What Unions Do

February 7, 2008 | Filed Under Business, Democrats/Leftists, Economy/Finances, Media Bias, News, Publius Contributor, Security/Safety, Society/Culture, Unions, Warner Todd Huston |

-By Warner Todd Huston

Over at the Chicago Maroon (an Independent newspaper of the University of Chicago), Mat Barnum has a post that has some great points in it. In A union divided: Organized labor strikes out, Barnum discusses the writer’s strike and what is going on there.

I miss The Office. A lot.

Thankfully, though, my favorite show will likely return soon, as the writers’ strike appears set to end this week. Likely, this will be heralded as a victory for fairness.

To most, unions are the good guys, fighting for fair wages and just treatment. Opposing these principles are big, greedy businesses eager to abuse workers, firing them willy-nilly, paying them less than they’re worth, and ruthlessly busting their earnest attempts at organizing. This narrative seems particularly pervasive here in Hyde Park: From U of C students rallying behind the campus clerical workers union, to community members blocking a hotel deal because the operating company doesn’t use unionized labor, the vocal consensus is decidedly pro-union.

The problem with the simplistic portrayal of good workers vs. evil businesses is not necessarily with its depiction of employers—of course they’re greedy—but with its glorification of employees. Workers who form unions are self-interested in the same way businesses are.

Unions, just like firms, are happy to promote their own interests, even at the expense of others. Take teachers’ unions, for example. Most, like the National Education Association (the largest labor union in the country), have long opposed merit pay. They argue that it is not effective—but even if it were, unions would still be against it since it’s not in many of their members’ best interest.

This brings up another problem with unions: They represent all workers with one voice, when in fact different workers have competing interests. In the case of merit pay, good teachers are likely to be in favor of it (provided there is a way to accurately measure teacher performance), while bad teachers would be against it. How can the union, then, advocate for both groups? Put simply, it can’t.

In the end, unions provide unfair protection for below-average workers, and unnecessary protection for good ones. Many union contracts, for example, make it difficult to fire workers. The rationale is that employees should only be let go with “just cause” and that they deserve “due process” if they believe they’ve been terminated unfairly. This sounds reasonable enough, but in practice it means that employers will be hesitant—for fear of the protracted and costly process that could follow—to get rid of inefficient workers. In turn, businesses will be less likely to hire new workers, knowing that they might be stuck if they make the wrong choice.

This is all great news if you’re already part of a union. Even if you’re not that good at your job, you’re unlikely to get fired. Plus, you won’t have to face as much competition because it’s harder to break into the field. On the other hand, it’s not good for the rest of us. It means worse service or products if you’re a consumer, higher costs if you’re an employer, and a more difficult road if you’re a job-seeker.

There are many other reasons why unions are bad for anybody who’s not in one. They artificially raise wages, which distorts incentives and hurts businesses and consumers alike. They negotiate collective contracts, which generally fail to provide incentives for harder and better work, as pay is usually based on seniority. Their power structure (like those of some businesses) breeds corruption. They sometimes strike, causing a ripple effect that hurts many members of society (like my not being able to watch The Office).

In a free society, workers should be allowed to unionize as they see fit. They just shouldn’t expect special protection—and we shouldn’t have to pretend that unions are good for the rest of us.

Great stuff, Matt!!

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