacturing, especially in the automobile industry. Detroit makes a great example. At the start of the 20th century, Detroit was a boom town and its manufacturing jobs were paying 33 percent above the national average. Union organizers brought their message of capitalist greed and exploitation to already highly paid auto workers, where it largely fell on deaf ears. Until the Great Depression, when union organizers used a variety of underhanded tactics to force automakers, steel plants and other manufacturers to unionize. Stephen J.K. Walters, economics professor at Loyola, explains what happened next. Companies, squeezed hard and struggling to survive, would move their operations out of Detroit and other cities, and later, out of the country entirely: “ In sum, at the onset of World War II most of America’s great industrial firms — which, thanks to agglomeration economies were concentrated in cities throughout the East and upper Midwest — now faced labor cartels. These cartels needed some time to consolidate their power, so increases in employers’ wage costs would be significant but gradual. Further, WWII and its aftermath, during which time America’s industrial rivals’ productive capacity suffered heavy damage that would be restored only slowly, insulated the unions and firms to some degree and for some time from the most severe competitive consequences of monopolistic and opportunistic prices for labor. But the employers started to adapt immediately in ways that standard economic theory would predict — and that would ultimately help create what became known as America’s Rust Belt. Union actions, clearly, were not the only reason that industrial cities would decapitalize, depopulate, and become poorer in the second half of the 20th century, but they merit inclusion on the list.” If you’ve lost a manufacturing job any time in the last 50 years, thank your union boss for destroying your job, with a one-finger salute.
Download the PDF here. Check out the Cato Journal and access all 12 PDFs here.
