Labor Markets and the Jolly Monopoly

27 09 2012

I can’t believe I’m having to write this, but after a number of emails, twitter back-and-forths, and this fabulously stupid article by John Stossel at Reason, apparently it is in fact a thing that needs writing.

Critics of unions get easily worked up over the so-called “monopoly” that unions “enforce” in workplaces–their characterization of the requirement that upon a vote of employees, an employer must deal with an exclusive bargaining representative (i.e., a union) and may not cut individual deals. Basically, they say, if you work somewhere that is unionized, you are forced to join the union (this is technically untrue; at most, you are forced to pay an agency fee since the union is required by law to represent you); it is, they call it, “forced” rather than “free” association. Therefore it is the inverse of free association–and therefore it violates one of the most hallowed American rights, found right there in the First Amendment. Unions, unlike firms, get this “monopoly” power that they abuse to force people to pay dues. Outrageous.

Like so many reactionary arguments, it is elegantly simple and obvious until you spend an extra moment to think past the sloganeering.

Yes, in a superficial way unions act like monopolies–the sole “seller” of labor–in a single workplace or for a single employer. But that is only because the employer is a monopsonist–the sole “buyer” of labor. If you’re looking just at a single company, of course there is a sole “buyer” of labor–the single workplace. And if you’re in a situation where there is a single buyer, it only makes sense to allow the sellers to act like a single “seller”–that’s the only way they have equal bargaining power.
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The Chicago Model Fallout Revisited: Catharsis, Context and Circumstance

15 09 2012

The Chicago Teachers’ Union strike was not unpredictable, nor was it sudden, nor was it over merely details, free of context, that are the subjects of the collective bargaining negotiations.

Since at least 1995, but particularly since 2004, Chicago’s students and teachers have borne the pain of experimentation, like lab mice in an education policy laboratory. That context is important, and it is inextricably linked to the nature of the strike and the source of its support among teachers, parents, students, the public–most everyone it seems, except journalists and powerful politicians.
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