The great American railroads responded, immediately employing non-union workers to replace three quarters of the empty positions.

The net effect is a misallocation of labor compared to an efficient allocation, and possibly even a reduction in the income received by workers as a whole, including workers in the non-union sectors.

Meanwhile, the growth of international competition forced American companies to cut costs to maintain profits, and they have hired workers abroad at non-union wages and closed U.S. factories.