The Cost of Coercion

Machinist workers in Seattle cheering after their contract with Boeing was ratified. The current accord expires in nine months. By BLOOMBERG NEWS Published: December 8, 2011

Unions are the backbone of our economy, of our Nation's middle class, right? I mean they protect the common man against fat cat corporations, right?

Let's check it out:

Four union walkouts at Boeing over the past 22 years (that's gotta be almost every new employment contract) have, according to Bloomberg, delayed literally hundreds of deliveries... Of course, as the union is fully aware, Boeing can ill afford another strike at this time...

Boeing therefore signed a four-year contract that will increase production in Seattle (will build a 737 there), guarantee 2% annual pay raises to members, provide a new performance-based incentive program, pay a $5,000 "ratification" bonus this month and avert a strike...

The machinists' union agreed to then drop its complaint with the National Labor Relations Board over a new 787 non-union plant in South Carolina, and its members will pay more for medical benefits...

So Boeing, hamstrung by the union, agrees to build a new jet under sub-financially optimal conditions (would've been cost-effective in South Carolina)... And you say; "who cares if Boeing is forced to put out more when it benefits hard-working Americans?"

Now you gotta ask yourself; who ultimately pays the price? "Boeing" you say... I say "nay"... well, maybe not entirely nay... I guess Boeing could go the way of the auto maker... But it's like anything else, you up the cost of a business's doing business and the cost gets passed onto customers, shareholders and, sadly, in Boeing's case, all those folks in South Carolina (assuming that's where they'd have gone had they their druthers) - the would've-been Boeing employees, the contractors and all the ancillary workers who would've built the new plant, and all the South Carolina businesses/consumers who would've benefited from all that efficiently-produced economic activity....

When the politician and the columnist/nobel-laureate-economist champion union's as the backbone of the American economy, as institutions to be coddled and protected, they never seem to consider the unseen side-effects of coercion... I wonder why?