National Football League officials will kick off their 76th amateur draft tonight in New York’s Radio City Music Hall. But while the National Football League Players Union has accepted the results of the 75 previous NFL Drafts, it will not be participating in this one. According to a lawsuit filed last month in federal court in Minneapolis by star quarterbacks Tom Brady of the New England Patriots, Peyton Manning of the Indianapolis Colts and Drew Brees of the New Orleans Saints, the draft itself is a violation of our nation’s anti-trust laws.
But didn’t Brady, Manning and Brees all participate in the NFL Draft when they came out of college? Yup. And didn’t Manning and Brees get multimillion-dollar bonuses before they played a down in the league? Double yup.
So how can they now claim that the very process through which they became millionaires, is illegal? Welcome to the absurdity of U.S. labor laws.
Unions always tell prospective members that, on average, unionized workers earn higher wages than their nonunion counterparts. And, by itself, that is true. However, that does not mean that expanding union membership would raise wages for all workers.
For that to happen a unionized work force would actually have to add value to a firm’s bottom line. But economic research shows that the exact opposite is true. The higher wages that unionized workers earn do not come from the Easter Bunny; they come directly out of a firm’s profits.
Economic research shows that unionized firm profits are at least 10 percent lower than similar nonunion firms. Unions think this is great. The entire point of unions is to redistribute profits from a firm’s shareholders to its workers. But this is simply unsustainable in a competitive environment.
Unionized firms that operate in a competitive industry eventually find themselves unable to compete with nonunion firms. Studies show that unionized firms spend 15 percent less on research and development than nonunionized firms and 6 percent less on capital investments.
Unionized firms can survive not making these investments for a little while, but over time they lose out to nonunion competitors.
Just look at American manufacturing sector. Between 1977 and 2008 unionized manufacturing jobs fell by 75 percent, but nonunion manufacturing employment actually increased by 6 percent over that same time period.
But not all unions have suffered since the 1970s. Government unionization has actually increased dramatically since then. In fact, the majority of union members today work for the government. The reason is that government is a monopoly. Unionization is sustainable in a monopolized industry.
Which brings us back to the NFL. The NFL is a monopoly. We know this because New York Jet Freeman McNeil won an antitrust suit against the league in 1992. But if the NFL is a monopoly, then how is it legal under our nation’s antitrust laws?
The answer is the NFLPA. See, unions are exempt from U.S. antitrust laws. So practices that would be antitrust violations if performed by a business suddenly become legal if they are performed as part of a collective bargaining agreement with a union.
Unions need their antitrust exemption because without it, almost everything they do would be illegal. Unions function the exact same way as cartels like the Organization of Petroleum Exporting Countries do: They restrict supply (labor for unions, oil for OPEC) thus driving up prices (wages for unions, barrel of oil for OPEC). The result for American football fans: higher prices and less football.
The NFL will survive this year’s labor disruption. It’s a monopoly. Millionaire NFLPA members can afford to take a year off. But can America still afford unions?
Conn Carroll is a senior editorial writer for The Washington Examiner. He can be reached at [email protected].
