Overall, do union “big wins” really win? As illustrated by the Mercatus think tank’s recent working paper by Liya Palagashvili and Revana Sharfuddin, not so much. Together, the authors asked, “Do More Powerful Unions Generate Better Pro-Worker Outcomes?”
The answer was a resounding “no,” based upon data they drew from 147 studies on how unions’ pursuit of short-term “collective gains” frequently translates to “slower employment growth, reduced investment, and fewer opportunities for both present and future workers.” As the working paper further clarifies, the deterioration of the Rust Belt is a prime example of how union tactics devastated the manufacturing industry over decades.
As discussed below, several other industries have recently felt similar pain, frequently from unions “winning” short-term gains, including massive wage boosts that hurt workers in the longer term.
Higher Education: The United Auto Workers’ 2023 University of California strikes forced the school to cut graduate admissions programs and eliminate student-worker positions to make ends meet. Meanwhile, at Philly’s Temple University, increased labor costs meant the university could no longer afford to provide striking grad students with free tuition of at least $20,000 annually.
UPS workers: The last Teamsters contract struggle boosted many drivers’ total compensation and benefits packages up to $170,000 annually, which sounded unsustainable at best. Sure enough, 12,000 jobs disappeared, and more layoffs are now on the way due to tariffs reducing volume. Union chief Sean O’Brien is still insisting that UPS is “in for a hell of a fight” if they don’t conjure up 30,000 new Teamsters jobs.
Food service workers: The SEIU’s California lobbying caused the minimum wage to top $20 for fast-food workers in early 2024. This legislation immediately led to thousands of layoffs, hiring freezes, cutting hours, and eliminating positions as companies leaned into automation to help absorb higher labor costs. This says nothing of the waves of franchise locations that closed their doors, contributing to 10,000+ job losses within six months of the FAST legislation.
Auto workers: UAW President Shawn Fain was happy to crow about “record” wage boosts from 2023’s Big Three contract renewals, which led to “record layoffs” at Stellantis due to higher labor costs. How did Fain react? By acting like he has no idea why companies can’t “double every autoworker’s pay” and still make billions. Those Stellantis layoffs show no sign of slowing, thanks partly to Fain cheerleading for tariffs while continuing to insist, “They’ve got the money.”
Machinists: After a nearly two-month Boeing strike by 30,000+ workers represented by the International Association of Machinists and Aerospace Workers, a new contract included 38% raises. Several months later, the airplane maker had no choice but to cut 10% of its workforce.
That isn’t all. The Mercatus working paper provides further food for thought on the subject of unions pursuing short-term “big” gains at the expense of their members’ job security and the very industries these unions infiltrate.
