Advancing a Free Society

American Labor Unions: Underpaid, Overproductive or Overpaid?

Tuesday, July 12, 2011

Let me begin with three quotations used in defense of unions and of higher union wages:

Our entire economic system rests on the principle of paying someone less than his or her labor is worth.

There are reasons (unionized) workers in the North get $28 an hour while down in the South they get $14 or even $10. Adam Smith could explain it: "productivity," "skill level," "quality."

Unions make the middle class. Without unions, the middle class withers.

The first quote tries to convince us that we need unions to correct injustice. Without unions, greedy capitalists pay workers less than they are worth. The second argues that unions make workers more productive and help employers and the economy as a whole. The third maintains that only unions can raise new entrants into the middle class.

None of these arguments holds water.

Continue reading Paul Gregory…

(photo credit: Bernard Pollack)