234
FREE TO CHOOSE: A Personal Statement
airline pilots. Alternatively, reduce the number of carpenters or pilots, and they will command higher wages. Keep down the number of physicians, and they will be able to charge higher fees. A successful union reduces the number of jobs available of the kind it controls. As a result, some people who would like to get such jobs at the union wage cannot do so. They are forced to look elsewhere. A greater supply of workers for other jobs drives down the wages paid for those jobs. Universal unionization would not alter the situation. It could mean higher wages for the persons who get jobs, along with more unemployment for others. More likely, it would mean strong unions and weak unions, with members of the strong unions getting higher wages, as they do now, at the expense of members of weak unions. Union leaders always talk about getting higher wages at the expense of profits. That is impossible: profits simply aren't big enough. About 80 percent of the total national income of the United States currently goes to pay the wages, salaries, and fringe benefits of workers. More than half of the rest goes to pay rent and interest on loans. Corporate profits—which is what union leaders always point to—total less than 10 percent of national income. And that is before taxes. After taxes, corporate profits are something like 6 percent of the national income. That hardly provides much leeway to finance higher wages, even if all profits were absorbed. And that would kill the goose that lays the golden eggs. The small margin of profit provides the incentive for investment in factories and machines, and for developing new products and methods. This investment, these innovations, have, over the years, raised the productivity of the worker and provided the wherewithal for higher and higher wages. Higher wages to one group of workers must come primarily from other workers. Nearly thirty years ago one of us estimated that on the average about 10 to 15 percent of the workers in this country had been able through unions or their equivalent, such as the American Medical Association, to raise their wages 10 to 15 percent above what they otherwise would have been, at the cost of reducing the wages earned by the other 85 to 90 percent by some 4 percent below what they otherwise would have been.