Fox News pushed aside economic reality and Volkswagen's stated position surrounding unionization effort at a Tennessee plant, instead warning that a unionization push may generate too many benefits for workers and hurt the carmaker.
Workers at a Volkswagen AG plant in Chattanooga, Tennessee are voting this week on whether to unionize with the United Auto Workers (UAW). A final vote on the move is scheduled to take place by February 14, and in advance of the decision, outside conservative activist groups have mobilized a campaign to halt the unionization effort, succeeding in skewing local coverage of the issue.
Now Fox News is joining the union opposition effort. The February 13 edition of Fox & Friends stoked fears that unionization could hurt the U.S. economy and make manufacturing prohibitively expensive, something that Fox Business host Stuart Varney called "a very big issue":
PETER JOHNSON, JR.: What does this sound in terms of the economy, in terms of right to work, in terms of our ability in this country to manufacture in a way that's not too expensive?
VARNEY: Oh, it's a very big issue.
JOHNSON: Yeah. Tell us about that.
VARNEY: A very, very big issue. Foreign carmakers have, I think, 11 plants in more than a dozen states in America. They're nonunion, very successful automobile producers. Now, if the union comes into Volkswagen, do they now have union rules, work rules? Which really hurts the ability of a carmaker to move quickly with a new product. What about wage levels? What about benefits? Do those always go up because of unionization?
Varney purports to be concerned with economic growth and employer's rights, but it is at the expense of the facts.
The reality is that Volkswagen is not opposing the unionization effort in Tennessee.
All Volkswagen plants currently have union representation besides Chattanooga and two plants in China. And the German company has praised the benefits such organization has brought to its other plants -- As The Washington Post wrote, "the company even sees its culture of worker codetermination as a 'competitive advantage,'" according to Volkswagen's global works council leader, Bernard Osterloh. As UC Berkley's Harley Shaiken has explained, this competitive advantage has already helped boost Volkswagen's bottom line -- the company "has led all major automakers in raising shareholder value" over the last three years and was "virtually tied for second place in global auto production in 2012."
And economic research is on Volkswagen's side. Unions around the country have repeatedly been shown to boost productivity and allow greater flexibility during economic downturns, restoring demand to the economy by raising wages. As the Economic Policy Institute has noted, unionization increases the stability and buying power of the middle class, which is necessary to maintain a healthy consumer-based economy:
The notion that greater unionization is harmful to an economic recovery is misguided. Unions, as institutions, and the members that form them are economically rational and do not pursue demands that force firms out of business. There are several studies that show that firms that become unionized (see the review of studies in DiNardo and Lee, 2004) are no more likely to fail than are firms that remain nonunion. If anything, unions are more important in a recession. As was stated in a statement signed by forty prominent economists and released on February 25th, "The current recession will further weaken the ability of workers to bargain individually. More than ever, workers will need to act together."
Economic recovery and future economic stability depend on a middle class once again having sufficient purchasing power to sustain the economy; we must not rebuild another bubble economy. Greater unionization can contribute to that goal because wages and benefits for ordinary workers will rise and income inequality in the economy as a whole will be reduced. In short, unions help foster the broad middle class that is essential to our nation's economic strength.
Varney's misguided claims tally closely with the political attacks from conservative activists that have been pouring into Tennessee in response to Volkswagen's unionization vote.