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I'm a hack

In this piece at the LA Times, I talk about how unions have declined steadily since 1950 (from about 1/3 to less than 8% of the private sector) yet the typical worker’s standard of living has risen steadily.

Yes, union defenders will point out that wages and salaries as a proportion of national income is falling. But that conveniently leaves out benefits. When you include benefits, the share of labor is steady over time.

Yes, union defenders will point out that average hourly earnings, corrected for inflation peaked in 1972. But that data series mismeasures inflation and leaves out benefits. Does anyone over the age of 50 (someone who is old enough to remember the 1970s) really think that the ’70s were the golden age of prosperity for the average American? Maybe, just maybe, the data are not reliable. Other series on wages gathered by the BLS show healthy growth since the 1970s.

Median family income has risen steadily since the 1950s and the 1970s. Union defenders will argue that incomes are up only because more families have two earners. But median family income for every type of family is up.

Bottom-line: it’s hard to argue that unions are the source of our prosperity. It’s possible to argue that our standard of living would be even higher if unions had remained strong or gotten stronger (though I doubt it). But evidently there are other forces that keep wages and incomes high without collective bargaining.

So where does the average worker get bargaining power if unions are in decline?

The simple answer is that bargaining power comes from having
alternatives. Even in the absence of unions, employers have to treat
workers well to attract and keep them. In a workplace as dynamic as
that of the United States, where millions of jobs are destroyed and
created every quarter, a company’s ability to exploit workers is
greatly limited by how easy it is to find another job.

it is competition among employers that protects us from exploitation.
Even those who would seem to be the most vulnerable — immigrants who
struggle to speak English, for example — can earn much more than the
minimum wage simply because of competition for their skills. Cleaning
people routinely earn $20 an hour, more than most cities’ so-called
living wage.

Kevin Drum over at the Washington Monthly jumped on that last sentence to honor me with the title of "Hack of the Day":

Today’s anti-union harangue in the LA Times by Russell Roberts is so mind-numbingly steeped in intellectual dishonesty that the Wall Street Journal’s
editorial board must be slapping itself on its collective head this
morning for not getting their hands on it first. It’s a work of art.

But it’s warm outside and I don’t have the energy to slog through
the whole sorry mess. Consider it an exercise for the reader. To get
you started, though, here’s one line from Roberts:

Cleaning people routinely earn $20 an hour, more than most cities’ so-called living wage.

Wow!  20 bucks an hour for mopping floors!  Except, um, here’s the actual data from the BLS from a few years ago:

Among janitors at all levels, nonunion janitors earned $8.60 per hour, 72 percent of the $11.98 earned by union janitors.

So not only do janitors generally make way
less than $20 per hour, but in the non-union paradise Roberts
recommends they don’t even make 10 bucks an hour. And benefits? Please.
Ask the janitors in Houston about that.

On the positive side, I didn’t notice any spelling errors in Roberts’ piece.  So at least the Times copy desk is on the ball.

I assume his facts are right. Only they have nothing to do with the point I was making. I didn’t say that the national average for janitors was $20 an hour. I wasn’t saying that it’s fun to be a cleaning person. I was trying to make a much simpler point. In many American cities, the going rate to have someone come to your home and clean your house is $20 an hour.

I’m sure you can find someone for less, depending on the city you live in and the quality of the  experience. I’m sure some are more expensive. But the people in the business of cleaning houses often speak no English. They have no formal skills other than an ability to work hard. They certainly have no union. So where does their bargaining power come from? How can they earn many times the minimum wage? The simple answer is that if you offer the minimum wage or even twice the minimum wage, they won’t show up. They have better alternatives.

To Kevin and others who have taken that line about cleaning people out of context, I’d encourage you to read the rest of the article and respond to the economics, particularly this indictment of the very essence of unions:

Unions help those they represent by trying to raise wages above what
they would otherwise be. To the extent they succeed, they reduce the
demand for labor in unionized shops. That means more workers have to
find employment in non-unionized shops, pushing down wages there.
That’s especially tough on workers with limited skills and education.
The sad irony of unions is that they can only improve the lot of their
members at the expense of other workers.

A better way to increase wages is to make workers more productive. That lifts everyone’s standard of living.