Subsidies for unions will drive labor costs up, making the U.S. uncompetitive.
The Biden administration claims its policies are bringing manufacturing jobs back to U.S. shores. But strikes by auto workers, healthcare workers, and Hollywood writers and actors demonstrate that key pillars of President Biden’s economic agenda are bad for American industry. By heavily subsidizing unionization, Bidenomics is likely to raise production costs, drive more-frequent strikes, and erode America’s international competitiveness.
The administration’s fiscal glut includes many taxpayer-funded incentives for expanding industrial capacity. The Inflation Reduction Act’s climate and energy subsidies are expected to surpass $1 trillion. While the inflationary effect is obvious, less appreciated is that these massive fiscal programs are designed to stimulate unionization.
The Inflation Reduction Act’s manufacturing tax credits include “prevailing wage” requirements, which force firms that take the money to meet or exceed the average regional wage for that type of work. The requirements prevent firms from competing to reduce labor costs and effectively make unions wage setters. Forcing nonunionized employers to pay the same wages as unionized ones is unionization by other means.
Continue reading the entire piece here at The Wall Street Journal (paywall)
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Stephen Miran is an adjunct fellow at the Manhattan Institute, co-founder of asset manager Amberwave Partners, and a former senior adviser for economic policy at the U.S. Treasury, 2020–21.
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