Greg Mankiw notes that President Obama has issued an order permitting federal agencies to require union labor for federal contracts. Now, let's review. Union workers get paid more than regular workers -- that's the whole point of starting a union.
Let's say you have have a budget of $15 million to cover the labor costs to build roads. Let's say that to build a mile of road requires 20 workers and 50 hours to complete. Now let's say that non-union workers are paid $20/hour while union workers make $30/hour. Thus, a mile of road using non-union labor would cost $20,000/mile while union labor would cost $30,000/mile.
Thus for the same $15 million budget you could get 750 miles of paved roads with non-union labor or 500 miles with union labor. Doing less with more, that's the union way.
Well, Obama certainly did promise change...
Let's say you have have a budget of $15 million to cover the labor costs to build roads. Let's say that to build a mile of road requires 20 workers and 50 hours to complete. Now let's say that non-union workers are paid $20/hour while union workers make $30/hour. Thus, a mile of road using non-union labor would cost $20,000/mile while union labor would cost $30,000/mile.
Thus for the same $15 million budget you could get 750 miles of paved roads with non-union labor or 500 miles with union labor. Doing less with more, that's the union way.
Well, Obama certainly did promise change...
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