Is Labor Law More Oppressive for Workers than for Employers?
By David Henderson
Sheldon Richman, with whom I seem to agree well over 90 percent of the time, writes the following:
Generations of government intervention have reduced workers’ bargaining power in favor of employers. Any interference with the free market that suppresses competition — occupational licensing, patents, subsidies, land-use restrictions, trade barriers, special tax treatment — reduces the number of firms bidding for workers’ services and also reduces self-employment opportunities. Even the labor laws reduce workers’ influence by, for example, outlawing wildcat strikes, sympathy strikes, and secondary boycotts. Abolishing the vast edifice of federal labor law would be more liberating for workers than for employers.
I don’t think his last sentence is correct. The main effect of the federal government’s labor laws is to give monopoly power to groups of workers. So abolishing federal labor law would be more liberating for employers than for the unions.
Now, Sheldon could mean that individual workers have less power because of the power that unions have over them. If that’s what he’s saying, then I agree. When I worked in a nickel mine in Canada, for example, I had to pay dues to the United Steelworkers of America. I would have been freer had I not had to pay dues. But I’m pretty sure that’s not what Sheldon is saying.
Two people who realized how badly unions treated their people were W.E.B. DuBois and Booker T. Washington. Although they disagreed on many other things, they agreed that unions made life much harder for black workers.
A good quick treatment of labor unions and their monopoly power is Morgan Reynolds, “Labor Unions,” in The Concise Encyclopedia of Economics. Here are two key paragraphs:
According to Harvard economists Richard Freeman and James Medoff, who look favorably on unions, “Most, if not all, unions have monopoly power, which they can use to raise wages above competitive levels” (1984, p. 6). Unions’ power to fix high prices for their members’ labor rests on legal privileges and immunities that they get from government, both by statute and by nonenforcement of other laws. The purpose of these legal privileges is to restrict others from working for lower wages. As antiunion economist Ludwig von Mises wrote in 1922, “The long and short of trade union rights is in fact the right to proceed against the strikebreaker with primitive violence.” Interestingly, those who are expected to enforce the laws evenhandedly, the police, are themselves heavily unionized.
U.S. unions enjoy many legal privileges. Unions are immune from taxation and from antitrust laws. Companies are legally compelled to bargain with unions in “good faith.” This innocent-sounding term is interpreted by the National Labor Relations Board to suppress such practices as Boulwarism, named for a former General Electric personnel director. To shorten the collective bargaining process, Lemuel Boulware communicated the “reasonableness” of GE’s wage offer directly to employees, shareholders, and the public. Unions also can force companies to make their property available for union use.