As if unions haven't done enough...

Surely everyone remembers the union-engineered work slowdown New York City sanitation workers engaged in a few weeks ago in the midst of a snow storm.  In retaliation of budget cuts, many workers neglected to plow major roadways in protest; clearly showing their dedication to the plight of the common worker by making their commute much more dangerous.

The act alone is demonstrative of the kind of hypocritical mindset that is inherent to many labor unions.  While those who promote collective bargaining do so on the basis of helping the common worker, once a union has been established in a company, consumers as a whole end up losing.  George Reisman explains here (warning- its awfully long but worth the read) how unions demanding immediate higher wages correlates into higher prices for consumers in that the company must engage in short term bolstering of wages which leaves less money to invest in capital goods and long term profitability.  By losing money to invest in capital goods production, there are less opportunities for those unfortunate enough to not have a job.  Hayek explains here:

So what does the president of a country suffering from a 9.4% unemployment rate do?  Promote more unionization of course!  As Ralph Reiland writes today in Mises Daily, the National Labor Relations Board has begun to consider a federal rule which would force private employers to display pro-union posters in "break rooms or prominent locations."  Reiland then goes on to list statistics showing how the United Auto Workers have crippled General Motors.

From my experience in the Labor Relations class I took last semester, there tends to be no use in arguing economic theory with union proponents.  The idea of forcing evil managers and capitalists to pay you a $1 more an hour is just too tempting to consider any long term benefits and profitability a company and its workers could experience with flexible wages and hiring policies.

Public employee unions will be in for quite the surprise when the upcoming bond bubble bursts and many state and local municipalities face bankruptcy.  Tax increases won't be the easy answer either judging by Illinois Governor Pat Quinn having to exit through the state capital's basement after debating a raising of the state sales tax from 3% to 5.25%.

Update- Apparently Wisconsin has done the smart thing and decided to take business traffic away from Illinois.  When tax revenue begins to decline as businesses close shop and leave, Gov. Quinn is going to have to find some other way to appease the unions and not default instead of raising taxes. Too bad default, bankruptcy, and restructuring seems to be best chance at regaining fiscal solvency for Lincoln's home state.