Are American Unions Increasing Poverty Rates?
American unions are a major cause of unemployment in the U.S. and they have greatly increased the number of children and families living in poverty by stunting the U.S economy.
In the Concise Encyclopedia of Economics, President Obama’s own former economic advisor Lawrence H. Summers said, “Another cause of long-term unemployment is unionization. High union wages that exceed the competitive market rate are likely to cause job losses in the unionized sector of the economy.”
There are reasons other than relatively inflated union workers’ wages and benefits causing an undeniable increase of outsourcing and overseas placement of production facilities from this country – for example high taxes and government overregulation. However, the AFL–CIO, national trade union center, the largest federation of unions in the United States, and other large unions, are major culprits.
While American steel companies, automobile production and other traditional industries continue to downsize and increasingly outsource production of components, unionized Green companies like Solyndra are failing within months of receiving massive, low-interest loans from the federal government that amount to taxpayer-funded union slush funds. Solyndra was touted as a successful Green company by President Obama months before the company went belly-up and left taxpayers to pay the company’s half-billion-dollar government-backed loan. Solyndra claimed it could not compete with foreign companies but where the government money went is the subject of an ongoing FBI investigation.
In the U.S., unionized workers are on average paid much higher wages than non-union workers and generally receive superior benefits and pensions. The result of such artificial wage inflation through union negotiations, strikes, political campaign donations and sick-outs is that American companies lose the ability to compete with foreign companies. The relentless phenomenon of economically downsizing America is no longer a 600-pound gorilla that voters can simply ignore. American companies are moving entire operations overseas and outsourcing jobs to foreign companies leaving more and more union workers and non-union employees standing in the unemployment line or permanently unemployed. Many recent polls indicate that Americans’ patience and empathy for union strikes and protests are wearing thin.
States like California are choosing Chinese companies to supply major U.S. infrastructure because unionized American companies can’t compete. For example, over $6 billion of a $7.2 billion contract to rebuild the Oakland –to-San Francisco bridge was awarded to the Chinese because unionized American companies could not successfully compete. The massive steel work for the bridge was built and assembled in China and shipped to California on Chinese vessels while American unionized companies sat on their hands. Americans were relegated to assembling and paving the complex new bridge.
If unions remain strong, expand and continue to demand inflated wages and benefits for union bosses and their workers, an ever-more globalized economy will continue shrinking the share of jobs available to unionized workers and other Americans.
The results will include permanently higher unemployment, soaring government deficits, double-dip recessions and further increases in American poverty rates. The situation will surely become more severe for the U.S. and most of Europe as more developing nations offering the same products for less enter a global economy in mass.
Unionization is the 600-pound gorilla in the unemployment line and it doesn’t discriminate between union workers, non-union workers or small businesses.
Larry Clifton,
Guest Contributor
Employee is less that 5% of a new car. Non Union Auto Companies (Toyota, Honda, etc.) hourly wages are very close to UAW hourly wages. The differences is that GM, Ford have a higher legacy cost. Unions are a necessary evil just like the Government is a necessary evil. Unions are needed to keep the Companies honest. People working for non union companies should thank Unions for the wages they make. The government has already busted the airline union and now pilots live below poverty level. I have also seen first hand what company will do if not kept in check like the coal mines only paying employee’s with company money that can be spent at the company store. Working in condition that are dangerous and you question the safety you are fired. The problem is that Upper Management CEO make bonuses even if they do a poor job. and their salary is comparable to Pro Sports players.
It is shocking to read that so many people just don’t get it. It’s as if we want America to become 3rd world. A car company in the US tries selling it’s product in China and China tariffs the car almost double the price. China make crap. the steel they make is weak. So to the one comment that said China will build the bridge in California, good luck driving over that. And lets not for get all the lead paint baby toys that China is sending over here, poison dog food, 53,000 Children Sick… 4 Reported Deaths.. after drinking China Milk. Just Google bad products made in China.
So bust the Unions and you will be working for minimum wage and in an unsafe environment.
Unions brought us the middle class and when they are gone so is the Middle class. We will be left with the Very Rich and The Very Poor.
this is typical political propaganda. blaming labor and not even looking at the rampant mismanagement that
are not held responsible. you want to bring the u.s down to 4th world countries levels of standard of living.
Fox and Friends ??? Anyone remember when they REVERSED 2-to-1 poll results to wrongly suggest that most Americans were opposed to Wisconsin public workers’ unions? ( http://www.rawstory.com/rawreplay/2011/02/fox-reverses-poll-results-to-portray-public-as-anti-union/ ) I’d prefer we quote reputable news sources and stay on the topic of government fraud, waste and abuse.
Yeah, people, you have to abandon your union job and be willing to work for $37 a week so we can “compete” with the Chinese!!! Unions may be outdated and obsolete but at the time most were established, they were fair and had a purpose. I guess a case can be made that they no longer do. But if people at the top have become insanely more wealthy over the past few decades, can you really blame the union workers for all the wealth in the country evaporating? Many corporations have raided the health care and pension accounts of union workers to pay the top executives multi-million dollar bonuses. The trends and numbers are not easy to parse out but taking a lopsided view of things certainly does not address the problem.
Could it be a coencidence that you conveniently forgot to mention your cherished unions are doing the exact same thing? Let’s not forget too that they are MAJOR contributors to the Democrat party.
Unions had a purpose in the private sector for the most part but now they are an anachronism, especially when it applies to public workers.
I beleive it should be illegal to award government contracts for infrastructure, military components, etc. overseas at a time when we need to grow our economy. Tax dollars need to stay stateside when possible even if the bids are higher. My non-union job was eliminated when a paper mill reduced its operating capacity even though the mill was profitable. The mill was the largest employer and tax payer in the county. The loss of the “high paying” union jobs has devistated the county financial situation. Any chance we can evaluate the trickle down benefit during the bid evaluation process and not blame the workers?
phrowt,
You’re right about the problem being both parties, and believe me there certainly needs to be at least two parties or we would have a Dictatorship. However even with two parties we have a Dictatorship when popular vote means nothing. This article is throwing stones at the Unions when it needs to cast the stone at our own American people for not standing up and demanding our government to stand up for the American People. But when you are in debt to an entity it is hard to stand up against it and demand anything. I believe that is being a slave to that entity, which as a Christian and living in what is suppose to be a Christian Nation is what this country has become to China (a slave ). And I also believe that China is a country that is under a Dictatorship. So one other point we should not be unequally yoked… and we are. So maybe we have actually strayed away from what this country was founded on and maybe we should try to direct OURSELVES back to that…CHRISTIANITY. No it is NOT the Unions we are at war with for this country it is the war we all fight DAILY that is the WAR of the DEVIL. And he takes the form of many different things. It is just easy to point the blame to something other than ourselves…. isn’t that what Adam did at the beginning (…the woman )?
“Ask not whether you love your country ask whether your country loves you”. Loren Estes Thursday, December 29, 2011.
The point here is we are a stupid people and we have been conned for the better part of a century now. It is not hard to find out that we have been taken for a ride into poverty. You and your family are being taken to the sewer by your government and there is nothing you will do about it. I say sit back and relax. Enjoy the view while you watch your families lives be destroyed by a corrupt government. It’s ok, it’s not your fault that you cling to false information.
Call centers. I’m not certain, but they aren’t unionized, are they? Seems that many companies have moved their call centers over seas. India comes to mind. And just for somebody’s info: Richard Milhous Nixon was the 36th US Vice President under President Dwight Eisenhower, serving from 1953 to 1961. He lost the Presidential election of 1960 to John F. Kennedy. He was elected as the 37th U.S. President in 1968 and took office on January 20, 1969. Re-elected in 1972, Nixon resigned from office in 1974.
Read more: http://wiki.answers.com/Q/Who_was_the_President_of_the_United_States_in_1970#ixzz1hx6JlpVU
Reagan started in 1980, didn’t he?
The union stranglehold on US indusrties has forced manufacturers to relocate either offshore, or move entire manufacturing facilities to our Southern states that have “Right-To-Work” conditions. Numerous foreign auto makers, like Toyota, Honda, Mercedes and others have all built facilities in Georgia, North and South Carolina, Alabama, Mississippi, and Arkansas. And, they pay very good wages and benefits! The UAW organizers have tried to get in and the workers overwhelmingly vote a resounding “NO!” Don’t NEED the union dues and “Work Rules.” Anyone seeing a burned-out lightbulb can change it out. No, they don’t have to summon a licensed union electrician to replace it.
I’ve been in industrial sales for almost 50 years, and have watched as mumerous of my clients have gotten full-up of union battles and losing THEIR customers due to being non-competitive. I am losing my biggest customer next year when they relocate to Georgia from Chicago. Too many taxes, too many union problems, too much state and local regulating, and they’ve finally decided that too much is TOO MUCH! It’s all about the bottom line. If a company doesn’t make a profit, they won’t stay in business.
This customer has been in business in Chicago more than 50 years. At one time, not that many years ago, they employed over 200 people. They are down to less than 50. Another customer moved Lock, Stock, And barrel from Elkhart, Indiana to South Carolina 20 years ago. They once employed 350 people. They are doing very well down there. The former union employees, UAW, are ALL on the street doing menial jobs at half what they were prior. But, they sure “showed” the company, didn’t they!
The auto makers who relocated down South find good, qualified worker forces, and states that are just loving the influx of new revenue. The “Rust Belt” continues to corrode and jobs continue to shrink. The “Big Three” have closed dozens of facilities and laid off more than a hundred thousand union employees in order to stay afloat. And, they WILL!
The latest figures (2010) show that 11.9 % of american workers are union. That equates to 14.7 million workers.
Also, all american workers in the health field equate to 14.3 million people. I am just trying to put the numbers of union workers in perspective.
company’s that are non union are moving overseas to exploit the people over there and pay a rate of what is equal to less than poverty wages here, so CEO’s can keep their 6-7 figure packages and bring the bottom line up so stock holders are happy, and lets face it most middle class people I know are not even close to medium stock holders, let alone major stock holders. So it is all about the upper CRUST making more and keeping the working class with not quite enough, so we will work for less.
I didn’t think11% of the people ( which is the unionized sector) could have such control and hold a country hostage, I always thought it was the rich, bankers and politicians doing that for us……silly me
In truth, most of the middle class has a big stake in stocks.
Pensions finance themselves primarily by what they can earn on their stock investments. (One reason pensions are having a hard time surviving is that governments are making it much more difficult for businesses to provide decent earnings to prop up stock values.)
Insurance relies on stock investments to pay claims. Premiums paid by those of us who are insured do not pay nearly all the costs of insurance. If businesses do not make profits, insurance will not be available or will be many times more costly.
And don’t forget the roads, bridges, airports, and all the other things governments provide by taking from Peter to pay Paul. If businesses are going to be forced to pay taxes, the businesses have to make profits. No one is going to work their butts off if they do not get decent pay — that’s all profit is.
I agree that unions aren’t needed if the employee treats you like a human. Other wise unions are a necessity to keep the employer honest. As best they can. If we all just make a bare minimum wage then ok! But bowling stops, four wheeling stops, skiing stops, movies stop, house buying stops! Come on people don’t you get it?
The other day I sat beside a smug union retiree telling me how he drove to work for an hour and can’t get his nephew to work the way he did.
Now pulling in 4k a month + SS for doing nothing but going over to his sisters and giving the youngsters an uppity hard time.
‘He would work for peanuts if he had to’ he says but then he never did.
His nephew has no chance of ‘making it’ in the union guys eyes because he will always only receive a small
portion of the wage and will never get the benefits.
If he should try a business larger than the flea market he will have a tax man standing beside him his entire endeavor making sure he misses no chance to pay taxes to the union guy doing nothing but standing alongside and collecting taxes. It’s disheartening and impossible to pay all the demands of nonproductive retired union types that my government promised to pay from any smidgen of money I may produce.
in what hypothetical situation is a union members retirement payed by taxe?, other than public workers whose pension funds should already be paid to an account before they retire. Private sector retirements are not paid from taxes of any kind. i suggest you study your facts before you spew out such as this. By the way, which Republican propaganda did you get this from?
Rick,
Let’ see, your tax rate in the USA is 35% and somewhere else is 9%, and you are not going to move ?
Why have the 2 smart American political parties been so stupid to “allow” American jobs to be “lost” to overseas? Why has the world’s greatest democracy been so foolish to do things which hurt American interest? There must have been some people in America who have benefited from this process of creating jobs overseas. Who are they?
Not a doubt unions were a godsend to the workers in the early 1900s. But today the unions have priced themselves out of the market. worse yet the public service unions can vote themselves raises by supporting the candidates that can affect their wages. This is wrong .
This administration is easily the most corrupt that I have seen in my 72 years on this planet.
The democrats in general are totally repulsive but unfortunately, the Republicans are not that much farther behind in the measure of “wheeling dealing.”
This in turn does not leave much room for encouragement….
I agree that the unions have forced companies to either go out of business or outsource parts of their business. Wake up people. This is a GLOBAL ECONOMY NOW. We have to contend with not only competition in the USA but worldwide. I have worked with union people all my life BUT, I am not a member of any union, nor would I ever join one. I have seen first hand how favoritism and promotion are rampant in unions. People are promoted or moved to a job that they can not do because they have “kissed up” to some union boss. Wages for union people are outrageous (almost as bad as Congressmen) and yet the union reps DEMAND the owners pay more and more. I have witnessed two local companies go out of business because the unions DEMANDED that the owner pay more in wages and benefits despite the owner saying and showing that they could not afford to do it or they would go out of business. The owner gave a final offer (a mere pittance, according to the union reps). The owner stated that they would have to either take this offer or he would shut down the business forever and they wouldn’t have to worry about negotiating any further contracts for employment. The union reps, of course, got the members to turn down the offer. I call this bullying, don’t you ? Well, the owner kept his word and told them that rather than he personally go bankrupt he was closing the business and they would all have to go find jobs. Now 255 people were out of work. Now what are the unions reps doing for their former members ? Many of those former members lost their homes because they couldn’t pay the mortgages. It turns out that their outrageous paychecks were no match for unemployment checks.
Now, a whole manufacturing plant is gone and their machines sold off (probably to a foreign company where they WILL make the parts and sell them back to the USA).
I agree that unions HAD their place but it was a long time ago. Back when a company would ride shotgun over it’s employees, unions helped to get fair treatment and liveable wages for the employees. Today, we have laws in place that protect the employee from work hazards to healthcare to harassment to fair wages. You don’t need the unions for that, they are already there.
Former President Reagan did the right thing when it needed to be done with the union demands for the Air Traffic Controllers back in 1970. Look it up. That was a safety issue but it was showing that the unions thought they could “bully” even the Federal Government.
Wake up people. This is now a global economy and if you can’t compete because the unions are demanding higher and higher wages and benefits, eventually you won’t have to bother going to work because the work will be in some other country.
Nuf said.
It has always amazed me that major unions: UAW, AFL-CIO, UNITE scream so louder about profit hungry business and then through their own actions cause either the downsizing or bankruptcy of the business. The former BIG 3 automakers became so bloated with special union rules, actions, etc that outsourcing, plant closings, etc took a huge toll on the US economy–and this was 20 years ago! The belief systems then became that Americans cannot compete nor make quality automobiles; therefore, the union “won” its strikes but lost membership and more importantly membership DUES. If UAW American auto plants cannot make quality products, why is it that over 85% of the world’s automakers have built and are building manufacturing and assembly plants HERE in America! Do you think that your Toyota or Honda or Mercedes C class or Honda motorcycles or BMW 3 series or Subaru or Nissan all come from Japan or Germany? They do NOT! All are made here in America with American workers, American Engineers, American Management. Toyota and Honda EXPORT their cars BACK to Japan! What they DON’T have is bloated total compensation of over $40 per hour, work rules demanding 12 workers at one location when the work is being done by only ONE worker while the rest either sleep in the inventory racks, watch TV, or simply slip out and go to their REAL job for 8 hours (and also collecting their UAW 8 hours pay even though they were not even in the building). Yes Unions have basically destroyed the American workplace and workers as this Boomer generation retires and should realize what they have done in their collective greed! Therefore, the question begs “can America compete in a Union environment”; the answer is “as structured today (just as it has been for 40 years) NO”. “Can America still compete at all?” The answer is a huge YES! Why do you think so many companies from so many countries have re-located to America? And every one of them has had to fight to stay Union Free and oft times the fight is against the very Government that had welcomed them to America with incentives! DUH! How long or what must happen for our people to actually see and understand what is happening, what has happened and most of all what is going to happen? What is coming is so much worse than the 1930′s Depression–what is coming is the “GREAT” one while the 30″s will be but a small recession. After starting my work life with a UAW facility and ending as Senior Management of non-union facilities, I have seen thousands of people, families broken; I have seen Detroit become a city of Death and no hope; I have had to close plants myself and it is the most gut wrenching action Management can ever make, but then it gets easier as the company finally begins to prosper from jobs in other countries; restructuring itself without a Union and coming back strong.
The Unions without question helped to build the Middle Class; it also has greatly contributed to the end of the Middle Class and the rise of a “Us vs Them” culture.
Finally one reflection on Companies: in the last 15 years GREED pure GREED has taken over “the suits”. They are the primary cause of “Us vs Them” for they have NO clue what it is to really live in this Country; to clip coupons to buy food, to wake up each day either still unemployed or still worried that you will be. Yes pure GREED! It is such a shame that the average worker bonus on Wall Street (not upper management) will average “ONLY” $100,000; down 50% from last year; or the CEO whose company’s stock has dropped 50% and still cashes a bonus of $34 million; or the CEO who took the Fed “bailout” paid his top management and himself with that bailout and then went bankrupt. Gee Christmas must have been tough for those people–a measly $100,000 or $34 million that they really did not earn.
It is our form of government that gives rise to all the excesses. Plato, 2000+ years ago, stated that democracy would inevitably evolve into chaos. He is correct. We’ve had 200+ years of stability in balancing many competing interests, but we are now past the “tipping point”.
@ Rick Farley; Rick you are crazy. Unions have destroyed the upper mid-west and the steel and iron industries in place like Pennsylvania, Indiana, Michigan, etc. Also the auto industry has been ruined because of unions ridiculous demands on employers. Here’s my plan; get a job, work hard, ask for a raise by your self, go to work everyday, and be an proud employee, not a piece of crap whiner. Right to work supporters don’t need some union mob to speak for us. We work hard, and that speaks very load to our employers.
I live in Arizona(a right-to-work state).What happened to WYSER LOCK CO.?It got moved to Mexico and the workers from AZ had to go to Mexico to train there people.No union involed.
Larry, unions are about a lot more then higher wages! In fact, a lot of unions, i.e. the UAW, have brought new people in at much lower wages to keep themselves going. As Rick Fairley said, both parties have been allowing overseas shipping of our jobs. You do forget that during the Bush administartion they gave tax cuts to corporations to SHIP JOBS OVERSEAS! Our own Teabagger candidate in my state, Sharron Angle, was one of those who also voted for that! Sorry, but you give tax credits to corporations to KEEP JOBS HERE! I also understand the anger of the NLRB for not allowing a plant to be built in South Carolina because it would likely not be a union plant. That’s messed up, yes, and that needs to be stopped, but unions ARE NOT the entire problem here!
I’m a retired UAW,and am grateful for the pension,the paid holidays,the health & dental that i am recieving all because the union fought for us employee’s.
I believe the article said that unions were part of the problem. They are!!! If the trade laws are unfair as you say, then I will add to that by saying that union wages are unfair. They are not competive in the slightest to a fair market model. John Gait is leaving the country…..
Unions are a freaking crock. My husband works for one and they can hardly keep him employed because they have too many workers on the book. You can’t work for anyone else or they fine you, they work him JUST under the 90 day mark and then lay him off so we don’t get insurance benefits. I wish they would out law them all.
Seriously? The biggest Union of all that has yet to be terminated is GOVERNMENT. It was not the Union of American Workers that caused the collapse of our economy. The Union of Civil Workers that continues to be the last of the surviving unions in the United States caused the collapse of the economy because these Civil Union jobs are ALL paid by taxpayers! It was NOT the Union of workers for worker’s rights that collapsed the ecomony. It IS the Union of government workers that did not pay heed to the taxpayers that paid for their jobs that caused the collapse!
We have more problems than you bashing unions.The last I heard heard unions only made up about 6 % of the work force.The problem is with both parties allowing our jobs to move over seas with these bad unfair trade agreements.So Fox News need to back off the unions.It’s getting hard to watch Fox & MSNBC news anymore.We just ask for the truth not both sides of the news spreading lies & what they want us to hear.This go’s for both sides job creators.It’s almost funny!The only jobs they have created has been over seas.
If the Unions only make up 6% of the workforce, why do the Democrats let them influence so much legislation?
Don’t know about that 6%; seems very low to me.
But, between highly-paid and extremely costlybenefits for union workers, and very highly-paid
Govt. workers, this country simply cannot compete with many foreign countries; China
being the greatest competition.
That is a FACT. Take it any you want to.
You say both parties are ‘allowing’ jobs to move overseas. I hate to see that, too.
Would appreciate your views on how a Govt. can stop a company from moving jobs
to foreign countries, so long as those foreign countries have valid trade agreements
with the usa.
Wrong, the jobs created by this group of the inept in Washington (both parties) is Government jobs that depend on a dying tax base. The unions contribute by letting their dues be used to keep the self-interested in office. You are living in fantasy land if you think they (or the union bosses) have your interest in mind. VOTES, VOTES, VOTES is what it is all about to keep them in power no matter the side they are on.