Labor Day might have passed, but problems related to labor deserve sustained attention.

In 1894, manufacturing workers averaged 60 hours of work a week. Now, the average workweek is 34.4 hours . Currently, working conditions are rarely harsh, and the typical worker enjoys unprecedented wealth. For over 95% of America's population, real poverty has been eradicated. At the same time, however, union membership is only 10.1% of the working population. Workers may profess to support unions, but few workers choose to join unions. Even fewer workers want to pay union dues, which are often used to promote liberal causes.

That is good for America. The facts show that an economy with strong labor unions is an economy that grows below potential. Contrast the national wealth of the wealthy countries of Europe, which have strong labor unions, with the national wealth of the United States.

Unions might help small groups of workers maximize better pay, conditions, and benefits. But they reduce economic growth and raise the embedded rate of inflation. Consider, for example, how members of the Teamsters union recently extracted monopoly power compensation increases from UPS Inc. A typical UPS worker who is a member of the Teamsters will soon be making $170,000 a year when benefits are included.

Similarly, members of the West Coast longshoremen’s union just ratified a new contract providing for a 30% pay increase over four years. The average dock worker who is a member of the union will be making almost $260,000 a year to operate forklifts and cranes, not to haul cargo by physical labor. U.S. ports are among the most inefficient in the world economy.

There is also an expectation of labor strikes at one or more of the Detroit 3 vehicle manufacturers. The United Auto Workers want a 40% pay increase and a 32-hour workweek. Vehicle assembly plants with unionized workers are almost 20% less productive than non-union vehicle plants and almost 40% less efficient than Tesla vehicle plants.

Labor unions with economic power are monopolies. They reduce aggregate demand for labor. They reduce aggregate economic growth. The U.S. economy is a knowledge economy. Intellectual capital is the most valuable asset of the nation.

Unions might be a continuing drain on the economy, but there is hope. The artificial intelligence revolution will increase the economic returns of intellectual capital.

James Rogan is a former U.S. foreign service officer who later worked in finance and law for 30 years. He writes a daily note  on finance and the economy, politics, sociology, and criminal justice.