Wednesday, March 23, 2011

Why Unions Matter in the US. A Short Lecture.

(Let's see how this works with a snot-filled head. Yes, I'm still sick which should be impossible for us divines)

Unions increase the negotiating power of workers. This is important when the other side in the negotiations consists of humongous firms, such as is the case with oligopolies or monopolies or with state governments. It makes no sense to pretend that someone interviewing for a janitor's job at a large firm has the same negotiating power as the firm. Indeed, the very term "negotiation" makes no sense in that context. As Galbraith has argued, unions provide the necessary countervailing power for large employers. Even with all their imperfections, unions can guarantee that the janitor in my example has rest breaks and some protection against hazardous chemicals, say.

Those who wish to kill unions because of their market power should also wish to kill firms with market power. All the negative arguments (and more) about unions apply, in mirror image, to the large employers. They have the ability to depress earnings of those they hire and the ability to make the working conditions dangerous. That the enemies of the unions tend to be the friends of monopolized industries shows that the concern about market power doesn't extend everywhere.

Unions also matter in the political market place. Out of the ten largest donors to political parties, three are unions, and those are the only three which do not donate only to Republicans. If unions can be de-fanged altogether (and we are almost there), one of the few wider channels of donations to the Democratic Party will also die. That the Democrats in the Congress don't appear overly worried about this makes me wonder what color the sky might be in their world.

(Why are longer words and cumbersome sentences easier to make when one is not feeling well?)