A Challenge to Fans of Collective Bargaining
January 4, 2012

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If you believe collective bargaining is a good thing, I'd like to challenge you to explain just how it benefits society. I'm a liberal who's against unions, so I don't get along with either liberals or conservatives. If you could convince me that collective bargaining really is good for the country, maybe I could at least make some liberal friends.

I'd offer a reward, but all my money is spent on Freedom of Information requests. Besides, I'd have to find a knowledgeable, impartial judge to decide the validity of your argument, and that would be difficult. So you will get nothing for providing your argument other than the satisfaction of proving me wrong.

But let me warn you that if your position is that collective bargaining is good because it increases workers' wages, I have an answer:

Yes, collective bargaining does increase the wages of union workers, but that increase comes out of the pockets of others, and I don't mean the employers. Collectively-bargained wage increases result in price increases. Higher prices cause sales to go down, resulting in layoffs. The sales that do occur take more money out of customers' pockets, who then have less to spend on other stuff, hurting both the customer and other businesses.

An arbitrary wage increase - any wage increase not the result of market forces must be paid for elsewhere. If that were not true, we could simply set the minimum wage at $50 and move everyone into the upper class. Real wages increase only when production increases, and that happens when new businesses are started or more people go to work or when productivity increases as a result of advances in technology or increased worker skills. This is the way it is and always has been.

The belief that unions increase incomes comes from what economist Henry Hazlitt called the fallacy of overlooking secondary consequences." Hazlitt said there is a tendency for people to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy would be on all groups.

So you've got your work cut out for you. Send your argument to steve_harry@yahoo.com. I won't post anything you submit without your permission.