Mon, 24 May 2004

The Unions are for the Unions

Just as in Lewis's The Last Battle, where "the dwarfs are for the dwarfs", so, too, "the unions are for the unions". Make no mistake about it, unions are not in any way public interest organizations. Oh, they'll tell you how good they are for society. There's even a bumper sticker that reads "Unions: the people who brought you the weekend." Don't believe it for a moment.

One of the functions of a union is to monopolize labor. To the extent that they actually succeed in doing so, unions are bad for society in the same way that any monopoly is bad for society. In case you haven't been following along on the play-by-play, it's because a monopoly can charge monopoly prices. A monopoly gets monopoly prices by restricting the amount of production so as to move the price point to a more profitable position. You can see, now, why unions are always threatening to strike, and why unions are hard to get into.

A union doesn't have to form a monopoly to be useful. They can still create benefits for their members by reducing transaction costs. They can also contract for insurance, which is substantially cheaper if you can supply the insurance company with a need-blind pool of customers. They can administer a pension program. They can supply social needs, like picnics and parties.

Unions claim to have coerced employers into reducing the work-week to 40 hours (in the US; 35 in France and Germany). This probably isn't the case. A union would have to have monopoly power over all labor, and that's never been the case. I don't remember the exact number, but even in the heyday of union power, they never had more than 50% of the work-force as members. What's more likely is that as people became more prosperous, they valued leisure over the incremental hour of work. In a free market, people generally get what they can afford. When blacks were freed following the US Civil War, they worked fewer hours per day. Not because blacks are lazy, but because they preferred leisure over the marginal value of those extra hours of work. Freed of the need to make a profit for their owner, they could afford the extra leisure.

Now I want to look at how unions form their monopoly over labor. It's not pretty. A monopoly is hard to maintain, particularly when it's over the efforts of individuals. Basically, some union members were assigned the task of beating the crap out of people who weren't union members, but did union work. Or burning their cars, or houses, or whatever. Most of the methods for monopolizing labor involve intimidation and/or actual violence.

Today, unions use the violence inherent in government to get their monopoly. In most states, a workplace is either unionized or it is not. If it is unionized, then you MUST be a member of the union to work there, and you MUST pay union dues. A simple majority vote of the workers is sufficient to unionize a workplace. The employer is very strictly limited in what she can say about unions.

It gets worse: unions, through the voting bloc of their membership, have extorted union workplace rules out of governments. As the membership of unions in corporations has decreased, it has increased in local governments. Yes, your taxes to go support unions whose purpose is to benefit a small class of workers, and the hell with everybody else. Outrageous? Enough to make you into an angry economist? It has me.

Update Sun May 18: the head of the CWA local, Mark Seymour, has a letter to the editor in today's paper, complaining about the DANC fiber. He uses some good reasons, but also a bad one (from an economist's perspective): because it might throw some CWA union members out of work. Sorry, Mark, I count you as a friend, but preserving your job is not a good reason to not improve society. It so happens that we're arguing the same point, but your reasons for doing so are not my reasons.

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