Do unions just make things cost more for everyone?

Answer 1

This is somewhat of a tricky question, because it depends on which side of the fence you are viewing it from. Unions have done a lot to improve working conditions and raise wages, but most generally this does cause prices to increase because there is not a corresponding increase in production. For a simple example if one person can produce one product in an hour for which he is paid $5 an hour the company basis their price of the product on that cost plus other operating expenses. If the union now comes along and say the production person must be paid $6 and hour the money to pay the worker must come from someplace. Perhaps the company can cut some expenses elsewhere or lay off another worker to offset the increase. If so then price of the product would not go up, if not then we pay more. This is a real tough question, but another question is the long term effect unions have on the economy if businesses feel they can not meet the demands some bad things can happen. The business can close, they can ship the jobs out of the country, they can import workers from other countries, or they can automate more and replace workers with machines. We have seen a lot of this with mining, steel, railroads, auto makers, and air lines as a few examples. However, we can not always blame the unions because there may be other factors involved as well. The simple answer is more pay for the same production does generally equal higher prices, but there is not always a simple answer to this.

Answer 2

You might think that Unions raise wages, thereby making the company uncompetitive and hiring fewer workers, raising unemployment.

In this view, Unions must be irrational, shortsighted .

On the other hand, management is assumed to be rational, longsighted and to what is right for the company. They lower wages, hire the right number of people, and treat the employees fair enough so that they don't go elsewhere.

However, it is not reasonable to suppose one group is irrational and another is not. According to economics, all agents are rational and do what they think is best for them. For a union to drive a company out of business is not consistent with economic theory.

There is also nothing to make management necessarily better informed than the unions. One could make a story that a union is better informed about the working conditions and some processes of a firm than management, or vice. versa. In the case where the union is better informed, unions can increase efficiency and thus make costs less for everyone.

By taking better care of workers, part of what unions have done in this country have made more efficient in the long run: things like better safety and health conditions, shorter work week, vacations, higher wages, have likely contributed in some way to productivity. One could also make the opposite argument that although a union must make a firm the most efficient to stay in business, it might lower efficiency just to that point and no more. This is consistent with stories that say unions raise costs to society.

Even if unions do raise costs, one might think, on welfare grounds, that we are better off with more safe work environments and more generous pay, health care and other benefits that unions have fought for over the years.

Answer 3

I'm in training to be a flight attendant for Southwest Airlines, and we just had our union briefing today. from what I understand they either do a good job or are just useless and cost money for everyone. All I know is our union made it so that we can get paid for completed training (and all of the members that negotiated for this DID NOT) and a lot of other great stuff!!

Answer 4

When I first looked at this, I thought it was asking if unicorns make things cost more for everyone. I was perplexed.

I guess if they existed, they would make things cost more for people who owned unicorns. I mean with the cost of unicorn food these days, it certainly wouldn't be cheap.

Answer 5

No. They also make some things (healthcare, retirement, etc.) cost less for their members.