As promised, I have two guest writers presenting their cases for and against unions as a follow up to the previous post (here) or part 3 to this series in favour of unions (here). Below is the first of the two follow-up posts, making a case against current union relevance.
Both of my guest writers have requested to remain anonymous, however, the content is still excellent as you can see below!
Lost amid most debate on unions is a tremendously important distinction: what sort of union do we mean? A private sector union or a public sector one? In the mind of most people, unions are associated with mining towns, manufacturers, and other industries tilted toward large employers with little geographic choice among workers. However, in 2018, it's these exact industries that no longer find themselves unionized: there are record low rates of 20% or less across most private sector industries. And a lot of this makes sense to a degree. Labor markets 100 years ago were not really markets in the true sense of the word: workers relocated without perfect information, they didn't have the buildup of capital that exists now allowing for more flexible job searches, the safety net of unemployment insurance systems still hadn't come into being, and mobility has never been more affordable than it is today.
However, one type of union remains strong: public sector unions, and it is these unions that receive the ire of most government reformers. Unlike private sector unions, which, at best, sit on one side of the bargaining table, public sector unions effectively sit on both sides of the bargaining table through their political action at the state and local level that ensures the very elected representatives whose responsibility it is to negotiate with these unions over salaries, benefits, and work requirements. And so it's unsurprising that this moral hazard has manifested itself in union heavy states over inflated public sector benefits resulting in debt, tax burdens, and budget crises. This in part explains the unexpected outcome that most of the heaviest tax burden states in the country also are the most indebted and the most unionized. In New York, Connecticut, New Jersey, Illinois, and California, unions have the strongest legacies of political action, and unsurprisingly these same states all suffer from the highest tax burdens of any other states, while also having the highest debt loads.
One would think that high debt and high taxes wouldn't go together; it stands to reason that a state with high taxation should at least be paying for itself with those taxes, while conversely, a state with low taxes is somehow shirking its spending responsibility! Instead what we see are states with low taxes and low debt, and states with high taxes and high debt... the common denominator being high levels of political action on the part of public sector unions in the latter.
Simple associations are of course not conclusive economic study, however, the correlations are striking and the theories make sense. In addition to the concerns about moral hazards with public sector unions, there's a deeper more fundamental argument against the way they've existed to this point: their advocacy is by-definition public policy advocacy and political speech: therefore compelled unionization is compelled political speech, something nobody should ever be forced to do.
In a free society, one has a fundamental right to organization and to collectively bargain if they so choose. However, forced unionization and forced political speech are the opposite of freedom, and in 2018 it's time to do away with the moral hazard and injustices they create.
A great argument! Again the purpose of having these guest writers is to show how several professionals, from different backgrounds and worldviews, can all hold differing thoughts on a subject matter. As a result, it is important to be critical of any idea masquerading itself as the only truth. Whether that be a statement I have made here, in class, or we have heard on the news, the majority of statements are normative in nature, even when backed with positives.
As professionals, the important aspect is to allow our views to be challenged, entering into debate, not conflict. What are your thoughts? feel free to comment below.
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