Are labor unions hurting the workers they are supposed to help? Many workers today are asking that very question.
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Take for example the UAW autoworkers of General Motors, who have been on strike since Sept. 16 and are now collecting a weekly paycheck of just $250. Over the last four decades they’ve seen dozens of auto plants close, and tens of thousands of autoworkers lose their jobs, as the unions’ demands for high labor costs and byzantine work rules hobbled the company.
To boot, a federal investigation recently exposed a “culture of corruption” among the UAW’s top brass, who took money that was intended to help workers and used it to finance their lavish lifestyles instead. The UAW isn’t the only union working against its members’ best interests. Since 2012, the Service Employees International Union (SEIU) has spent over $100 million trying to unionize the quick-service restaurant (QSR) industry – an industry I know a lot about having spent more than 30 years as an employee of McDonald’s. Their demands include a $15 minimum wage, “fair” scheduling, restrictive firing rules, and an easy pathway to get dues payments from hourly employees.
The SEIU so far has failed in its quest to unionize the industry, but its $15 per hour demand has wreaked havoc in other ways. Rising labor costs on the state and local level have forced QSR companies to embrace automated alternatives to customer service. Profit margins are tight and customers still love their value menus; the only way to maintain both is by using tablet-style ordering devices to reduce the number of employees on staff. McDonald’s will have kiosks at most of its corporate- and franchisee-owned U.S. locations by next year. Other chains have made similar pledges. Young workers who might have filled these jobs are no longer needed, they pay the price for the union’s workplace demands.
A 2018 study from the Mercatus Center at George Mason University identified higher minimum wages as the “predominant factor” explaining the decline in youth employment over the past two decades. The economists also conclude that there’s a negative impact on teens’ earnings in the long-run from this early missed opportunity.
I know this first-hand. I started as a grill man at McDonald’s many years ago; I can point to the skills I learned flipping burgers that I still used many years later when I become President of McDonald’s USA.
Today, I’m at the point in my career where I can help others get their start in the workplace, but I’m worried that union demands will block off valuable pathways to success.
I don’t oppose better pay and benefits for today’s workers. But the unions who represent them are often at odds with workers’ best interests. Rather than moving workers into the middle class, unrealistic workplace demands can block them out of it.