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Unions as Bottlenecks?

As I noted in my first post, Bottlenecks suggests that equality of opportunity requires substantial economic equality. I read Fishkin’s second principle as doing a lot of work here. A sufficiently robust set of welfare and income supports would make a far more diverse set of life plans realistic for citizens, and would reinforce families’ and individuals’ diverse views of the good.

What policies does this require? In addition to substantial tax-and-transfer redistribution, Fishkin also notes that opportunity pluralism might support public and private efforts to limit salary differentials within particular firms (p203), though he doesn’t develop the idea in detail. In this post, I’d like to pick up that line of argument, and suggest that opportunity pluralism would support quite robust wage-compressing institutions that limit pre-transfer income inequality. I’m thinking here of unions, which have traditionally been a very effective means to greater economic equality.

While unions’ macroeconomic effects are debated, it is certainly true that widespread unionization enables unionized workers—and at least some other workers—to bargain for significantly higher wages. This would seem to advance Fishkin’s second principle insofar unionized workers and their children will encounter a more open opportunity structure.

Unfortunately, can’t unions themselves become arbitrary bottlenecks? For example, craft unions representing skilled trades workers have often sought to exert bargaining power in part by controlling the supply of qualified workers, creating powerful incentives toward nepotism and even corruption. To be clear, industrial unions (like the UAW) and service unions (like SEIU, which represents mainly building service and health care workers) don’t tend to do this, organizing workers and exerting power based on collective action rather than job skills. Yet even industrial and service unions may become bottlenecks if they drive wages quite high in one segment of the market, sparking a “secondary” labor market with lower wages and/or informal work relationships. Alternately, in heavy industrial sectors like automobile production, strong collective bargaining units in final assembly may become a sort of labor aristocracy, with workers at parts suppliers suffering some of the consequences.

In other words, whether one is working in a unionized or non-unionized sector is in large part morally arbitrary. Surely concerns such as these have helped drive recent arguments that unionized public employees are overcompensated. Unions also raise concerns about compulsory association, and at times advance their members’ interests rather than broader matters of public concern. While both concerns are often overstated, is it any wonder that liberal egalitarians tend to endorse transfer programs rather than unionization as means to achieve distributive justice?

In future work, I’m planning to dig deeply into the idea of and place of unions in liberal distributive justice. For now I’ll just make two observations. First, as I noted in my first post, I strongly suspect that stand-alone redistributive programs—i.e., tax-and-transfer programs imposed upon laissez-faire labor markets—aren’t stable in the Rawlsian sense. Efforts to ensure distributive justice solely through post-earnings tax-and-transfer policies may generate feelings of resentment among those forced to pay higher taxes, and feelings of helplessness among...

Via Concurring Opinions

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