Some Thoughts on Unionism

by Alex Burwasser, Guest Contributor

First and foremost, I support the right of private sector workers to organize and bargain collectively (which nearly always means that a labor union will serve as the workers’ bargaining agent). My support is based on our Constitutional right of free association.

Anyone with even just a casual awareness of the history of the American labor movement no doubt understands the appalling conditions endured by many workers in the late 19th and early 20th centuries. Child labor, excessive work hours, and unsafe working conditions were only part of the miseries workers had to endure. It is to the labor unions’ credit that they were able to create public awareness and work to remedy these excesses.

Unfortunately, as unions became larger and more powerful, they became power centers all of their own, existing more and more for the benefit of the union leadership rather than the workers whose dues they were collecting. At some point, it seemed that the workers the union bosses were paid to represent had just traded masters (i.e., oppressive and greedy union bosses replaced oppressive and greedy employers). The graft, corruption and other criminal activities of some of the larger union organizations are well documented.

Fast-forwarding to the present, there is far less need for labor unions today. A plethora of state and federal statutes has long been in force that address all the legitimate grievances raised by the labor movement founders. As a result, unionized private sector workers today receive far less value for the dues skimmed from their paychecks than in times past. This is one of the reasons that the percentage of private sector unions has shrunk so dramatically (up to 35% of the labor force at its peak back in the 1950s/60s as compared to 8% today).

The other reason for this catastrophic decline is that today’s markets are more globalized and competitive. Unionized companies are less efficient than their non-unionized counterparts as a result of the burdens of higher labor costs, cumbersome work rules, and an inability to easily trim out less productive and unnecessary workers. Since this raises production costs, unionized companies are less competitive. As a result, large unionized U.S. industries have suffered huge losses in market share since the 1960s. (In fact, major portions of large, important, basic industries such as steel, auto, and shipbuilding employing millions of workers have fled to offshore domiciles and right-to-work states.) Private sector unionism is thus self-limiting – if the union is too “successful” in its contract negotiations, either the owners move the operation to a right-to-work state (or even offshore) to obtain relief or the business eventually shuts down and surrenders its market share to the global marketplace.

In sharp contrast to my support of the right of private sector workers to unionize, I strongly oppose public sector unionization. Public sector unionism is a recipe for poor governance, corruption, and an inefficient, bloated public sector workforce with wages, salaries, benefits, and job security far in excess of that available in the private sector for comparable work. The problem is easy to understand. Public sector unions inevitably back selected local politicians usually Democrats) with campaign contributions and other aid. When these “bought and paid for” politicians are elected and then later face these same union sponsors across the bargaining table, they are very reluctant to bite the hands that feed them. Thus, there is nobody at the bargaining table representing the taxpayer in these negotiations. The result is a sweetheart deal for the unions. Over time, however, the municipalities and states collapse under the burden of the resulting unsustainable pension and healthcare obligations.

The recent Detroit bankruptcy is an excellent case in point. This was not just a one-off event caused by an isolated case of bad governance and gross corruption. It is actually a template for the future of public sector unionism in particular and blue state governance in general. Back in the 1930s, President Roosevelt (who was a strong supporter of private sector unions) stated his opposition to public sector unions. Similarly, back in the 1950s, George Meany (then-president of the AFL-CIO) likewise stated his opposition to public sector unionism.

Unlike private sector unions whose excesses are clamped by market realities as discussed above, there is no similar clamp on the excesses of public sector unions. Without competition, the costs of these excesses can be shifted onto taxpayers for a very long time.

Public sector workers really don’t need unions. All government organizations have generous public sector worker laws that obviate the need for representation. Non-unionized public sector workers mostly are required to put forth but modest effort, receive adequate compensation, and cannot easily be terminated for poor performance. At the end of the day, public sector unionization is a recipe for poor governance and extravagant benefits that must be funded by taxpayers. On the whole, these taxpayers have lesser compensation, much less job security, and healthcare and pension benefits that are but a pale imitation of those received by public sector workers. Unionized public sector workers have become privileged public masters rather than the more modest public servants that they were hired to be.

Addressing the issue of compulsory unionism, I argue that since the right of free association is the basis for the legitimacy of labor unions, this same right should likewise be the basis for the right of workers to refuse to join and not become unwilling conscripts. While those workers who believe that they obtain value for their union dues should be free to join, unions should not have the power to override the right of free association of those workers who do not believe the value of union membership is worth the dues they would be compelled to pay.

The counter-argument is often made that workers should be required to pay for benefits they receive (i.e., since both union and non-union workers benefit when unions successfully negotiate a favorable contract, the non-union workers are in effect getting a “free ride”). While this is a good talking point with a certain smell of truth, the right of free association, which is the basis for union legitimacy as discussed above, is a far more compelling and overriding argument. Stating this more forcefully, since the legitimate basis for union existence is the right of free association, these unions cannot then walk into the room and credibly claim with a straight face that this same right of free association should not extend to non-members.

Looking at this counter-argument from a different angle, if we accept the premise that unions should be able to levy unwilling conscripts based on the argument that they would otherwise receive unearned benefits obtained through the efforts and sacrifices of their unionized brethren, then it would follow that any organization that claims to benefit non-members could likewise draft unwilling conscripts and force them to pay dues. Thus, those advocating compulsory unionism would have to accept the absurd premise that the Chamber of Commerce, PTA, Rotary Club, and many other civic organizations that claim to accomplish public good should likewise be able to force compulsory dues-paying membership.

An equally compelling (though less discussed) issue is that union membership often has no net benefit. Since unionism has been a large contributing factor to job losses as discussed above, workers could reasonably conclude that any short term benefits would be outweighed by the elevated risk of unemployment. In other words, unwilling workers could reasonably argue that unions are a net detriment rather than benefit to their livelihood, and that they should hardly be expected to pay dues to an organization that threatens this livelihood.

The bottom line is that unions sell a representation service to workers that is not unlike attorneys selling representation to their clients. Like all services, price and quality are optimized by the forces of competition in a free market place. If competition is replaced by compulsion, higher prices and poorer service (more specifically, higher union dues, higher pay and perks for the union bosses, and fewer worker benefits) are the predictable result. As a small-business entrepreneur, I have no legal monopoly that allows me to compel any customer to buy my products. I similarly expect unions not to demand this extravagant privilege.

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