Though the batting average of solid economic analysis of the Employee Free Choice Act is not as I would hope (see our last post), Forbes just posted a very insightful look. The article author David Henderson points out that
“Government grants of monopoly (except, possibly, patents, which are problematic) are wrong whether they are granted to taxicab companies (as they are in almost all U.S. cities), TV cable companies, or groups of workers.“
He is speaking of unionization in general, and if you value the concept of true individual freedom, you have to agree with his argument. The article lays out in detail how under our current law (the Wagner Act as passed under Roosevelt in 1935), it is possible for even a minority of workers to usurp the rights of all of the employees at a particular company to negotiate for themselves. More to the point, the economics of such a monopoly are detrimental to the entire economic landscape:
“Decades of research by labor economists have come to the conclusion that the small percentage of workers who are in unions get higher wages but that most of these gains come at the expense of non-union workers. How so? In response to higher wages due to unionization, employers lay some employees off or do not hire as many in the first place. These workers then go to the non-union sector, driving wages down there. One might think that the solution is to unionize all labor so that there would be no non-union wages to be driven down. But if that were to happen, the effect would be zero wages for the millions of workers put out of work by union monopolies.”
And as the recent Boeing episode suggests, job loss would be magnified by companies moving completely out of the country wherever possible.
The Employee Free Choice Act is not just a bad idea, it is a bad idea that makes an already bad situation (a reduction of individual liberty) even worse!
