Thursday, August 20, 2015

Look for the union label

Walter Russell Mead, understanding incentives:
Why, you might ask, would a labor union that is supposedly dedicated to increasing the wages of its members be willing to sign a deal that allows workers to earn less than the minimum wage the union has campaigned to pass into law? The unions have said it gives them more flexibility in negotiations and shields employers and cities against lawsuits. But the real answer, silly, is the exemptions create an incentive to force companies like hotels and fast food chains to recognize labor unions precisely so they can keep labor costs down.
But that's not the real reason, is it?
In other words, empowering labor unions to strike sweetheart deals with employers is a way to divert money from workers to union bosses. Some of the unions backing these measures are run by well-meaning people who are looking for ways to build labor’s institutional power at a time when globalization, immigration, and automation have made traditional unions less relevant than ever in the private sector. But these measures will attract the wrong people back into the union business and create incentives that make unions attractive targets for mob power. (Not that anything like this could ever happen, say, to the casino workers’ unions in Las Vegas.)
Solidarity forever, chumps.

1 comment:

Bike Bubba said...

But what employer wouldn't want a workforce of lowly paid union members? What could possibly go wrong?