Q: Are unions good for America?
A: The right to unionize should be a basic right of any group. You should be able to organize. You should have no privileges, no special benefits legislated to benefit the unions, but you should never deny any working group to organize and negotiate for the best set of standards of working conditions.
http://www.ontheissues.org/2008/Ron_Paul_Jobs.htm
What does Ron mean here? Is he pro or anti unions? I know he is a follower of the Austrian school of economics, so is his stance on unions anti-Austrian or anti-Mises?
Thanks
His stance on unions is perfectly libertarian. Libertarians do not have any problem with unions per se. The problem is that governments have given unions special privileges over and above the rights of their individual members. That's what Ron Paul is opposed to - the special privileges.
Yes, but I would say that in some context it is also anti-Austrian, because Austrians seem to attack Unionization from an economic standpoint, though they may permit it because of morality.
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Well, it is questionable whether unions would exist in a free market, stripped of their special privileges. They almost certainly wouldn't resemble unions as we know them today.
The question is whether it is really possible for an employee to obtain higher wages via negotiating collectively than he could negotiating as an individual. I think this unlikely, but I don't think it can be ruled out a priori. This is something the market would figure out.
As far as I know, that is the only economic grounds for "attacking" unionization per se as opposed to merely the government-granted special privileges that have historically gone along with it.
If an individual has the right to negotiate on his own behalf, how could it be justified to prevent him from joining with others to do the same thing? (I know, this is going back to a moral argument. But what if it turns out that unions ARE economically inefficient? Would it then be OK to use force to prohibit them? That's why I'm not a big fan of arguments from a strictly utilitarian perspective.)
I've never heard of an Austrian argument for prohibiting voluntary unionization; an Austrian would simply point out that it is inefficient. That is all praxeology can say on the matter.
People and groups of people are not good or bad in themselves. It is their acts that make them good or bad.
A right to commit bad acts is bad for America. This includes the right to strike and to exclude competition.
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Stranger: People and groups of people are not good or bad in themselves. It is their acts that make them good or bad. A right to commit bad acts is bad for America. This includes the right to strike and to exclude competition.
I will agree with you, subject to a few clarifications.
"Bad acts" = initiation of force
"right to strike" = the right to commit trespass and assault, the right not to be fired, etc.
Employees always have the right to quit or threaten to quit, individually or en masse; and the right to protest peacefully, provided this does not involve trespassing. On the other hand, employers also have the right to fire employees whose behavior they disapprove of.
There's absolutely nothing wrong with groups of employees getting together, forming voluntary associations, calling themselves unions, and withdrawing their labor en masse in the form of strikes if that's what they decide to do.
There's also nothing wrong with employers banning unions on their property as a condition of employment.
What's wrong is when governments intervene and grant unions special privileges that prevent employers from firing union members or when unions themselves use violence and coercion against those workers who refuse to join.
Niccolò: Yes, but I would say that in some context it is also anti-Austrian, because Austrians seem to attack Unionization from an economic standpoint, though they may permit it because of morality.
There is nothing anti Austrian with organized labor.
Strikes are against both economic sense and libertarian law. However, unions or guilds do not require violence to exist.
Voluntary unions could provide things like collective bargaining or market standards(eg license doctors) that would be both economically beneficial and in line with libertarian law.
Many on the left can not distinguish between business and government monopoly, anti-unionism is its right wing equivalent.
Peace
So, I notice everyone stepping around the question in some way: to an Austrian, is unionization inefficient? Notice that this is not answered by saying something like "voluntary unionization doesn't harm anyone's rights." From a strictly economic viewpoint, leaving aside the question "what would you do about it?" one can reasonably ask what the economic effects are. I submit that voluntary unionization is not inefficient, but efficient in terms of producing more prosperity. Remember that Mises says economics cannot tell you what to do, but can tell you what actions will produce prosperity and which won't. You can then choose if you want prosperity, or value other things more highly - this is where ethics enters. However, from the pure science of human action:
Suppose that a voluntary union exists. Then either the employer is permitting it to exist, or has required it (I have long maintained that right-to-work laws are far from libertarian, because a closed shop still has a voluntary union.) If the employer is permitting it to exist, then either he does so because he actually likes the union, or because he would have trouble recruiting adequate, qualified, reasonably-priced labor if he forbade it. In the first case, the psychic income from the existence of the union outweighs the monetary loss from the existence of the union, and the employees have a monetary gain. What is unknown is the psychic gain or loss of the workers, however, the employer was permitting the union, not requiring it, so the workers formed it, so they prefer it too. So gains to everyone. If the employer is accepting the union because it is economically forced upon him (forbidding it prevents him from obtaining adequate, qualified, reasonably-priced labor) then the employees clearly gain from the existence of the union, and the owner also gains from it, all else being equal - he is netting monetary savings and/or higher profits from it. If the employer requires the union, clearly the owner prefers to have it, so monetary loss is more than offset by psychic gain. The employees also clearly prefer it, since they work there. So voluntary unionization, unlike coercive unionization, increases everyone's profit, and enhances everyone's position with no victims.
My thoughs are...
1) The only kind of union I will disagree with its existence are the public employees unions. As for the other kinds. I might or might not disagree with their stands on some issues. I agree with their existence.
2) Union contracts are plainly stupid.
werty369:2) Union contracts are plainly stupid.
Could you elaborate please?
JAlanKatz: So, I notice everyone stepping around the question in some way...
So, I notice everyone stepping around the question in some way...
Well, that is a legitimate and interesting question, but it was not the original question asked in this thread. The question was whether Ron Paul's position on unions was somehow anti-Austrian, to which several people have given excellent replies, IMO.
But to take up the question of whether voluntary unions are economically inefficient - you are absolutely correct from an a priori standpoint. If people choose to unionize voluntarily, they must believe it will make them better off (ceteris paribus). And that is all we can say, without attempting to make inter-personal value comparisons.
There is a different but related question that myself (and I think one or two others) touched on briefly but didn't really get into. Given that one's end is to increase one's monetary income, is voluntary unionization a suitable means to achieve that end?
I would contend that in general it is probably not. Here's why. Let's assume that 100 people want to form a union to negotiate higher wages (and that wages would henceforth be equal for all 100, or distributed according to some other scheme that is not based on productivity). It should be clear that only those employees who are less productive benefit from this. The more productive would always be better off negotiating as individuals. So the 50 top performers would have an incentive not to join the union (actually the people with above-average productivity, but the end result is the same). Now you're in the same situation as in the beginning, just with 50 people instead of 100. This continues until there is only one person (the lowest performer) left willing to unionize - and there is no more union. Hence, why unions have historically had to resort to coercion.
I've made the assumption that there is a fixed pool of of money available for wages, but the same logic would hold true as long as you assume the money available for paying wages is not infinite. The more productive would always maximize their income by negotiating individually, rather than forming an alliance with the less productive. I've also assumed that employers are "rational" in allocating wages - meaning their end is to get the maximum productivity for the minimum cost.
tgibson11:I've made the assumption that there is a fixed pool of of money available for wages, but the same logic would hold true as long as you assume the money available for paying wages is not infinite. The more productive would always maximize their income by negotiating individually, rather than forming an alliance with the less productive. I've also assumed that employers are "rational" in allocating wages - meaning their end is to get the maximum productivity for the minimum cost.
But collective negotiation can change how much money is allocated to wages. Suppose I am the most productive employee, and I ask for a raise myself. It might be in the employer's best interest to say no, and run the risk that I'll quit - one employee can be replaced. But if I organize with other workers, even though their MP is less than mine, the package might be harder to replace.
wgeary:What does Ron mean here? Is he pro or anti unions? I know he is a follower of the Austrian school of economics, so is his stance on unions anti-Austrian or anti-Mises?
I think it's somewhat informative that a lot of people would have trouble understanding Paul's answer. To many people, the dichotomy is pro-union, anti-union. Pro-union means favoring coercion to help unions, anti-union means banning unions. No other option presents itself to many people.
JAlanKatz: werty369:2) Union contracts are plainly stupid. Could you elaborate please?
Often times, union contracts devalue the merits of employees, that is, what they deserve. And restrict the employers legitimate authority.
For instance, in public school system, if a part-time employee is willing to teach more classes, he won't be able to. Even he's willing to get paid with the same rate. It's not that the administration don't want him to do it; it's the contract that requires him not to do so.
JAlanKatz:But collective negotiation can change how much money is allocated to wages.
True, but so can individual negotiation. The question is whether collective negotiation could achieve better results for all the unionized employees than what they could achieve individually. I'm saying that this seems unlikely - but I won't rule out the possibility.
JAlanKatz:Suppose I am the most productive employee, and I ask for a raise myself. It might be in the employer's best interest to say no, and run the risk that I'll quit - one employee can be replaced. But if I organize with other workers, even though their MP is less than mine, the package might be harder to replace.
There are 2 possibilities. If the employee can obtain a better wage from another employer, then the employee is better off quitting - the fact that he may be able to obtain the higher wage from his current employer by joining a union is irrelevant - why bother? In any case, competition for labor between employers will eventually force the company to raise wages in order to retain its workforce. Unionization may accelerate the process a little if the company is faced with the prospect of losing their entire workforce at once - but the end result cannot be higher than the competitive market wage rate - unless the owners are willing to accept lower profits than they could get elsewhere (because they value this result more than the lost income).
If there are not other employers offering a better wage, then that likely means the market wouldn't support it - the firm would become uncompetitive and eventually cease to exist if it allocates any additional money to wages - that's what I meant when I said the money available for paying wages is finite.
werty369: JAlanKatz: werty369:2) Union contracts are plainly stupid. Could you elaborate please? Often times, union contracts devalue the merits of employees, that is, what they deserve. And restrict the employers legitimate authority.
I disagree. Certain unions could be very benefitial, though they would be very different from what people think of as unionism today.
If an ogranizations exists to certify surgeons then hospitals might decide to only hire certified surgeons. This would have the effect of reducing transaction costs and allowing for wage standarization/stability.
I think the entire topic's message is a bit confused. Are unions good for America? Who cares!? The question to be asked is whether they are good for all the parties involved. I suppose in some situations they could be, and given that they are the result of voluntary agreement, they are fine.
tgibson11: If the employee can obtain a better wage from another employer, then the employee is better off quitting - the fact that he may be able to obtain the higher wage from his current employer by joining a union is irrelevant - why bother?
Because there are psychic benefits of not going to the other employer.
tgibson11: Unionization may accelerate the process a little if the company is faced with the prospect of losing their entire workforce at once - but the end result cannot be higher than the competitive market wage rate - unless the owners are willing to accept lower profits than they could get elsewhere (because they value this result more than the lost income).
I'm not sure that acceleration is without value - I'd certainly prefer a raise now over a raise in a year. Besides, in a high-turnover field, it's possible that competition will not increase wages.
tgibson11:unless the owners are willing to accept lower profits than they could get elsewhere (because they value this result more than the lost income).
I'm not sure how that follows - they could earn lower profits than before without dropping below a normal profit, couldn't they?
A couple points:
I dont fall for the "if unions exist they self evidently economical', entrepreneurs improve markets. In a free market Austrians would have an important entrepreneurial role.
However, I do believe unions can be economical. An employer might prefer to pay higher wages to a guild in exchange for the reduced costs that come from a skilled and reliable work force. The money saved on transaction costs can be spent towards wages.
JAlanKatz: tgibson11: If the employee can obtain a better wage from another employer, then the employee is better off quitting - the fact that he may be able to obtain the higher wage from his current employer by joining a union is irrelevant - why bother? Because there are psychic benefits of not going to the other employer.
Then we're no longer talking about merely maximing monetary income - that was my original assumption. Obviously if you have other ends (maybe you just like the idea of belonging to a union) then other means may be suitable for achieving them.
JAlanKatz: tgibson11: Unionization may accelerate the process a little if the company is faced with the prospect of losing their entire workforce at once - but the end result cannot be higher than the competitive market wage rate - unless the owners are willing to accept lower profits than they could get elsewhere (because they value this result more than the lost income). I'm not sure that acceleration is without value - I'd certainly prefer a raise now over a raise in a year. Besides, in a high-turnover field, it's possible that competition will not increase wages.
Agreed on the acceleration point, but the market is usually quite efficient about that kind of thing - a truly free market would be even more so. I suppose there could be geographic issues if there is only one employer in a given field in a geographic area. That would increase the transaction costs of switching employers.
I don't understand your second point. A high turn-over field is usually the sign of a very competitive market for labor - for example, technology in the late '90s. There was high-turnover for a reason, and it was because employers are constantly offering better terms in order to attract more and/or better quality employees. Did you have some other scenario in mind?
JAlanKatz: tgibson11:unless the owners are willing to accept lower profits than they could get elsewhere (because they value this result more than the lost income). I'm not sure how that follows - they could earn lower profits than before without dropping below a normal profit, couldn't they?
What I meant, was that IF the employer is going to pay a higher-than-market wage THEN profits will be lower-than-market. I should have qualified that with "in the long run." Yes, I suppose a firm with substantial entreprenurial profits (over and above the "normal" rate) could temporarily afford to pay above market wages and continue to earn an above-market rate of return on their capital. What incentive they would have to do this is not clear, since they could easily hire labor at the market rate if they chose to do so. Are you saying that a voluntary union could somehow prevent or discourage the firm from doing this? Maybe for a while, if there was a risk of having to replace the entire workforce at once - but there will always be employees willing to break ranks with the union for a small pay increase (especially if there is no threat of physical retaliation), and that can easily be made up for from the savings of hiring new employees at market rates. H***, unions today, with all their coercion and special privileges still have this problem. I just don't see how a voluntary union could make it work.
JAlanKatz: tgibson11:I've made the assumption that there is a fixed pool of of money available for wages, but the same logic would hold true as long as you assume the money available for paying wages is not infinite. The more productive would always maximize their income by negotiating individually, rather than forming an alliance with the less productive. I've also assumed that employers are "rational" in allocating wages - meaning their end is to get the maximum productivity for the minimum cost. But collective negotiation can change how much money is allocated to wages. Suppose I am the most productive employee, and I ask for a raise myself. It might be in the employer's best interest to say no, and run the risk that I'll quit - one employee can be replaced. But if I organize with other workers, even though their MP is less than mine, the package might be harder to replace.
Inquisitor:I think the entire topic's message is a bit confused. Are unions good for America? Who cares!? The question to be asked is whether they are good for all the parties involved.
I don't think this gets mentioned enough. Economists should be concerned with the value for the parties involved in a transaction (including externalities), not anything as abstract (in the economic sense) as a "country". Whether or not the rest of the people in a nation think they benifit from something that has nothing to do with them is not at all relevant to economics. Economics shouldn't be nationalistic.
I think that Dr Paul's answer is perfectly clear and as usual perfectly reasonable.
If workers want to form a union to negotiate with their own employees they are free to do so. But they won't recieve any help from the Federal government. This means no special right, no fiscal benefits, no political back-up in negotiations etc. Which sounds perfectly reasonable and I don't think it contrasts with the Austrian point of view. No Austrian economist (at least to the best of my poor knowledge) has ever said "workers will accept whatever wages are offered to them and will never complain". Think of a union as a "haggling committee", which tries to obtain the highest possible "price" (ie wage) from the "buyers" (employees) to benefit the "sellers" (its own members). Until no violence is threatened or private property is put in jeopardy (think Luddites) it's a perfectly acceptable scenario even for the most hardcore Austrians.
Unions become a problem only when they are backed by government force or when they are allowed to run unchecked: workers have all the rights to abstain from work to prove their point, but they have no right whatsoever to stop others from working (usually using violence), blocking a factory gates or using violence against others' private property (if they want to set fire to theri own cars that's another matter completely).
Finally allow me a few words. I have not a great knowledge of economics but I have a little working experience. Employers (private, that is) are much more willing to sit at a table and listen to reasonable proposals from a determined union representative than to make concessions to people parading around and making a racket of it. The problem is that unions live and thrive on high visibility and government muscle, and workers are often brainwashed into thinking that their own demands can only be met by invading the town streets with whistles and flags.
Just look at the British and Japanese automotive industries. Both were plagued with strikes in the '60s. Then the Japanese employers and employees understood that it was much better to sit around a table, come to an agreement and get back to work. The British workers instead kept on striking (often herded by persons which thrived on high-visibility events, like the infamous Red Robbo) and their employers, a mixture of snobbish aristocrats and slothful bureaucrats, instead of getting on with it asked the Government to step in and do the talking for them (well, they really allowed the whole thing to become nationalized). How it went in the end can be gauged by the number of Toyotas and Rovers on the roads today.
JonBostwick: I dont fall for the "if unions exist they self evidently economical', entrepreneurs improve markets. In a free market Austrians would have an important entrepreneurial role. However, I do believe unions can be economical. An employer might prefer to pay higher wages to a guild in exchange for the reduced costs that come from a skilled and reliable work force. The money saved on transaction costs can be spent towards wages.
I'm not sure what you're arguing here. I'm not saying that the existence of unions simpliciter proves that unions are economical, but I am saying that, if unions existed voluntarily in a free market, then they'd be economical.
tgibson11:I don't understand your second point. A high turn-over field is usually the sign of a very competitive market for labor - for example, technology in the late '90s. There was high-turnover for a reason, and it was because employers are constantly offering better terms in order to attract more and/or better quality employees. Did you have some other scenario in mind?
The scenario I was picturing was fast-food workers, who are not highly skilled, and frequently leave the industry entirely for other fields.
tgibson11:What I meant, was that IF the employer is going to pay a higher-than-market wage THEN profits will be lower-than-market. I should have qualified that with "in the long run." Yes, I suppose a firm with substantial entreprenurial profits (over and above the "normal" rate) could temporarily afford to pay above market wages and continue to earn an above-market rate of return on their capital. What incentive they would have to do this is not clear, since they could easily hire labor at the market rate if they chose to do so. Are you saying that a voluntary union could somehow prevent or discourage the firm from doing this? Maybe for a while, if there was a risk of having to replace the entire workforce at once - but there will always be employees willing to break ranks with the union for a small pay increase (especially if there is no threat of physical retaliation), and that can easily be made up for from the savings of hiring new employees at market rates. H***, unions today, with all their coercion and special privileges still have this problem. I just don't see how a voluntary union could make it work.
From your response here, it seems I misunderstood your original claim. With my new understanding, I agree.
Yep. But certifications have nothing to do with my point. I'm talking about union contract and you're talking about another function of unions.
Still, I see no benefits in such "reduction of transaction costs. You seem to be saying that employers LOVE the existence unions which would be absurd if you look at what's going on in reality.
1) Certifications can come from somewhere else rather than unions, and usually they do. Unions do not stand for "standardized", "certified", "qualified" or anything else but a group of people getting together to act to their interests, which is the primary purpose of unions.
2) One of the (mal)function of unions is, ironically, protect those who are not qualified.
3) Certifications do not help reduce transaction costs. Look at the FDA, do you know how long it takes to get your drugs certified? Certifications hurt the society in many ways that is hardly manifest because you don't see it. Who will see the harms of those helpful drugs get dragged in the process? People only see drug companies produced bad drugs and the victims crying on Oprah sort of thing. Still, drug company is the residual claimant and the harms are balanced off. That's self-correcting errors as opposed to non-self-correcting errors. This concept can apply to your senario of "surgeons" as well. You're seeing the harms caused bad doctors while ignoring the benefits those "uncertified" "good doctors" "could have" otherwise brought.
4) In what way wage standarization/stability will be beneficial? Are you a free market person? People who are more valued should be compensated more and people who are not shouldn't be. That's how we will benefit.
werty369:1) Certifications can come from somewhere else rather than unions, and usually they do. Unions do not stand for "standardized", "certified", "qualified" or anything else but a group of people getting together to act to their interests, which is the primary purpose of unions.
Thats how markets function.
werty369:2) One of the (mal)function of unions is, ironically, protect those who are not qualified.
So? Should business misdeeds that happen under government monopolies be used to slander markets?
werty369:3) Certifications do not help reduce transaction costs. Look at the FDA, do you know how long it takes to get your drugs certified? Certifications hurt the society in many ways that is hardly manifest because you don't see it. Who will see the harms of those helpful drugs get dragged in the process? People only see drug companies produced bad drugs and the victims crying on Oprah sort of thing. Still, drug company is the residual claimant and the harms are balanced off. That's self-correcting errors as opposed to non-self-correcting errors. This concept can apply to your senario of "surgeons" as well. You're seeing the harms caused bad doctors while ignoring the benefits those "uncertified" "good doctors" "could have" otherwise brought.
You miss the point. Its would have to be a voluntary system, and yes it would reduce transaction cost by spreading information.
werty369:4) In what way wage standarization/stability will be beneficial?
The same way that speculation is beneficial to the price system. You can not make correct economic decisions without accurate pricing.
werty369: Are you a free market person?
Read my posts.
Free market unions could be an efficient way of determining whether employees are paid the right wage. If they go on strike and the employer has no problem finding other workers to replace them at the same wage or cheaper, it means the strikers were already paid enough or too much compared to their market value. On the other hand, if the workers cannot be replaced at the current wage rate, this would mean that they may be right in asking for a raise.
Wouldn't this be like saying that "grape collectives" in a free market could be an efficient way of determining whether shoppers are paying enough for grapes?
The best I can figure is that unions would be largely replaced by "temp agencies" that actually do provide a useful service to both worker and the employers in a free society. I cannot see any market function for unions: what little function unions have now have no efficacy considered apart from legislative force. This is not to say, of course, that unions should not be permitted to exist voluntarily, only that they would have no value in a free market because they seek to influence wages in a manner apart from supply and demand.
Bosco:From some of the essays I have read on this site, I'm surprised that the views on unions expressed here are so neutral with regard to a unions function and efficiency in a free market.
Those articles are directed at disproving unions as they have existed. No one here is defending the use of coercion.
Today the government fullfills many market functions through regulation. It licenses people and tests products. Once the government has been removed voluntary organizations will rise to meet demand. Its often said that businesses will regulate themselves to protect themselves from consumers, but people do not act with perfect knowledge. Consumer advocacy groups, like Consumer Reports or car magazines, can increase market efficiency.
There is one thing here that everyone has forgotten when it comes to unions. That there is not one employer in the world, in the country, or even in our cities and towns. It seems to me that if I do not get paid enough by company A, I will go to company B for employment. Understanding that there is limited labour and many different consumers of labour, it seems that simply by unionizing rather than going to another employer undermines the claim that the workers are not being paid suffeciently. for if I could get a better paying job than installing a steering colum in a GM car, I would do that, but because I don't and instead go on strike... am I not saying that I am either not qualified for a better paying job, or find the higher paying jobs less desireable?
The question really is, Are unions logical? and I can not see how they are.
The economic impacts of unions should be well understood by everyone on this site so I don't see a need to go into that. But I would make a comment not in so far as actual unionization, but just of labourors working together.
When I worked a construction job this summer, we ended up getting behind on our project (interestingly enough it was the school of business and economics at Cameron University at Lawton, Oklahoma) and the site manager started requiring us to come in on Saturday to catch up. So thats what we did. except there was grumbeling among the work force (except me and a few other who like money more than sleeping in late) finally in a very informal meeting during a break on a friday, about 1/2 of the guys (and this was about a 25 man crew) vowed they would not show up on the next day. When I showed up to work the next day I was one of 5 including the boss. I suppose after hearing that so many would not show up nearly the other 1/2 decided they would not bother showing up either. those of us that showed cleaned up and did a few things and then were sent home at noon. That was the last Saturday the boss ever asked us to work.
So on very minor things, a sort of unionization can be effective. it was good for those who didn't show, and bad for me, the contractor and the customer. but its a free market, and so the contractor can either deal with it or find a new work force.
Everything you needed to know to be a libertarian you learned in Kindergarten. Keep your hands to yourself, and don't play with other people's toys without their consent.
Attackdonkey:So on very minor things, a sort of unionization can be effective. it was good for those who didn't show, and bad for me, the contractor and the customer. but its a free market, and so the contractor can either deal with it or find a new work force.
That is an example of a misallocation of resources. A more efficient allocation would pair the workers who did not want to work on Saturday with an employer that did not want to pay overtime and would pair your employer with employees that do want to work on Saturday.
Today many government policies hinder the ability of the market to allocated labor effectively. But even in freedom markets are not self correcting, individuals and groups needs to act as entrepreneurs in order to improve allocation. Labor organizations could be among them.
Are unions good for America?
During my life, I have worked in a union bargaining unit, for a short period of time as a member in good standing. So I have seen what goes on in the Union hall. I have also worked as management over union labor and management over non union labor. Having been on the inside and on the outside, I can unequivocally say that Unions are absolutely horrible for efficiency. The insane work rules that Unions insist on absolutely cripple production and greatly increase costs. Plus, the union keeps getting back the jobs of morons who richly deserve to get fired. Currently, I have to spend a good deal of my time on keeping my current workplace Union Free. Even if your company is not crippled by having a union, you still have costs in the ongoing effort to remain Union Free. Getting rid of the draconian laws that give Unions all sort of power and priviledges would be a great start.
Unions are an absolutely crippling force in American society.
Which reminds me of the one particular fond memory I have of Ronald Reagan, when he smacked down the Air Traffic Controllers Union and fired them all. That is the sort of thing I like to see when it comes to unions. :)
JonBostwick: However, I do believe unions can be economical. An employer might prefer to pay higher wages to a guild in exchange for the reduced costs that come from a skilled and reliable work force. The money saved on transaction costs can be spent towards wages.
As for Unions, I see them as a part of civil society where they have a role to play. Just like industry federation, churches, civil associations, clubs and the like can do. They day do not perform their role in a good manner is no argument against them in concept.
wgeary:When asked about unions, Ron Paul responded: Q: Are unions good for America?
There many types of labor unions in our economic system. Principally I see them as being wage bargaining unions in both open and closed shop states and then there are skill based unions who take the function of training the next level of journeymen seriously. Absent government protection the union that certifies they have skilled workers and guarantees the work would possibly be quite successful in a niche resembling the skilled worker temporary agency. The ability to collectively bargain for wages in a competitive market would be less likely to survive as the fundamental assumption of a truely competitive economy is that there are sufficient buyers and sellers of any good or service that market power would be hard to maintain.
An industry that has skills in high demand is likely to pay good wages and an efficient labor market would communicate the demand for that skill set to encourage entry in to the the new field. Thus, a responsive labor skill union would work to ensure their journeymen were highly trained and on the leading edge of skill sets and they would thus gain contracts as their reputation increased. I have a hard time seeing where the union is bad in this situation.
Now, on to the idea that a union exists to protect incompent members. Any union that does this to systematically does so at its own perile in any even near competitive economy. The production will move to where work is more competently and cost effectively performed over time. Incompetent managers can be much more detrimental to the company and in some cases is much more protected.
-steve in Portland.
Has there ever been a case where employers formed a 'reverse union' where a group of employers banded together and refused to pay any employees any more than a certain amount?