Economies are the engines of communities and they run most efficiently when their numerous parts are free of destructive interference. Only when the capitalist mechanisms of an economy are allowed to function properly and play their proper role can an economy provide for the various interests of the People it serves. In countries like Brazil and Venezuela, government interference has inhibited the growth and development of their economies to point even government can no longer provide for the basic needs of their Peoples while criminal gangs and oligarchs are free to divert so much wealth into their pockets that broad-base economic development is nearly impossible. In developed countries like the United States, lackluster GDP growth and slow productivity growth are also products of destructive government and private-sector interference.
When consumers are able to buy products and services, businesses are able to stay open and pay their employees. This is only possible, because wealth is able to circulate throughout the economy at a continuous and sufficient rate to maintain consumer spending. Economic growth is one means of ensuring wealth circulates throughout the economy, yet economic growth does not necessarily guarantee enough wealth will circulate to all corners of the economy. As the economy is two-thirds consumer spending, payroll is the principle way in which wealth is distributed and circulated. Consequently, widespread employment, high worker productivity, and healthy wages create a strong, healthy national economy. As such, there is a need to empower workers and free the labor markets of destructive interference.
Proponents of “free market” policies often speak of free enterprise then use government to undermine the collective bargaining rights of workers. Through political pressure, legal measures, policies, such as supposed “free trade” deals, which have too often hurt domestic economies, public officials have intentionally undermined a key segment of free enterprise system despite their professed devotion to it. Quite frankly, attacks on collective bargaining are clear examples of government overreach and destructive private-sector interference in the labor market. People who believe unions only add costs see policies like so-called right-to-work laws as prudent and beneficial to workers, yet they actually deleverage, and thus disenfranchise, workers.
Just as democracy functions based on unanimous group decisions, union membership must be based on the majority vote of a workforce, not the will of dissenters. Just as individuals cannot avoid taxes by opting out of a democracy, workers should not be able to opt out of union membership. Ironically, anti-union proponents of right-to-work laws often like to proclaim that the use of stock exchanges “democratizes" the pricing of commodities and the ownership of corporations while justifying actions against workers, because unions increase costs. Where unions help sustain Middle Class incomes and standards of living for a broad range of employees, wealthy business elites looking to earn big when prices peak, often largely due to speculation, use stock exchanges to push up prices, thereby increasing costs and distorting the economy in their favor.
Furthermore, the problem with right-to-work laws and the general decline of collective bargaining is that proponents assume employers will serve employee-interests by offering employees viable wages and reasonable working conditions, instead of suppressing wages and creating abusive work environments. Markets work most efficiently when fundamental forces like supply and demand can act to properly price goods and services. If drivers, for example, could simply dictate what they want to pay for a gallon of gasoline, the price would fall to an undesirable, or even unsustainable, level. The same is true of employers, i.e. consumers of labor, when their employees must compete against each other and their own financial interests.
A lack of collective bargaining helps drive overall payroll costs down. This means lower pay, lower standards of living, smaller tax bases, and less consumer spending over time. In other words, less wealth is circulated when the bulk of workers do not have adequate leverage in the job market. When employees can work together in some fashion to help ensure their interests as employees are met, they improve their outlook and the outlook of the economy. For executives and other individuals with highly coveted backgrounds, this issue is of little concern as they have enough leverage to negotiate as individuals. When it comes to those individuals with little leverage in their industry and workplace, collective bargaining puts them on more equal footing with their employers, who can otherwise undermine worker demands by simply replacing them.
On the other hand, unions are also a source of interference. Today’s unions are businesses. Unfortunately, the leaders of these businesses are too often more concerned about their own paycheck and power than the interests and will of their members. Beyond corruption, unions have become far too involved in politics, i.e. selecting political leaders instead of ensuring worker rights. Unions have also failed to globalize alongside the globalizing economy. As the economies of the world merge into one giant global economy, effective representation is needed around the world, yet the unions of developed countries have turned inward. In fact, many have been willing to sacrifice the pay, benefits, and work conditions of nonunion members to further enrich their shrinking membership base, which means unions are creating an elitist middle class instead of helping the labor market reach equilibrium.
The major downside to the waning influence of union influence for business is a lack of competitiveness between employers over the best employees, which can result in lower workplace productivity and increased employee discontent. With or without unions, these issues can only be addressed with better employer-employee relations. Relationships between employers and unions have often been quite hostile due, in part, to the fact this free enterprise solution to unhealthy, abusive business practices was born in an era of violent corporate reprisals. As such, the solution is not to undermine collective bargaining, but rather, to improve communication between managers and union workers for the betterment of business. Moreover, unions and other collective bargaining organizations have their faults, which must be addressed internally by union leaders and members, yet they are a necessary part of a healthy economy.
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