Collective bargaining is the negotiations between an employer and a group of employees that determine the conditions of employment. Employees negotiate for better wages and working conditions, while employers try to keep costs down to increase profit. When negotiations fail it is often due to neither side agreeing to make compromises asked by the other, and employees may go on strike and refuse to work. This tactic is designed to put pressure on an employer as it negatively affects profits. Going on strike may also be a hardship for workers who cannot afford to live without pay.
Public Sector Unions
Public sector workers sometimes work to provide essential public services. Government unions work for democratically elected officials representing the will of the people. Since public servants work for the people, any strike by them would be a strike against the people. However, this tactic cannot negatively affect profits because governments cannot be driven out of business and do not work to make a profit; therefore, government unions cannot be driven out of business either. They gain their revenue forcibly through taxes. As a result, there is no market limit to how much such unions can take from the public through increases in taxes.
Moreover, government unions themselves can choose who negotiates with them on behalf of the people, through their votes and political support. Collective bargaining for government unions enable them to essentially bargain with themselves for a desired pay, benefits, and working conditions. In return for not resisting to sometimes excessive union demands and/or providing public sector workers with their desired pay and benefits, the government unions provide campaign contributions to their political benefactors, financed by taxpayers who had little to no say in the bargaining decision. "This inherent conflict of interest involved in government unions leads to oppressive political corruption, where there is no political limit as well as no market limit to the plunder of the public by government unions," said Peter Ferrara at Pajamas Media.
Private Sector Unions
Within current market and legal checks, collective bargaining for private sector unions can perform a helpful market function in ensuring that employers keep up with market wages and working conditions as expeditiously as possible. If private sector workers do not like the pay, benefits, and working conditions offered to them by an employer, any strike by them would be a strike against the company. However, a union strike against the company may force the services it provides to be shut down while the employer(s) and a group of union employees negotiate the pay, benefits, and working conditions through collective bargaining. Under current law, there are market and legal checks on private sector unions to keep them from abusing the public. If private sector unions push too far, then their company will likely be driven out of business, which in most cases will happen when management fails to do its job in resisting excessive union demands. If management does resist, it happens in the form of locating business elsewhere to a better business climate.
Such was the case in 2009 for Boeing management in their decision to move a new 787 assembly plant from a potential location in Washington State to a more business friendly environment, after Washington's costly workers' compensation system created a competitive disadvantage that the company could no longer afford. When Boeing's Seattle workers wouldn't compromise with their excessive union demands, Boeing workers in North Charleston seized the opportunity and voted overwhelmingly to disband their union. They were rewarded by Boeing with a new 787 assembly plant in Charleston, S.C., rather than Everett, WA.
- Peter Ferrara. Even FDR Understood: No Collective Bargaining for Public Servants, Pajamas Media, February 23, 2011.
- Amber Gunn. Boeing Heads South For Better Business Climate: Washington State Politicians Are Surprised?, BigGovernment.com (Breitbart.com), October 31, 2009.
- Erin Covey. Lawmakers worried unions will push Boeing out, July 8, 2009.
- Michelle Malkin. Boeing workers vote to decertify union, MichelleMalkin.com, September 14, 2009.
- "The Wisconsin Assembly early Friday approved a measure to strip most government workers of collective-bargaining rights." Wisconsin Assembly approves controversial collective-bargaining measure Feb. 25, 2011