Friday, February 18, 2011

"Worker rights"

The term "worker rights" is often used, particularly in the context of collective bargaining. For example, in this column, Governor Walker of Wisconsin is accused of "removing bargaining rights" and "undercutting worker rights".

I have no problem with the concept of unionizing or collective bargaining. What I do have a problem with is when an employee is required to join a union and is not allowed to negotiate outside of the collective bargaining agreement. In other words, collective bargaining is fine, but it crosses the line when it takes away the right of an individual to engage in "individual bargaining".

For example, in Wisconsin, imagine there is a job opening, and the collective bargaining agreement states that that particular position requires a salary of$50K per year and must include X and Y benefits. My question is, can some unemployed person compete for that job by saying, "I really need the work, I would be happy to do the job for $40K". Or can someone say, "You don't need to buy health insurance for me, I already have it through my spouse".

I would consider the right to make those offers and engage in individual bargaining part of "worker rights". But if that is not allowed, then "worker rights" are not actually rights at all, they are just ways that those who are already employed reduce competition for their jobs. In the name of “worker rights”, they actually take away the rights of the unemployed to compete for jobs.

But I am no expert in public employee unions and collective bargaining, so maybe I am wrong about this.

[Update]

Here is another way to think about it:

Imagine you have two people. Both equally qualified for an opening. The union's collective bargaining agreement says the state must pay $50K. The first person doesn't really need the job. Their spouse makes $150K plus per year, they just want the job to make some extra money. And then there is another person who really needs the work. Their family is in big trouble, and they really need a paycheck. Therefore, to get the job, that second person is willing to work for less; they are willing to accept $40K per year.

Generally, the market would handle this problem beautifully; the problem being, which worker needs the work the most? The market signal is the price, in this case the price that the worker is willing to accept as a wage. The offer of the lower wage provides the information regarding who needs the job the most. But with collective bargaining, this market mechanism breaks down.

The union would say to that person - too bad. You are not allowed to compete for that job based on compensation. That would violate our precious collective bargaining agreement.

In the name of "worker rights", the union took away the rights of that person to negotiate directly with the employer. The union says...I 'm sorry if you are about to be put out on the street, we need to keep the wages of our union members nice and high.

I find that morally reprehensible.

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