Biden’s New ‘Prevailing Wage’ Rule Will Cost Taxpayers, Benefit Unions, and Hike Inflation

“the changes are a significant step backward. Biden is effectively undoing a major change made by the Reagan administration—changes that were made, fittingly, to help combat inflation.
That change, made in 1982, repealed the “30 percent rule” that guided the process for determining what wages would be paid on which projects. Under the 30 percent rule, the prevailing wage for any particular area would be based on the highest wages paid to at least 30 percent of workers within the same area.

You don’t need an advanced degree in accounting to see how that mandate could artificially hike wages on federal projects. The government barred itself from even considering bids that might pay average wages, thereby obligating taxpayers to pay more than they might have had to in an open market.”

Teachers are striking for more than just pay raises

“Increasingly over the past decade, teachers unions are introducing what they call “common good demands” alongside salary and benefit requests during bargaining. These demands can include defunding campus police, offering more eco-friendly and free transportation options, shielding students from evictions, and more.”

The Rail Safety Act Is About Union Handouts, Not Safety

“After many years of working in the policy world, I have concluded that politics is at most 10 percent about making the world better and safer. The rest is at least 45 percent theater and 45 percent catering to special interest groups. Further evidence for my assessment comes from the recent grandstanding in the U.S. Senate on rail safety.
One reason why so much of what comes out of Congress is useless, if not straight up destructive, boils down to incentives. Politicians need something they can brag about when they seek reelection or election to higher office. Meanwhile, legislators are constantly surrounded by special interests who plead for government-granted privilege such as subsidies, loan guarantees, tariffs, or regulations cleverly designed to hamstring competitors. Politicians rarely hear from the victims of their policies. Few voters can trace the origin of the higher prices they pay and the lower living standards they suffer.”

Public Sector Unions Are Trampling Our Public Services

“The California Teachers’ Association is the most-powerful voice in education. Police and fire unions are the best-funded and most muscular political players at the local level. The prison guards’ union has an inordinate influence on corrections policy.
Unions aren’t entirely to blame for California’s myriad problems and crises, but they provide a heckler’s veto to any reform idea that could realistically improve public services. Consider how vociferously teachers’ unions opposed school reopenings. Lawmakers rarely propose any idea that would antagonize any of the state’s easily antagonized unions. Imagine running a business where the employees could immediately quash any proposal that might help consumers or reduce operating costs.

“Through their extensive political activity, these government workers’ unions help elect the very politicians who will act as ‘management’ in their contract negotiations—in effect handpicking those who will sit across the bargaining table from them,” noted Daniel DiSalvo in a 2010 article in National Affairs. No wonder California’s municipal firefighters earn on average more than $200,000 a year—even as the state complains about an inadequate number of firefighters.”

Unions Have Been Under Attack For Decades, But Michigan Just Gave Them A Big Win

“Michigan repealed an 11-year-old law that weakened unions’ power in the workplace. Known as a “right-to-work” law, this type of legislation has been around since at least 1943, and Michigan is now one of only a handful of states to ever repeal it.
When Michigan’s law passed in 2012, the state was firmly in Republican hands. The party held control of the governorship, state Senate and House, after riding the Tea Party wave to power. Conversely, this repeal comes a few short months after the Democratic Party — which has long allied with unions — scored their own trifecta for the first time in roughly four decades. Meanwhile, in 2022, unions reached their highest popularity since 1965. In the repeal of right-to-work, though, partisanship could play just as much of a role as love of unions does.

Because every worker covered by a union contract receives its benefits, private-sector unions are often allowed to collect fees from those employees regardless of whether they join the union. But the 1947 Taft-Hartley Act allowed states to pass laws — branded “right-to-work” laws — that would end that practice, and a flurry of states did indeed pass them.

The primary effect of the laws is to weaken unions in the states where they’re passed. Because workers can gain the benefits of unionization without paying for them, it creates a classic “free-rider” economic problem. Why pay union dues if you get the benefits anyway? As a result, unions often have fewer resources to organize and bargain with.”

“Proponents of right-to-work laws have long held that decreasing unions’ power in a state will entice employers and lead to more jobs, and that the benefits of added employment lift people out of poverty and increase job satisfaction. “There’s well-known stories about especially Southern states saying, ‘Well, we’re gonna give you a bunch of subsidies to support your investment, and also we’ll make sure there’s going to be no union,’” said Thomas Lemieux, an economist at the University of British Columbia who has studied the recent wave of right-to-work laws. However, studies suggest that that hasn’t led to wage growth or greater worker protections in those states. A common criticism about many studies showing the benefits of right-to-work laws is that they fail to control for all of the other factors that might lead to economic and job growth. “It’s certainly fair to have a debate about what are the costs and benefits of unionization,” Lemieux said.

Lemieux said that the jobs created tend not to include the benefits that unionized jobs bring, because the workers have little bargaining power. In states like Michigan, income inequality has increased as union density has declined; this appears to be because the presence of unions tends to lower the number of households at the top and bottom of the income scale. The presence of unions may also signal support for, and provides organizing around, other state policies that benefit workers, said David Kemper, the senior state policy coordinator at the Economic Policy Institute, a left-leaning think tank that supports unions. In general, right-to-work states scored lower on a number of issues, from wages to workplace safety conditions to political participation, according to a report by Illinois Economic Policy Institute.2 and the Project for Middle Class Renewal at the University of Illinois Urbana-Champaign.”

Public Unions vs. the Public Good

“Derek Chauvin, the policeman who killed George Floyd in Minneapolis in 2020, had a history of citizen complaints and was thought to be “tightly wound,” not a trait ideal for someone patrolling the streets with a deadly weapon. But under the police union’s collective bargaining agreement, the police commissioner lacked the authority to dismiss Chauvin, or even reassign him. The lack of supervisory authority resulted in harms that continue to reverberate in American society.”

The Supreme Court hears a case this week that endangers workers’ ability to strike

“The Teamsters, the union in this case, allegedly timed a 2017 strike so that it would begin after some of Glacier Northwest’s mixing trucks were already filled with concrete, forcing the company’s non-union employees to race to dispose of this material before it hardened in the trucks. But the company was able to remove this wet concrete from the trucks before they were damaged, and there are a wealth of cases establishing that workers may strike even if doing so will cause some of their employer’s product to spoil.
In one case, for example, the National Labor Relations Board (NLRB) — a kind of quasi-court that hears disputes between unions and employers — sided with milk truck drivers who struck, even though their strike risked spoiling the milk before it was delivered to customers. Another case, handed down by a federal appeals court, reached a similar conclusion regarding striking cheese workers.

That said, there are also some cases establishing that workers may not walk off the job at a time that could result in truly egregious damage to their employer’s business. In one such case, for example, a federal appeals court ruled that foundry workers who work with molten lead could not abruptly walk off the job and leave the lead in a state where it could melt the employer’s facilities or injure other workers.

In any event, the Supreme Court’s decision in San Diego Trades Council v. Garmon (1959) lays out the process that employers must use if they believe their workers timed a strike so recklessly that the union should be held liable. In nearly all cases, the employer must first obtain a ruling from the NLRB establishing that their workers’ strike was not protected by federal law. Only then may they file a lawsuit against the union.

The employer in Glacier Northwest, however, wants the Supreme Court to water down Garmon considerably, potentially enough to render that decision toothless.

If that happens, it would be a tremendous blow to workers. One important reason the Garmon process exists is that it shields unions from lawsuits that could drain their finances and discourage workers from exercising their right to strike — after all, that right means very little if well-moneyed employers can bombard unions with lawsuits the union cannot afford to litigate.”

Americans Generally Support Unions — And Averting A Rail Strike

“For most of the time since the 1930s, a majority of Americans have favored labor unions, but support began to decline in the 1960s, dropping from 71 percent in 1965 to 55 percent by 1979. After a slight increase, Americans’ support of unions hit a low of 48 percent in 2009. The share of private-sector workers in unions also declined steadily since the 1980s. This was caused by a multitude of political and economic factors — industrial deregulation, the rise of anti-union politicians, increasing globalization — but American workplaces also fundamentally changed. Employment opportunities moved from traditionally organized workplaces, like factories, into a service industry where union density was already lower. Many workers unionizing today are making coffee instead of cars, and issues like high turnover and irregular worker schedules in those industries led to job instability.”

“Americans largely favor the kinds of worker protections and benefits unions fight for. In general, Americans think businesses should treat workers with respect, pay fair wages and provide health care benefits. Sixty-two percent of Americans support a $15 federal minimum wage, and three-quarters of Americans think the current federal minimum wage, $7.25 an hour, is too low. Americans strongly support paid family and medical leave, a sticking point in the rail-worker negotiations. While the pandemic led to more states and cities mandating paid sick leave and 79 percent of civilian workers had paid leave available to them as of March 2021, the workers least likely to have it are the lowest paid.”