Day: December 30, 2019

Business-people-finding-solution-together-at-office-cm

Press Release: Report shows possible benefits to workers, employers, and unions from increased competition in representation

December 30, 2019

FOR IMMEDIATE RELEASE

Media Contact:
Eric Fruits, Ph.D.
(503) 242-0900
eric@cascadepolicy.org

PORTLAND, Ore. – Research published by Cascade Policy Institute concludes workers, employers, and unions could benefit from increased competition among labor unions. Competition among unions and workplace freedom would lead to improved choice and representation for workers, reduce costs for employers, and may lead to increased union membership.

Introducing competition among unions can be accomplished in several ways. States, such as Oregon, could pass legislation allowing for competing bargaining units and forbidding “no raiding” pacts among unions. In addition, litigation challenging exclusive representation on First Amendment grounds would present a logical next step after the U.S. Supreme Court’s Janus decision.

Inter-Union Competition and Workplace Freedom: Ending Exclusive Representation was authored by Eric Fruits, Ph.D., a Portland-based economist. Fruits is president and chief economist at Economics International Corp., a consulting firm specializing in economics, finance, and statistics. He is also Vice President of Research at Cascade Policy Institute and an adjunct professor at Portland State University.

Fruits says, “First principles of freedom of association dictate that workers should be allowed to choose whether to be represented by a union and should be allowed to choose which union represents them. Aside from first principles, workplace freedom provides individual employees the opportunities to negotiate the wages, benefits, and working conditions that work best for him or her as an individual.”

Labor unions exist to improve compensation and working conditions for their members. While unions themselves benefit from increased membership, individual workers see varied levels of benefit from the services provided by a union. In particular, the one-size-fits-all nature of most collective bargaining agreements—along with the take-it-or-leave-it vote to approve the agreement—means that many employees are covered by contracts that do not reflect their preferences.

Under current collective bargaining practices, employment arrangements are negotiated between an employer and a union with the union acting as the exclusive representative for the workers. As a condition of this exclusive representation, the union has a duty to fairly represent all workers subject to the agreement it negotiates.

Because all employees presumably benefit from the duty of fair representation, this duty has been invoked to justify the imposition of union fees on non-union employees whom unions deride as “free riders.” At the same time, exclusive representation by a single union unjustly reduces freedom of speech and association for workers and stifles individuals’ ability to negotiate employment agreements in both parties’ economic interests. The U.S. Supreme Court in Janus highlights this tension between the unions’ view of a “free rider on a bus headed for a destination that he wishes to reach” versus an employee’s opinion that he or she is “a person shanghaied for an unwanted voyage.”

Unions could avoid the duty and costs associated with representing members and non-members alike by giving up exclusive representation and allowing additional unions to compete for members. Since each union would represent its own members’ interests, individual unions would escape the obligation to represent the differing interests of other unions’ members or of non-union employees. Individual workers would have the freedom to join any one of several competing unions or to negotiate directly with his or her employer.

Empirical analysis indicates states with compulsory collective bargaining in the public sector have higher per-person government spending. This suggests that mandatory collective bargaining may drive up the costs of government. Thus, the elimination of mandatory collective bargaining and the introduction of inter-union competition and freedom of association for public employees may slow the growth of state and local spending.

Inter-union competition and workplace freedom can be implemented via several avenues, including lawsuits challenging exclusive representation on First Amendment grounds, the voiding of “no raiding” pacts, or the implementation of state-level legislation allowing for competing bargaining units.

The full report, Inter-Union Competition and Workplace Freedom: Ending Exclusive Representation, can be downloaded here.

###

Contact Eric Fruits by email at eric@cascadepolicy.org for more information or to schedule an interview.

About Cascade Policy Institute:

Founded in 1991, Cascade Policy Institute is Oregon’s free-market public policy research center. Cascade’s mission is to explore and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org.

###

Read Blog Detail
Business-unity-concept-cm

Inter-Union Competition and Workplace Freedom: Ending Exclusive Representation

By Eric Fruits, Ph.D.

EXECUTIVE SUMMARY

Labor unions exist to improve compensation and working conditions for union membership. Consequently, unions act to increase their own members’ wages and benefits. While unions benefit from increased membership, workers themselves see varied levels of benefit from the services provided by a union. Workers recognize the tradeoff between wage gains, benefits, employment opportunities, working conditions, and the nature of the political activities in which the union engages. The one-size-fits-all nature of a collective bargaining agreement, along with the take-it-or-leave-it vote to approve the agreement, means that many employees are covered by contracts that do not reflect their preferences. The exclusive representation by a single union in collective bargaining unjustly reduces freedom of speech and association for workers and stifles individuals’ ability to negotiate employment agreements in both parties’ economic interests.

Under current collective bargaining practices, employment arrangements are negotiated between an employer and a union acting as exclusive representative for the workers. As a condition of exclusive representation, the union has a duty to fairly represent all workers subject to the collective bargaining agreement. The benefit all employees theoretically gain from this duty of fair representation has been invoked to justify the imposition of agency fees on non-union employees. Janus, however, prohibits public sector unions and employers from collecting agency fees from non-union employees.

Unions could avoid the duty and costs associated with representing members and non-members alike by giving up exclusive representation and allowing additional unions to compete for members. Since each union would represent its own members’ interests, individual unions would escape the obligation to represent the varied interests of other unions’ members or non-union employees. Individual workers would have the freedom to join any one of several competing unions or negotiate directly with his or her employer.

  • Research indicates unions exert greater effort to attract and retain members when they are competing with other unions. Competition and the threat of membership “raids” provides an incentive for union leadership to be more responsive to its members’ demands.
  • Because of the moderating effect on wages, inter-union competition is expected to be associated with increased employment.
  • Evidence points to ambiguous effect of inter-union competition on union membership. In the United States, competition was associated with increased union membership. In New Zealand, the introduction of competition along with the ability for workers to negotiate directly with their employers was associated with decreased union membership.

Empirical analysis indicates states with compulsory collective bargaining in the public sector have higher per-person government spending. This suggests that mandatory collective bargaining may drive up the costs of government. Thus, the elimination of mandatory collective bargaining and the introduction of inter-union competition and freedom of association for public employees may slow the growth of state and local spending.

Inter-union competition and workplace freedom of choice can be implemented via several avenues, including lawsuits challenging exclusive representation on First Amendment grounds, the voiding of “no raiding” pacts, or the implementation of state-level legislation such as Tennessee’s Professional Educators Collaborative Conferencing Act.

READ THE FULL REPORT

Eric Fruits, Ph.D. is president and chief economist at Economics International Corp., a consulting firm specializing in economics, finance, and statistics. He is also Vice President of Research at Cascade Policy Institute and an adjunct professor at Portland State University, where he teaches in the economics department and school of business.

 

Read Blog Detail