Unionizing Students Should Consider Manufacturing’s Legacy

The upcoming vote on whether students at Harvard ought to form a union and become part of the collective bargaining process as employees of the University has undoubtedly generated a lot of excitement and perhaps some anxiety. While a Harvard parent, I consider myself a disinterested party given my lack of affiliation as a student, faculty member, or administrator; however, I do have some thoughts for consideration, in addition to what the pro-union organizations and the Harvard administration have said.

I run a manufacturing company and have witnessed in my 30-year career the relative decline of American manufacturing from its peak employment in 1980 to today, losing roughly eight million jobs while the rest of the economy added over 60 million workers. That’s not to say manufacturing isn’t still important or doesn’t offer rewarding career opportunities (it is and does), but it’s impossible to understand the relative decline of American manufacturing without acknowledging the role that organized labor played in its demise. It may hurt to hear this, but the data—by which I mean the numerous academic studies that have been published in peer-reviewed journals—portray an irrefutable truth: The presence of unions destroys jobs and industries over the long run.

It’s not the early 20th century anymore, when unions were needed to help protect workers from the depredations of the industrial workplace. Even Franklin D. Roosevelt, the president who introduced major statutes in the 1930s promoting the rise of the labor movement, thought unions should be limited. Unions, after all, distort the market for labor, and without a specific exemption written into the antitrust laws, collective bargaining would be illegal as a monopolistic restraint of trade. This is why FDR opposed granting organizing rights to public sector workers, and why he would without a doubt have opposed granting union rights to graduate students receiving stipends from their universities.

It’s easy to dismiss these concerns given the differences between graduate students and factory workers. But such a line of thinking would underestimate the capabilities of employers to respond to the market distortions imposed by labor agreements. Union organizers will say that graduate students who organized at other universities have been successful at improving their compensation and working conditions, and that the new unions haven’t caused any negative impacts; the Harvard administration will argue that a union will ruin the special relationship between faculty and graduate students and impede the educational mission. But what really needs to be heard is how unions affect the economics of the workplace, and what employers have been doing, for over one hundred years, to counteract these deleterious effects.

The economic impact of organized labor in the workplace is simple: Unions raise wages and reduce employment. It’s certainly true that unions can shorten your working hours, increase your stipend, improve working conditions, or modify the benefit package; but at the end of the day it can all be quantified as money. These apparent benefits from organized labor raise the cost of employment to the employer. And the only reasons a union can do this—to increase the effective pay you would receive—are its monopolization of the workforce and the threat of a strike. So the employer of a unionized workforce pays higher compensation per worker than would otherwise be the case, which naturally leads to hiring fewer workers. The once-popular assertion that unions increase the productivity of their workers has now been thoroughly discredited. Instead, the result is fewer workers making more money.

From the employer’s perspective, when an important part of your cost structure suddenly goes up in price, your alternative is to look for lower-cost inputs: In this case, other (non-union) workers who can do what graduate students do, but for lower cost. The union may try to prevent the University from outsourcing labor, but the formation of a union will instantly establish a tension—between the employer aiming to outsource labor and the union trying to prevent that—from now until the end of time. It’s not personal, and it cannot be avoided: It’s simply the result of a natural market force. Even the wealthiest universities have budgets to meet.

High taxes on cigarettes caused smoking to decline; high gasoline prices led to less driving and more use of public transportation. Nothing different here. When faced with higher labor costs, employers simply use less of it. The University will find ways to use less graduate student labor: Accepting fewer students into graduate programs; assigning TFs to larger classes or more of them; broadening job duties; or otherwise intensifying the job. This is already happening at other universities where graduate students have unionized.

However it changes the nature of graduate education, a unionized workforce will certainly change its economics. There will be fewer seats at the table for those aspiring to become academics, and the University will spend more money on this shrunken pool of graduate students instead of spending that money on undergraduate scholarships, additional full professorships, and new departmental programs. From where I sit, the first rung on the ladder to a life in the academy still looks pretty good: Free education from the best minds in the world, along with room, board, and a modest cash stipend; and after a few more rungs on the ladder, a good shot at grabbing the brass ring of a tenured position at a major university. All this in exchange for a little bit of teaching.

So to the students voting on Nov. 16 and 17: Go ahead and relish your newfound right to organize. But having a right does not require you to exercise it. If you can learn anything from the history and economics of our manufacturing sector, you’ll tell the UAW “no thanks” and bid them adieu.

Andrew O. Smith is a business executive and the author of “Sand in the Gears: How Public Policy Has Crippled American Manufacturing.”