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Manhattan Institute

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MI Responds: 2016 State of the Union on the 21st Century Economy

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MI Responds: 2016 State of the Union on the 21st Century Economy

January 13, 2016
EconomicsEmploymentRegulations

"MI Responds" features real-time commentary from Manhattan Institute scholars on breaking news and developing issues. Click here to view more.

President Obama is right that the American workforce is changing. The sharing economy's rapid rise embodies the new American economic ideal—one driven by technology, mobility, convenience, and flexibility.

But rather than fully embrace the changing economy to promote entrepreneurship, President Obama called for a return to the 'golden age' of the 1950s—and the high unionization rates and inflexible workforce that accompanied it.

Unions' problems are not caused by a lack of federal worker protections. They come from the changing needs of workers, especially the young. Only 4.5 percent of employed 16- to 24-year-olds are union members—one-third of the level for workers ages 45 to 64. Given the costs of union dues, unfunded promises union bosses made to retirees, and inflexible workplace policies that favor older workers, it is not surprising that few young people join unions.

The outdated union model is antithetical to the entrepreneurial workplace that millennials desire. President Obama spoke at length about creating a 21st century workforce, but his adherence to the outdated model that unions protect is no way to achieve his goal.

Jared Meyer is a Fellow at the Manhattan Institute.

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