This podcast is all about labor unions – why they exist, their history in the U.S., a brief comparison with unions in other countries, the pros and cons of unions, and the larger political implications of their existence.
This is a controversial topic in U.S. politics, with many voters (and most elected officials) falling squarely into the “pro-union” or “anti-union” camp. But as with most issues, the truth is much more nuanced and complicated. Labor unions in the U.S. formed – and largely still exist – because of failures in market capitalism. As discussed in our very first podcast, capitalism is based on a number of principles to ensure resources are most efficiently allocated, but in real life those principles are rarely met. This is particularly pronounced in the labor market, which is fraught with friction and often monopsony employers.
This dynamic leads to a great imbalance in both the information and power held by an employer versus an employee, and unions were created as a counter-balance to that power. Terrible working conditions, poor wages, child labor, and other serious exploitation of workers created disasters and led to the rise of unions as well as government laws and regulations around labor.
Due to a combination of technological developments, the shift to a service economy, globalization, and concerted political efforts, the size of union membership and their political influence has waned since the late 20th century. The podcast also discusses the relative shift in union representation to the public sector and the practical and political implications of this.
There continue to be good arguments for and against unions, and although there are serious issues with unions – many of which related to their ironically “conservative” nature as organizations resistant to change – they remain an important political force as a counterweight to the greater political power of corporations and their political supporters. The discussion ends with some ideas on how both unions can be improved and how we can improve our market economy to mitigate the often contentious relationship between unions and their employers.
Key Terms Used
Cartel, Conservatism, Corporate Personhood, Free Rider, Friction (economic), Libertarianism, Monopsony, Perfect Information, Progressive Tax, Risk, Structural Unemployment