Here's an old abridged editorial I managed to find. There is
nothing wrong with unions, once you remove the compulsory aspects
of it. Jbul, I agree, workers should be free to contract on an
indivdual basis or join a union.
Economics of Unionism
In a free society, people have the right to form voluntary
associations. Therefore, any impediment, including so-called
right-to-work laws, to people joining and forming labor unions
is offensive. On the other hand, when union membership or dues
payment is made mandatory as a condition of employment, that
is equally offensive. Union leaders argue that collective bargaining
benefits all workers, even those who aren't members. They should
be allowed to "free-ride", thus compulsory dues are justified.
That's a little more complex argument, but the fact that one person
benefits from the activities of another doesn't necessarily make the
case for compulsory payments. For example, I catch my neighbor
enjoying my beautiful rhododendrons, should she be forced to pay
part of their costs rather than "free-riding"?
Union leaders argue that their struggle for higher wages is against
the employer and their major weapon in that struggle is the strike.
They're wrong on both counts. By itself, the strike is not much of a
weapon. Instead, union power lies in its ability to prevent employers
from hiring other workers in their places. They can achieve this either
through labor laws or violence. Otherwise, a strike is little more
than a mass resignation. That's why the 1981 air traffic controllers'
union strike was a disaster; they could not prevent the Federal
Aviation Administration (FAA) from hiring other workers. The real
struggle of labor unions is against other workers. Their ability to
demand wages that may exceed their productivity depends on their
ability to prevent employers from hiring replacements.
Competition is always between either seller and seller or buyer and
buyer - not buyer and seller. If Walmart wanted to rig the game in
order to charge higher prices, it would try to get Kmart and Sears
(other sellers) out of the market not you and me (buyers). Unions
represent sellers, in this case sellers of labor services. They
benefit from restricting entry by other sellers (workers) and having
more buyers (employers). This aspect of the conflict between unions
and other workers is seen by the fact that when there's a strike
involving violence, it is workers who disagree with the union who
are most likely to be assaulted, injured or killed by union members,
not employers.
Higher wages are not caused by unionism. If unionization was the
route to higher wages and living standards, poverty could be wiped
out instantly in countries like Haiti, Zaire and Romania simply by
unionization.
High wages are related to worker productivity. The challenge is to
make people more productive. One way is through what economist call
investment in human capital i.e., education and skills training.
Another is through greater formation of physical capital - machinery,
tools and equipment. When we see highway construction, around the
world, workers using a lot of heavy equipment receive higher wages
than those using picks and shovels. Heavy equipment operators are
more productive because they're working with more capital. Therefore,
rising wages are tied to increased capital formation. One way to
increase capital formation is to change our tax policy that makes
capital formation more costly - eliminate capital gains and corporate
profit tax.
The bottom line protection for today's workers is rising worker
productivity and many employers competing for their services. After
all the bulk of our labor force is not unionized and for the most
part doing quite well.
