Morning Bell: How Big Labor Hurts You

Conn Carroll / May 22, 2009

Earlier this month, Service Employee International Union President Andy Stern told the Las Vegas Sun, “We spent a fortune to elect Barack Obama — $60.7 million to be exact — and we’re proud of it.” Stern should be proud of his $60.7 million investment. There is a good chance that thanks to the Obama administration, big labor will succeed in passing legislation that has the potential to reverse big labor’s decades long decline. And that will mean less jobs and a slower economic recovery for all of us.

Proponents of big labor argue that unions “give workers a stronger voice so that they can get a fair share of the economic growth they help create.” But that “fair share” does not descend like manna from the heavens. It has to come from somewhere. And that somewhere is the unionized firm’s bottom line. Studies typically find that unionized companies earn profits between 10 percent and 15 percent lower than those of comparable non-union firms. But big labor’s effect on the economy does not end there: (more…)