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Even though recent stimulus funds from the TARP program in 2009-2010 went primarily to...
Topics: Business, Labor Unions
Even though recent stimulus funds from the TARP program in 2009-2010 went primarily to protect union workers in education and at the state level, union membership continues to lag in the USA, particularly in the private sector. Why does union membership in the private sector continue to lag behind union membership in the public sector?
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Union membership in the private sector continues to lag behind union membership in the public sector and will likely do so for the foreseeable future. The reason for this is economic. Governments do not face the same kinds of cost pressures that businesses face.
One major kind of public sector union is a teachers’ union. These unions typically negotiate their contracts with school districts. What happens if a school district makes an excessively generous deal with a teachers’ union? The district does not go broke and have to close. Instead, it may raise taxes or it might cut some spending on extracurriculars. Either way, there is no huge damage done to the district. Unions can thrive because they do not kill their employers.
Now look at a private sector company. If it gives a contract that is too generous to its employees, its costs go up and its prices must go up as well. It is likely to be outcompeted by a non-union company. It loses its market share and it goes bankrupt. Businesses, then, have much more incentive to resist unions than government entities do. This is the main reason why public sector unions are much better off than those in the private sector today.
Posted by pohnpei397 on May 10, 2013 at 10:49 PM (Answer #1)
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