When Government Intervenes in Bargaining

A lot of conservatives have an incredible loathing for unions.  Which is one of the reasons why I differ from them as a libertarian.  In a free society, any group of people, including workers at a company, should be able to associate to achieve certain goals, including to increase their bargaining power in wage negotiations.  As I said here:

If a group of even two people want to get together at GM and call
themselves a "union" and approach management to negotiate, they should
be able to have at it.  In a free society, this is how things should work -- any
number of employees should be able to organize themselves.  If they get
enough people, then they will have enough clout, perhaps, to be
listened to by management.

Here is where the problem comes in, though.  Over history, governments have intervened to increase the power of unions vs. the companies they work for.  Some of the early legislation was fine from an individual rights perspective - e.g. "companies can't hire thugs to beat the crap out of workers to get them to come back to work."  However, over time, the government has passed laws to increase the bargaining power of unions artificially and to increase their power in general (e.g. to violate workers association rights by forcing them to join a pre-existing union or to at least pay union dues as a pre-condition to work in certain companies or industries).  In some states we have come nearly full cirle, to the point that it is almost impossible to prevent unions from using violence in strikes, for example against people crossing picket lines.

So when I see studies like this one, I don't see it as an indictment of unions per se, since unions exist in "right to work" states, but rather an indictment of government intervention trying to ham-handedly balance bargaining.  Here is the interesting chart, from a study by Arthur Laffer:


Michigan in particular has made itself downright hostile to employers.  Given that the official government position is that "we aim to tilt the bargaining power against you in your negotiations with your largest suppliers," it is a wonder any business locates there.

One Comment

  1. Iowalot:

    Though I consider myself a fellow libertarian, on this post I disagree. Collusion and price-fixing are bad on both sides of the employer/employee divide. If you support the ability of workers even voluntarily to form unions to elevate wages above individual supply/demand balance, do you also support the ability of employers voluntarily to form monopolies to elevate prices above individual supply/demand balance? Aren't both bad?