Labor Unions: part III

I did not drop your arguments. Your point one was addressed throughout this debate and your point two was addressed in my point two. Thus, I'd like to state that the claimed "concessions" were not really concessions but merely not addressed because they were refuted in my own arguments. I. Labor Unions Increase Unemployment and Inflation Unionized workers do make more than non-unionized workers, "Estimates that correct these errors show that the average union member earns between 20 percent and 25 percent more than similar non-union workers."[1] "The money distributed as a pay increase comes from a company's contribution margin. This is the cash a company has left over after its expenses are paid from its gross revenue."[2] So the increases in wages come from the company's profit margin. This leaves businesses less money to invest in innovation and competition. "It has been a well-established fact that unions reduce the numbers of employed workers by mandating wages that move in an ever increasing upward spiral."[3] Unions do keep increasing the wages of employees. So it has been established that Labor Unions increase the wages of unionized workers and that these increases keep happening in an ever increasing upward spiral, and these two things lower the profit margins for businesses. But what needs to be established now is whether or not Labor Unions increase unemployment and inflation. First, unemployment. There are three ways Labor Unions increase unemplyoment. One, they increase wages to a point that the company is making a loss, and they have to lay off employees to get back off balance. Two, they decrease the profit margin of companies, reducing their ability to hire new workers. And three, they restrict the amount of labor available. We will look at all three ways in more detail now. If labor unions force companies to make a loss (which a lot of times they do), then they have to cut costs or increase revenue without raising costs. The only way to cut costs is to lay off employees. "Unions would like to negotiate higher wages as the alternative option for their members rises. This will only increase unemployment, the wage remains fixed in equilibrium."[4] Loss=Cut Costs=Lay Off Employees=Higher Unemplyment If labor unions force companies to make less profit (which they always do), then they have less money for improvements and for hiring new employees. "By mandating higher wages for current workers, they leave companies with less cash for new hiring."[5] "In such situations, cash for hiring new workers diminishes as does cash for R&D and capital improvements."[3] When companies make less profit, they stop hiring new employees and they stop investments and R&D. Less Money=Less Money to Hire=Fewer People Hired=Fewer Jobs Added=Higher Unemployment. Also, we must consider the effects of less investment and R&D. If a company has less money for investment and R&D, then they have to use older equipment and less efficient ways of producing. This in turn produces fewer things more expensively. This extra expense is passed on to the consumers, so they buy another product. This makes the company less money, and eventually, they will have to shut down. Also, labor unions restrict the amount of labor on the market, because in some instances, only unionized workers can be hired. This leaves the majority of the population unable to get jobs, which adds to unemployment. Now, inflation. "Furthermore, those high union-mandated wages result in increased prices for manufactured goods. It has long been an established fact that as labor costs increase, demand for consumer goods diminishes and the pool of consumers shrinks."[3] "Such a victory can have the impact of negatively affecting consumers: costs are raised as a result. If prices aren't raised, then other, non-unionised workers in that company will be exploited further to keep the bosses running, or the company will go out of business!"[6] The other thing businesses can do is increase revenue. This means higher prices. So at the end of the day, a company under the influence of labor unions has to constantly raise wages for its unionized workers. Either the company has to lay off emplyees, raise prices, or go out of business, and sometimes, the latter in inevitable. Also, look at the third graph in source 7. It is also the graph I used in our original debate [8]. According to, wages will always gravitate towards the equilibrium. When wages are raised, a business can either lay off employees of cut wages, and the latter is impossible, so the former is the only option. There is no third option. II. Labor Unions encourage sloth. I agree with my opponent that this part of the debate is philosophical, but I still find fundumental flaws in my opponent's argument. Let me ask you a question? If you could get the same reward by either doing nothing or by working hard, which would you, or to be more representative, anyone, would choose? Obviously, they would do nothing. No one would work for something when they can get the exact same thing for nothing. "...Labor unions promote laziness and apathy. Laziness and apathy cause businesses to go bankrupt."[9] My opponent has a flawed understanding of philospohy. III. Unionized workers take advantage of non-unionized workers. I'll repeat this again: "The average union wage is 28% higher than a non-union wage"[3] Higher wages for unionized workers. Higher wages for workers who do the exact same thing as other workers, but those other workers don't get higher wages is unfair. And plus, since non-unionized workers work harder than unionized workers (since, as I proved earlier, unionized workers can get away with not working while non-unionized workers can't), it is even more unfair the unionized, less hard working employees make more money than the non-unionzed, more hard working employees. Dosen't that sound unfair to you? And plus, when the company has to lay off workers due to the effects of the labor union, they have to lay off the non-unionized workers first, since the unionized workers are protected by the labor union. The only time a unionized worker can lose his job is when the company goes out of business. Dosen't the non-unionized workers being laid off first, even though they are the harder working workers, seem unfair to you too? And don't tell me that they deserve it because they did not join the union. They choose not to join the union because they don't want the company they are working for to be forced to shut down and they don't want to lose their job. IV. Labor Unions hurt the consumer. "Unions function as labor cartels. A labor cartel restricts the number of workers in a company or industry to drive up the remaining workers' wages, just as the Organization of Petroleum Exporting Countries (OPEC) attempts to cut the supply of oil to raise its price."[1] "Economists who study unions—including some who are avowedly prounion—analyze them as cartels that raise wages above competitive levels by restricting the supply of labor to various firms and industries."[10] Labor Unions are labor cartels. Again, as I said, unionized worker's wages are 28% higher than non-unionized worker's. Where do you get your numbers? Labor unions decrease productivity by keeping workers that are less productive and by firing workers that are more productive. Besides, even if they do, at the end of the day, when the company shuts down, productivity won't matter. V. Unions Have Laws that Take Away the Power of Bosses and Executives that Are Needed to Handle Bad Situations. Do you think not getting justice for a crime is a benefit? Really? I would like to thank my opponent for responding to this debate. My opponent does deserve the conduct point, but please do not base the convincing arguments points on my forfeit. Please decide by telling whose arguments are better. Sources: [1]:http://www.heritage.org... [2]:http://cwhitaker.hubpages.com... [3]:http://stephencabotblog.com... [4]:http://emi1777.hubpages.com... [5]:http://www.smartmoney.com... [6]:http://www.marxists.org... [7]:http://mises.org... [8]:http://www.debate.org... [9]:http://www.broowaha.com... [10]:http://www.econlib.org...