Unions' 'One Size' Doesn't Fit All

COMMENTARY Jobs and Labor

Unions' 'One Size' Doesn't Fit All

Sep 1, 2012 2 min read

Research Fellow, Labor Economics

As research fellow in labor economics at The Heritage Foundation, James Sherk researched ways to promote competition and mobility.

How would you like to work for someone who ignores your good work? What about someone who promotes only on seniority? Probably not a boss you’d like to have.

However, this is what unions offer workers, and it’s why their membership has fallen to record lows.

Collective bargaining assumes employees can get a better contract by negotiating together. The trade-off is the same contract applies to everyone, regardless of their personal contributions.

In the manufacturing economy of the 1930s, this may have worked: individual skills mattered less on the assembly line. Since then the economy has changed dramatically. Union representation has not.

America has developed into a knowledge and service economy. Computers automated most of the repetitive tasks of the past. In recent decades, the fastest growing job sectors have been technical, managerial and professional jobs, such as nurses, marketers and website designers.

In such jobs, employers value skills and abilities. Employees also want and expect to be rewarded for their individual achievements. Performance-based pay has become widespread and popular. But unions are stuck in a “one-size-fits-all” world.

Most collective-bargaining agreements still prohibit individual raises or bonuses. Union work rules prevent employees from transferring within their company. Seniority systems force workers to wait in line for promotion.

In the past, unions could allay these concerns with higher wages. Not anymore. Deregulation and free trade gave consumers choices. If unionized businesses pass on higher costs by raising prices, Americans will shop elsewhere.

The hefty raises unions promise would bankrupt most firms, and they know it.

Government unions have done better: They do not need to replace members lost in bankruptcy. A unionized government does not go out of business; it just raises taxes. So most union members now work in government.

Even in government, though, unions are retreating. Union protests of Wisconsin Gov. Scott Walker’s restrictions on collective bargaining made headlines. Less noticed was the fact that — on the same day Walker won his recall election — residents of liberal San Jose overwhelmingly voted to cut local government pensions.

To survive, unions need to reinvent themselves. Unfortunately, they feel little day-to-day pressure to do so.

Unions won’t reform as long as the law gives workers little say in who represents them. Even if they did, one-size-fits-all contracts appeal to few employees. Congress and state legislatures can fix both these problems. They should allow workers to choose anyone to represent them.

If this happened, union members could stick with their existing union. Or some employees could switch to another union. Others could bargain for themselves. This would make unions compete for workers’ business and allow employees to choose representation that suits them.

Making union representation voluntary would compel unions to compete and innovate. Besides collective bargaining, they could offer job training, advice on retirement investments and career planning. Letting workers choose their own representatives could make unions relevant and attractive once again.

James Sherk is senior policy analyst in labor economics at The Heritage Foundation.

First appeared in Pittsburgh Pribune-Review.