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Thomas Sowell On Unions

Doctor Toms Rant - Blogged

"The most fundamental fact about labor unions is that they do not create any wealth. They are one of a growing number of institutions which specialize in siphoning off wealth created by others, whether those others are businesses or the taxpayers.
There are limits to how long unions can siphon off money from businesses, without facing serious economic repercussions.
The most famous labor union leader, the legendary John L. Lewis, head of the United Mine Workers from 1920 to 1960, secured rising wages and job benefits for the coal miners, far beyond what they could have gotten out of a free market based on supply and demand.
But there is no free lunch.
An economist at the University of Chicago called John L. Lewis "the world's greatest oil salesman."
His strikes that interrupted the supply of coal, as well as the resulting wage increases that raised its price, caused many individuals and businesses to switch from using coal to using oil, leading to reduced employment of coal miners. The higher wage rates also led coal companies to replace many miners with machines .
The net result was a huge decline in employment in the coal mining industry, leaving many mining towns virtually ghost towns by the 1960s. There is no free lunch.
Similar things happened in the unionized steel industry and in the unionized automobile industry. At one time, U.S. Steel was the largest steel producer in the world and General Motors the largest automobile manufacturer. No more. Their unions were riding high in their heyday, but they too discovered that there is no free lunch, as their members lost jobs by the hundreds of thousands.
Workers have also learned that there is no free lunch, which is why they have, over the years, increasingly voted against being represented by unions in secret ballot elections.
One set of workers, however, remained largely immune to such repercussions. These are government workers represented by public sector unions.
While oil could replace coal, while U.S. Steel dropped from number one in the world to number ten, and Toyota could replace General Motors as the world's leading producer of cars, government is a monopoly. Nobody is likely to replace the federal or state bureaucracies, no matter how much money the unions drain from the taxpayers.
That is why government unions continue to thrive while private sector unions decline. Taxpayers provide their free lunch.



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