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Support for unions is based on a basic misunderstanding of economics.

It is not mandates from the state that lead to wages and work conditions improving. It's rising demand from employers, as their revenue increases, and they compete with other employers for a limited pool of workers.

Unions obstruct the flexibility and freedom of the market, and thereby hamper economic efficiency and competitiveness. Firms will, all things being equal, see less revenue growth in a unionized labor market, than a non-unionized one.



Precisely. A union is a cartel. It exists to restrict supply of the product they sell (labour) in order to fetch a higher price. They work just like any other cartel, for instance OPEC. Cartels benefit at the expense of everyone who is not in it. They perform rent-seeking behaviour to extract more than the product they sell is worth.

From the perspective of an economist, all cartels are bad, whether they deal in oil or labour or anything else.


> all things being equal

The whole point of unions is to affect change, so what does that sentence even mean?

All else being equal means the union did nothing to change anything, and therefore is 100% overhead.


The changes that unions make will not neutralize the negative impact they have on an industry's efficiency/competitivess.

The outlier is if unions succeed in changing immigration policy to restrict the inflow of foreign labor. That can have unexpected effects that boost the country's economic growth rate or at least help its wage growth rate.

Depending on the situation, immigration restrictions can also harm the country's economy/wages.


Yes, but all else is not equal, so...

Unions are there as a counterpart to business screwing employees.

I understand the US has a different experience with unions than the rest of the world, but they can be really good.

Employers have certainly tried to screw me (e.g. "you need to work overtime with no pay"), and it's really useful to have someone have your back saying "uh, nope that's not legal", instead of being alone as a newgrad.


Communal support (e.g. telling your friends about your work situation, and receiving advice from those who are informed) and legal mechanisms like lawsuits already ensures workers are by and large receiving the best the market can offer them.

The effect that unions have on ensuring employment contracts are not being broken by exploitive employers pales in comparison to the effect they have in restricting the labor market by giving unions what effectively amounts to government-enforced monopolies over various work units, which lets unions exploit companies.

There are numerous alternatives to granting unions enormous extra-contractual powers over employers that are available to society to prevent employer violations of labor contracts.




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