Ingram: Unions are past their prime

Published August 23 2016

As we approach Labor Day, millions of Americans will celebrate the day known more as the unofficial end of summer than as a celebration of America's labor force.

That may not be such a bad thing, as labor unions in America have passed their prime as a necessary negotiator for employment rights and wages.

Arguably, if there were a tremendous need for American workers to join a union and contribute a portion of their salary to support the union and its bosses, American workers' appetite for membership in such organizations wouldn't be on such a significant decline.

According to the Bureau of Labor Statistics, the share of wage and salary workers who were members of unions was 11.1 percent, representing 14.8 million workers, in 2015. That compares to 20.1 percent, or 17.7 million union workers, in 1983, the first year comparable data was available.

As a percentage of workers in a labor union, that's a slide of nearly 50 percent, which no doubt has the union bosses wringing their hands and asking themselves, "What's gone wrong?"

What's gone wrong is, labor unions and their fat-cat bosses got greedy. Take what happened in Detroit as an example. Union greed resulted in lavish contracts with fancy "Cadillac" health plans, overly generous retirement plans and wages that far exceeded the skills of the workers working on the assembly lines in factories at General Motors, Ford and Chrysler.

In 2008, the Associated Press reported that "the average United Auto Workers member makes $29.78 per hour at GM, while Toyota pays its (U.S.) workers (most of whom are nonunion) about $30 per hour. However, when total benefits (including pensions and health care for workers, retirees and their spouses) is factored in, GM's total hourly labor costs is about $69, while Toyota's is about $48."

Those excessive labor costs were a driving factor in the Big Three automakers' inability to compete with foreign automakers who had lower wage costs.

While it can certainly be said other factors caused GM's demise, including low-quality products no one wanted to buy, it can also be argued that GM's labor costs prevented the company from reinvesting in new technologies, design improvements and new factories that yield better cars.

After a significant government bailout, GM is now on the road to recovery due in part to the lower wages of its workers. According to Reuters, hourly labor costs at GM now average about $58 — $11 less than they were in 2008, but still $10 more than Toyota's. That $10 disparity adds about $250 to the cost of a GM-manufactured car.

Progress takes time, and GM is heading in the right direction. As part of the government bailout of GM, the UAW's Retiree Medical Benefits Trust became a major GM shareholder. Partial ownership forced the UAW to look ahead to the long-term health of the company as opposed to just the short-term interests of its members.

Other manufacturers such as Toyota and Honda make quality cars in the United States at state-of-the-art plants located mostly in the South at nonunion facilities. Those factories and the nonunion laborers who build the cars have shown that the days of needing unions to represent workers for fair wages and workplace safety have long since passed.

Still, labor unions continue to exist and negatively impact employers' ability to operate efficiently, effectively and affordably. Here in Tampa Bay, teachers unions wield a heavy hand on local school systems and principals' ability to fire incompetent teachers. A quick Google search of "fired teachers Tampa" yields news reports about just how rare it was to fire a teacher under the old tenure system, which was abolished in 2011.

In the four years following the end of tenure, teacher resignations and firings shot up in Hillsborough County public schools from 611 to 1,503, according to the school district. But even under the new rules, unions have undue influence.

As we celebrate Labor Day this year, Americans should pause to celebrate the contribution of unions in ending sweatshops and low wages workers faced generations ago. They should also rejoice in knowing the current decline in organized labor unions means the free market is working, but there is still work to be done in dismantling the one-sided interests of labor unions and the workers they represent.

Chris Ingram is a columnist, Republican political consultant and political analyst for Bay News 9.

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