The Illogic of Collective Bargaining


In light of the following, I have a hard time understanding why people think collective bargaining is a good thing:

  • Economists say unions cause unemployment and reduce total income.
  • Heavily-unionized Michigan has led the nation in unemployment since 2003.

Here are some possible explanations why collective bargaining supporters think the way they do:

  • Union workers are better paid than non-union workers.
  • Collective bargaining has been law for 75 years (since 1935). If it were wrong, the Wagner Act would have been repealed long ago. Congress makes no mistakes.
  • The Wagner Act was signed into law by Franklin D. Roosevelt, the president who got us out of the Depression and led us to victory in World War II.
  • There are folk songs about the struggles of union workers. Would Joan Baez, Bob Dylan and Pete Seeger steer us wrong?
  • Supporters are Democrats, and union PACs provide huge amounts of campaign contributions to the Democratic party.
  • Whether unions are bad or good is not something they give much thought, but people they respect, like President Barack Obama, are union supporters.
  • They are among the diminishing number of private sector union members who still have a job, and they are paid good union wages.
  • They are among the growing number of public sector union members, and they are paid good union wages.
  • They had a parent who was a union member which enabled them to get a college degree so they don't have to work in a factory.
  • They are retired union workers getting generous pensions and health insurance.

Collective bargaining believers apparently think the employee should determine how much he is to be paid, not the employer. But that isn't going to work, is it? The employee thinks mainly of his own needs, while the employer is concerned with survival of the business. Who would you trust to make the right decision? Of course, a government arbitrator could be called in. Does he know better than the employer? What special wisdom does he have that would allow him to determine the proper wage? Could he possibly be influenced by the political beliefs of the people he is working for?

The most common argument for collective bargaining is that it gets workers better wages. If it was simple as that, why don't we just set the minimum wage to $20 an hour? Hell, why stop there - make it $100 an hour. More is better, right?

We'd all like everyone to have a good-paying job, and we know how to make that happen: help people get the job skills that are in demand. As long as society is making an honest effort at that, we have no need to worry about how much workers are paid. A free labor market rewards them according to how much we value their contribution.

But we don't trust the market, so we support the notion that employees should demand the wage they think they deserve, and that it is OK for them to shut down an employer when he doesn't give in. Or we believe that a government arbitrator is blessed with the wisdom to know what is fair and the integrity to so choose.


Unions are Killing Michigan
The Wagner Act
What Economists Think
Why the Market Wage is Better
The Illogic of Collective Bargaining
Market Wage vs. Fair Wage
Imagining a Free Labor Market
Rights and Freedom
Destruction of the Middle Class
Employee Free Choice Act (EFCA)
Job Security
Collective Bargaining and Unemployment
Social Costs of Collective Bargaining
Ending Fringe Benefits
Democrats and Unions
Collective Bargaining in Government