Unions: Hindrance or Essential to Free Markets
For people who believe unions only add costs, they probably looks at “Right-to-Work” laws as prudent and beneficial to workers. The fault of this perspective is that it assumes employers will serve employee-interests by offering employees viable wages and reasonable working conditions instead of suppressing wages and creating abusive work environments. For executives and other individuals with highly coveted backgrounds, this issue is of little concern as they have the leverage to negotiate as individuals. When it comes to those individuals with little leverage in their industry and workplace, collective bargaining offers them leverage over their employers, who could otherwise undermine their demands by simply replacing them.
Furthermore, 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 interests in terms of compensation. 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, a weaker economy exists when the bulk of workers do not have adequate leverage in the job market. Where employees work together in some fashion to help ensure their interests as employees are met, they improve their outlook and the outlook of the economy.
Ironically, American society constantly speaks of free enterprise then uses government to undermine the collective bargaining rights of US citizens. Americans even proclaim the use of stock exchanges "democratizes" the pricing of commodities and the ownership of corporations, but justify actions against American 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. Through political pressure, legal measures, policies, such as supposed “Free Trade deals” that have too often hurt the US domestic economy, American 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.
That said, a downside to the now-waning influence of union influence can be a lack of competitiveness that results in lower workplace productivity and poor employee discipline, but this is a scenario that requires 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 eliminate 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 mainly be addressed internally, yet they are part of a healthy economy.