How Unions Can Help Republicans. Really.

Republicans are looking for a way to increase middle-class incomes without new government spending or higher taxes on the rich. There's already an answer for that.

Republicans' new best friends.

Photographer: Mark Ralston/AFP/Getty Images

If Republicans are serious about fighting stagnant wages, but don't want to expand government or tax the rich, here's an idea: Why not strengthen unions?

Sounds crazy, right? It's hard to think of any group that Republicans oppose more starkly than organized labor. Unions have become synonymous with unsustainable public pensions, failing schools, opposition to free trade, and a general hindrance for businesses trying to run their operations as efficiently as possible.

Here's something else unions are associated with: higher wages. And the drop in U.S. membership, from almost one-third of workers in the 1950s to a little more than 10 percent today, has coincided with the stagnant middle-class income that Republicans and Democrats are increasingly talking about addressing. You've probably seen some version of this chart:

Unions

As the Center for American Progress wrote last week in a report on stagnant wages, it's hard to talk about fixing inequality without also talking about unions. The authors proposed a range of changes, including holding union elections more quickly, making it harder to fire workers trying to unionize and, if there's evidence of employer coercion, replacing an election with a so-called card-check process.

Why would Republicans ever support those changes? Because if they really want to improve the financial standing of working-class and middle-class Americans, the alternatives are worse.

Start with tax credits. Some Republicans, including House Ways and Means Committee Chairman Paul Ryan, favor increasing the earned income tax credit. Others, such as Senator Mike Lee of Utah, want to increase the child tax credit. President Barack Obama included similar ideas in the run-up to this week's State of the Union speech.

There are two problems with using tax credits to fight stagnant wages. First, it costs money, which requires raising taxes on the wealthy (which Republicans won't support), cutting other spending (which leaves the credits' beneficiaries back where they started) or increasing the deficit.

The second problem, and one that Republicans in particular ought to be more sensitive to, is that the purpose of the tax code isn't moving money around between income groups. The purpose of the tax code should be funding government, in the least distortionary and fairest way possible. The party that consistently warns about redistribution seems oddly willing to do some of its own.

Other ways of raising wages have their own problems for conservatives. Higher minimum wages may produce a similar outcome to unions, but more bluntly; at least unions let employers negotiate wage packages that fit their industry. Greater public spending can boost the economy, but it has to be paid for, through either taxes or borrowing.

Increasing the bargaining power of workers, by contrast, doesn’t entail any new government spending. It doesn't further warp economic incentives. It doesn't use the tax code to take from some and give to others. It doesn't impose indiscriminate mandates on how much businesses must pay their workers. And it reflects a core conservative principle: Giving people the tools to fight for themselves, rather than relying on government to provide for them.

Clearly, Republicans aren't going to ease their opposition to unions overnight; quite possibly, not ever. But as the facts change (or the public's level of concern over those facts), so do political truisms. How else to explain that Republicans have dialed back their focus on Obamacare, or are now debating proposals of their own on climate change?

So as Republicans debate how to help the less well-off, one gauge of the sincerity of that effort will be their willingness to at least address the decline of labor, and talk about ways to deal with it. Sure, it's unlikely. Then again, parties steal from each other's playbooks all the time.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

    To contact the author on this story:
    Christopher Flavelle at cflavelle@bloomberg.net

    To contact the editor on this story:
    Stacey Shick at sshick@bloomberg.net

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