When dealing with political arguments, it is easy to get caught up in the details of the fight, and forget to examine the underlying premise. Take the proposed “Card Check” bill that will allow a union to form by petition with no secret ballot. It is easy to be sidetracked by arguments about the importance of the secret ballot and how people will be intimidated into signing the petition with no chance to voice their true feelings in the sanctity of a voting booth.

While these are valid points, a more profound question is why do we allow unions at all? Why is it even legal for people who came with hand out asking for a job to force the owners to run the business in a certain way?

Is this good policy?

Let’s look at some evidence of whether allowing the employees in the form of unions to dictate how business operates is a good idea. GM, Ford and Daimler-Chrysler are all union plants. Toyota and Honda are not. Both make vehicles in the U.S. with American labor. It costs the “Big 3” union shops approximately 80 dollars an hour to build a vehicle. It costs Toyota and Honda half of that.

2008 has not been kind to the stock market in general, but let’s see how the auto industry has fared. In the last year GM stock has lost 83% of it’s value, falling from $28.39 to $4.81 per share. Ford has lost 70% falling $7.15 to $2.14, and Chrysler has lost 68% falling from $101.77 to $32.66. Combined, the big 3 lost 71% of their value.

Contrast with the non union shops. Toyota lost 27%, falling from $110 to $80, and Honda lost 35% falling from $34 to $22. Combined, a loss of only 29%.

Union auto plants lost nearly 3 quarters of their value, and the non union plants less than 1 third.

While this is certainly not definitive proof that unionization is bad, it certainly bears further study. On an intellectual level, it doesn’t make sense that the owners of a company have to run their business by dictate of the employee. The owner has the survival of the business at heart while the employee only sees what goes into his pocket as important.
When times are good, some businesses can be so successful that they can withstand this illogical practice. However, like a parasite, unions can destroy the very business they rely on for survival because the owners cannot react to reality.  We are witnessing exactly what happens when we allow the lunatics to run the asylum.