Union-Busting Is Theft -- a Weapon of Class Warfare from Above
Continued from previous page
Now let's look at how that theoretical construct plays out in the real world of the American workplace. When an individual worker negotiates a price for his time, effort and dedication with any business bigger than a mom-and-pop operation, there's quite a bit of explicit coercion (much of it in violation of our labor laws), which I'll get to shortly. But there's always an element of inherent coercion when an individual negotiates with a company alone, because of the power differential: a company that's shorthanded by one person will continue to function, while a person without a job is up a creek with no paddle, unable to put a roof over her head or food on the table.
The "information asymmetries" in such a negotiation are immense -- they're actually more like process asymmetries. Companies spend millions of dollars on human resource experts, consultants, labor lawyers, etc., and they know both the conditions of the market and the ins and outs of the labor laws in intimate detail. While working people with rarified skills are often members of trade associations or guilds, read trade journals and have a pretty good sense of what the market will bear, many low- and semi-skilled workers don't know their rights under the labor laws, don't know how to assert them and (rightfully) fear reprisals when they do. They often have little knowledge of the financial health -- or illness, as the case may be -- of the company to which they're applying for a job, how profitable it is, how much similar workers in other regions or firms earn, etc.
For the majority of Americans who lack scarce talents or a high level of education, negotiating a price for one's time with a firm on an individual basis is anything but a free market transaction. That's where collective bargaining comes in -- when workers bargain as a group, they do so on a level playing field with employers, and the resulting wages (and benefits) are as high as the market can bear, but no higher.
Unions, like corporations, have a great deal of information about the market. They know how a firm is doing, how profitable it is and where it is relative to the larger industry in which it operates. They know what deals workers at other plants have negotiated. They have attorneys who are just as familiar with the American labor laws as their counterparts in management.
And while an individual has very little leverage in negotiations -- again, most companies can do with one less worker -- collectively, an entire work force has the ability to shut down or at least slow down a company's operations if management chooses not to negotiate in good faith (as is often the case).
It's not difficult to quantify the difference between what most hourly employees take home and what the free market would dictate. Economists Lawrence Mishel and Matthew Walters estimate the "union wage premium" -- the amount of additional pay a unionized worker receives compared with a similar worker who isn't a member of a union -- at around 20 percent (that's in keeping with other studies, using different methodologies, which put the premium in a range between 15 and 25 percent). If one includes benefits -- health care, paid vacations, etc. -- union members make almost 30 percent more than their nonunion counterparts.
Another way of looking at it is this: Millions of American families are scraping by on below-market wages, and if that weren't the case, there wouldn't be such a large group of American families among the "working poor." In economic theory, it's a given that a producer can't sell his or her wares below the cost of production. The equivalent to the cost of producing a gizmo, when we're talking about the sale of someone's working hours, is the cost of providing basic necessities -- nutritious food, safe housing and decent medical care. These are out of reach for the almost three million American families who work full-time and live beneath the poverty level. According to the Working Poor Families Project, half of the working poor have no health insurance.