HAT Manifesto Part 1/3 - Rubric Cube - 241201 revision

 

What If All Of Us Were Union Members?

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First, watch this short video “Do Unions Raise Wages?”

https://www.youtube.com/watch?v=S3EUrI63SnA

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Per Figure 1

If we all were union members our wages would be 10% higher, point B compared to point A.

But overall price level of products we buy would be 20% higher.

The 10% difference due to economic inefficiencies, union management salaries, and the amount of union members’ dues union management contribute to union-supporting politicians.

It’s better from the viewpoint of unionists that not all of us become union members

This is because non-unionists who are paid lower free market value equilibrium wage A have to pay for the unionists’ artificially high wage B through higher prices or taxes

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Most economists agree the demand for labor is relatively inelastic, meaning an almost horizontal labor demand curve.

With full unionization employment would substantially decrease, from D to C.

Total wages paid to all wage earners would go down.

Economy’s total wages paid before full unionization is the large area 0-A-E-D.

Economy’s total wages paid after full unionization is the small area 0-B-F-C.

So, from the viewpoint of general society it’s best if none of us are union members.

Prices are kept low at 1.0.

The economy grows rapidly due to economic efficiencies.

Wages are driven higher at a faster rate than prices.

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When the economy grows rapidly

· more profits and wealth are created

· businesses expand and new businesses start

· demand for labor increases, employment increases

· wages are bid up to higher levels

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Overall, unionists and everyone are better off without unionization, now and especially in the future.

Supporting unionism is both a narrow and short-run focus.

Fundamentally, unionists and all of us want better jobs, higher wages, and low prices not unions.