New Era for Labor?

Megan McArdle has a great post with her thoughts on the Labor movement. Some really good insights, including her take on airline deregualtion.

But even in non-budget industries, it is the lower income quintiles who are most hurt by the kinds of oligopolies needed to sustain strong union bargaining power. The airlines are an excellent example of what I've said above. The twilight struggle of the major airlines with bankruptcy has made it clear that the lavish union jobs they provide, which seem to pay at least double the market rate, were really only economically viable when regulation protected their oligopoly, and allowed (hell, forced) everyone to price at cost-plus. Without such regulatory protection, it seems likely that eventually every one of the major airlines will either shed their high-cost unions (unlikely) or follow Pan-Am and Eastern Airlines to the grave.

And who has benefitted from deregulation? Companies? Nope; until recently, at least, they paid through the nose for their last-minute, flexible tickets. First class? Honey, if you're flying first class, you aren't worried about the cost of your travel. No, the beneficiaries are the 85% of Americans who had never been on a plane as of 1970. In my mother's youth they used to dress up to go pick people up at the airport; it was the province of luxury. Now people who saw far flung relatives only rarely, when they could get away for long enough to justify a couple day's driving, can, usually for less than a day's wages, get to Mom in a matter of hours. The cost of those high-priced union jobs was that most Americans had fewer, and less varied vacations, and less time with family--and the working class and the poor were hurt the most. That hardly seems like a liberal dream.

She has a really good point here, unions cause prices to rise due to the increased wages and benefits they demand. It might be good for the workers in the short run, but in the long run it's a losing strategy.

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