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Reforming Private Sector Unions

Unlike public sector unions, which are inherently corrupt and need to be outlawed, private sector unions have a vital role to play in American society. But these unions have become coopted by the same special interests they were originally formed to oppose. The political agenda of America’s unions is almost exclusively leftist, and being part of America’s institutional “Left” is not what it used to be.

The biggest misconception in American politics today is that the political Left is fighting corporate power. Leftists may still attack corporate profits and demand corporations pay their “fair share,” but on every major issue affecting the economic freedom and prosperity of working families in America, these presumed antagonists are actually in perfect alignment.

Labor unions, originally formed to defend the interests of workers, are no exception. Their decades of de-facto support for unrestricted immigration is a prime example. From the SEIU, “Stay strong against Trump’s wall!,” from the AFL-CIO “oppose H.R. 2, the Secure the Border Act of 2023.” Rather than protect the interests of American workers by controlling the borders, unions demand something that is impossible to achieve when borders are overrun with millions of immigrants, a “universal social insurance safety net and strong worker protections that bolster the health, welfare and economic security of all working families.”

America’s unions deny one of the most basic of economic truths, that increasing the supply of workers will result in lower wages.

There’s another basic economic truth that eludes America’s union leadership, which is that there are two ways to secure the “economic security of all working families.” The first is to collectively bargain and when necessary strike for higher wages and benefits. But the other, which truly will benefit all workers, is to support policies that lower the cost-of-living. Towards this second goal, unions have been actively hostile, because they have accepted the “climate crisis” narrative.

There is irony in the SEIU’s official position, which states that “climate change is real and poses significant threats to people’s health and livelihood, and disproportionately affects working people, the poor and people of color.” They’re sort of right. But it isn’t climate change, but the policies implemented to supposedly mitigate it, which disproportionately harm working people and the poor.

The position taken by the AFL-CIO on climate change exemplifies how opportunism has replaced a concern for the welfare of all workers. A June 2022 convention resolution states “In every forum, we will demand that clean energy technologies be mined, produced, constructed and operated under union contracts.” Just a month earlier, in May 2022, the AFL-CIO announced “We’re here for the signing of the Project Labor Agreement between NABTU and Ørsted—the culmination of years of hard work on a game-changing partnership that will change the trajectory of the entire offshore wind industry.”

The trajectory, overall, goes something like this: We will negotiate project labor agreements that guarantee our members well paying jobs working on projects that will greatly increase the cost of energy in America. In the case of offshore wind, that cost became prohibitive, when in November 2023, Orsted, the largest offshore wind farm company in the world, ditched its two planned offshore wind projects along the south coast of New Jersey.

Earlier this year, in August, another giant wind farm company, Equinor, pulled out of the Trollvind project in the North Sea because of unforeseen challenges including “technology availability, time constraints, and rising costs that made the project commercially unsustainable.” Also in August, Equinor sought “a 54 percent increase for the price of power produced at three planned U.S. wind farms” off the coast of New York. In the face of a likely denial, Equinor announced it could cancel U.S. offshore wind projects. In November 2021, Equinor abandoned a 1.4 GW floating wind farm off the shores of Ireland.

Wind farm developments, costing hundreds of billions to build at scale, only make financial sense to developers if they’re awarded massive government subsidies. But for big labor interests, fleecing taxpayers and punishing ratepayers so multinational corporations can make billions in profits on offshore wind is of secondary concern, as long as union jobs are created. Offshore wind projects typify the synergy between government subsidies, mega-corporations, and big labor that is the true motivating force behind climate crisis policies.

In California, a state that has completely succumbed to climate crisis panic, the High Speed Rail project fulfills all these criteria. The state is well on the way to spending over $130 billion on a system with ridership projections that aren’t more than a rounding error in total air and vehicle miles traveled each year by Californians, but it delivers thousands of high paying jobs to unions and lucrative contracts to the corporations they work for.

If unions don’t start fighting for practical infrastructure projects that lower the cost-of-living, expect more of these boondoggles. Another union supported project that will squander hundreds of billions in subsidies and raise prices to consumers is “carbon capture.” In a nation where production of natural gas and hydraulic fracking are under relentless assault, and nuclear waste is the boogeyman of the century, the consensus between government, corporations, and big labor is that we need to pump literally gigatons of CO2 exhaust into underground caverns every year. Go figure.

The only explanation for what is an otherwise inexplicable alliance between big labor and big corporations is a shared preference for economic centralization. Corporations in America stopped believing in competition a long time ago, if they ever did. But the innate corporate drive to expand and monopolize markets was challenged and limited by the power of the American Left. Today that balance has been lost. After the anti-globalization marches of 2000, and the Occupy Movement starting in 2011, corporations realized they could coopt the Left by assimilating their agenda on the broad issues of diversity and the climate crisis. And as they must have known, this has actually worked to their advantage.

In both cases, new barriers have been erected to exclude emerging smaller competitors. In every industry, the burden of hiring based on race and gender quotas instead of competence, and the expense of operating an expanded human resources department to enforce these quotas and fulfill the new reporting requirements, has given very large companies a decisive advantage. Unlike smaller companies, they can spread the expense over a much larger base of revenue.

This is equally true with environmental regulations, where the overhead and investment and additional operating costs necessary to comply will destroy the financial viability of smaller companies, at the same time as the big corporations easily have the resources not only to comply, but to buy up the smaller companies and further grow their market share. As for “renewables,” the more they cost and the more access to conventional energy is restricted, the more money pours into the industry from customers forced to pay the higher prices. The idea that major energy companies oppose renewables is ridiculous. It is in their economic interests to see the price of energy go as high as possible.

Unions support corporate consolidation and centralization of economic power because higher wages and benefits for their members become part of the overhead that drives smaller, non-union companies out of business. Big companies with captive markets are able to offer the highest compensation packages to union workers, because they have eliminated their competitors and can therefore pass the increased costs to their customers.

For unions in the United States to once again fight for the interests of all American workers, they will have to recognize hard economic realities. An unlimited supply of new residents in America will either drive down wages or overwhelm the welfare state; both of these outcomes are undesirable. Current environmentalist policies are too extreme, and while they benefit corporations, government, and labor unions representing workers in certain heavily subsidized industries, they are driving the cost-of-living out of reach for the vast majority of American workers.

Delivering an optimal standard of living to all Americans is only possible with controlled immigration, practical infrastructure investments, merit-based hiring, a regulatory environment that doesn’t wipe out competition between corporations, and policies with respect to energy and the environment that don’t inflict economic harm on working families. Unions might also recognize that most “renewables,” certainly including wind energy, biofuel, and battery manufacturing, are devastating to the environment.

These are facts that unions must face, and the agenda that unions should adopt. Such a reform is unlikely, but possible if they return to their founding principles. If unions were to adopt these principles, it would not only benefit all Americans. It would also restore America’s strength and enhance America’s standing as an example and an inspiration to the rest of the world, and offer again a model for other nations to follow.

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About Edward Ring

Edward Ring is a senior fellow of the Center for American Greatness. He is also is a contributing editor and senior fellow with the California Policy Center, which he co-founded in 2013 and served as its first president. Ring is the author of Fixing California: Abundance, Pragmatism, Optimism (2021) and The Abundance Choice: Our Fight for More Water in California (2022).

Photo: BELVIDERE, ILLINOIS - NOVEMBER 09: United Auto Workers (UAW) President Shawn Fain speaks to auto workers before the arrival of President Joe Biden at the Community Complex Building on November 09, 2023 in Belvidere, Illinois. Biden was in Belvidere to celebrate the scheduled reopening of Stellantis' Belvidere Assembly Plant and the settlement of the United Auto Workers (UAW) strike. Stellantis has agreed to build a new midsize pickup truck and open a new electric vehicle battery plant at the Belvidere facility which has been shuttered since February. (Photo by Scott Olson/Getty Images)