Monday, September 8, 2008

Union math

Education reporter Mike Antonucci writes today:

On Labor Day, the American Federation of Teachers released its ninth annual AFT Public Employees Compensation Survey. It predictably concludes that public employees are woefully underpaid, but I'll leave the usual arguments against such conclusions to others (fat lot of good it will do, anyway).

No, what interests me more is how AFT tries to square the circle regarding union representation. In one table, AFT compares public sector occupations in collective bargaining states with public sector occupations in non-bargaining states and finds that in virtually all cases, collective bargaining improves wages. One point for the union.

In a second table, AFT compares public sector occupations with the same occupations in the private sector and finds that in virtually all cases, working in the private sector improves wages. From this, AFT concludes that public sector employees are underpaid. Two points for the union.

Screeech! Once we're done applying the brakes, we apply a factoid of which AFT is well aware: Only 7.5 percent of private sector employees are unionized. How is it that non-union employees earn so much more for comparable jobs (by AFT's own definition) than union employees? And if unions believe they would be able to get private sector workers even more than they receive now, if given the chance, wouldn't that just increase the gap between public and private sector wages?

It's simple once you discard AFT's framing. In the private sector, wages are determined by market economics. In the public sector, wages are determined by political lobbying and tax rates. In the public sector, you'll earn more with AFT than without it. In the private sector, you'll earn more because AFT can't outperform Adam Smith.

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