When Unions Cause Unemployment
Back in October of last year the United Steel Workers Local 566 of Bismarck put 780 workers on strike against the Bobcat company. The picketers were demanding a payraise plus total health care coverage, and they resorted to thug tactics like throwing nails under the tires of buses carrying replacement workers (something that prompted Bobcat to get a restraining order against the union goons). Eventually Bobcat caved and gave the workers a pay raise and expanded health care coverage, though union chief Steve Chmielewski said he was “disappointed” with the expanded health care coverage.
Regardless, Bobcat clearly gave the 780 striking workers a pay raise and more health benefits.
Now, about two months later, Bobcat is announcing about 155 firings at its plants in Gwinner and Bismarck. The company is saying that these layoffs are the result of decreased market demand for their product, but it’s pretty clear to this observer that Bobcat is cutting costs in order to comply with the new contract they signed with the USW.
Is demand for Bobcat’s products slowing down? I don’t doubt it, but wouldn’t the company be able to keep more employees on if they hadn’t had to cave to the demands of the United Steel Workers? Or maybe have been able to avoid layoffs altogether?
This is the harm unions do to our job markets. They artificially inflate the price of labor to the point where employers are actually forced to either drive up price of their products or services or simply employ fewer workers, neither option being especially good for our overall economy.
Things like market slowdowns and layoffs happen. They are unavoidable in any industry, but their impact wouldn’t be as severe were our job markets not manipulated and made inflexible by greedy unions and the contracts they force down the throats of business owners.













