What to Know About the Rights and Economics of Unions

Not too long ago, the media was in an uproar about public sector unions and the debates that were being made in Wisconsin. In particular, Governor Scott Walker argued that changing the negotiating rights of unions would help to balance the state budget and save jobs. While this issue has been discussed by other fellow PolicyMic writers, I would like to expand on this argument by trying to answer the following questions: Is there a right to unionize, and what role should the government play? The answers to these questions are vital to both the future of our economy and freedoms.

The decision to join a union and pool individual resources together are choices that are made by free people, not particular “rights” set by a government entity. I would argue that we do not want these to be rights, because if they are deemed rights by our government, then they can certainly be taken away.

Unfortunately, there are many issues that have become rights over time because of social justice arguments, such as a right to unionize, right to an education, right to healthcare, etc. I argue that we do not have a right to any of these. We have a right to freedom that will allow for the choices to be made and this right to freedom allows us to obtain healthcare services, learn in schools, and unionize. Expanding the rights that we have through government intervention is the wrong path to bringing about economic prosperity and increased liberty for individuals. 

Moreover, our right to freedom provides the means to organize into a union, but the union itself should not have any rights. A union’s primary goal should be to maximize the satisfaction of its members by negotiating higher wages, expanded benefits, and better working environments. These were the essential components that popularized unions in the early 1900’s, but they failed to continue this over the years.

Instead, individuals have found it more beneficial to argue on their own behalf because it is not in their best interest to pay fees to a union that is looking out for the union and not its members. In other words, the goal of unions has drifted towards gaining more due paying members to finance its bureaucracy. In addition, unions demand wage floors that are above the equilibrium wages in the labor market that creates a situation of higher unemployment.

Political economist Adam Smith noted that the best outcomes arise when an individual acts in his/her best interest. John Nash wrote that an optimal scenario occurs when each individual does what is in his/her best interest and in the interest of the group. Both of these teachings – allocative efficiency and Nash's equilibrium – are violated by unions.

While the freedom to choose allows individuals to join together, pay dues, and argue for increased earnings, there is not a right that should be imposed by government to unionize. This is based on the foundation that higher pay is not a right, which unions try to make the case for, but higher pay comes from increased productivity.

It appears that there is an ideology in our society that "big government" equals "good outcomes,” and this has blinded us to reality. Case in point, the Recovery Act of 2009 by President Obama pushed many tough decisions by states down the road because of the Federal funds that bailed them out. One reason why the stimulus package was ineffective, since the funds received by the states were not used to spend on projects or create jobs, but were used to pay down debt and keep public workers in place. Funding from the federal government to the states have now slowed or stopped, and now states are being forced to make the tough choices and balance their budgets.

Cutting bargaining criteria from unions and balancing budgets are tough choices and it would be great if no one had to lose their job and everyone got pay raises, but that is not how it works in the real world. We are not given a right to a job. Although it may not be popular, firing teachers who are not good at teaching, bringing down benefits and wages of union workers to market-based levels, and cutting waste from state and federal government agencies across the country would be one of the best formulas for putting our country on a sustainable fiscal path. These state governments should not be dependent on the federal government and individuals should end their dependence on the government as well.

Although the media hype about unions has subsided, there is still more that must be done. When given the chance, a return to federalism and individual responsibility will help America prosper.

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